Finding a stable stream of income for retirement is important and can be hard to do in a time of low interest rates. Bond yields aren’t going to provide you with attractive returns, nor is putting money in your savings account, which, if you’re lucky, will pay you 1% a year. This is where dividend stocks are helpful because these types of stocks will give you more of a payout, and you could also make money if the stock prices improve. However, it is important to find stable and growing stocks as well since you don’t want to end up using your dividend income to offset a loss.
The two companies I have listed below offer good yields, operate in stable industries, and could be attractive options to hold for the long term.
Fortis Inc. (TSX: FTS)(NYSE: FTS) is a utility holding company that has a strong presence in several countries, including Canada and the United States. Fortis is a stable stock that has been able to generate strong returns and has done a good job of outperforming the TSX. Over the past five years, its stock has increased 35%, and year-to-date returns have been over 9%.
In three years, Fortis has seen revenues grow by 69%, although growth has slowed a bit with the most recent fiscal year seeing just a 1% improvement over the prior year. The company has also been able to generate a profit margin of over 10% in the past two years.
In addition to stable and persistent growth, Fortis provides an attractive dividend of 3.5% per year. The company also has a solid history of increasing its payouts as well with the most recent occurring last year when Fortis hiked the dividend by over 6%. In just three years, the company has increased its dividend by 25%.
