Investing in dividend-growth stocks is one of the most powerful and time-proven strategies to build wealth; this means that investors should favour stocks with modest yields that have the ability to grow their dividends over time over ones with high yields that have little to no growth potential.
With all of this in mind, let’s take a closer look at three dividend-growth stocks with yields of 3-6% that you could buy right now.
Brookfield Property Partners LP
Brookfield Property Partners LP (TSX: BPY.UN)(NYSE:BPY) is one of the largest commercial real estate companies in the world. It has a diversified portfolio that includes 146 “premier” office properties and 126 “best-in-class” retail malls, as well as multifamily, industrial, hospitality, triple net lease, and self-storage assets around the globe.
Brookfield currently pays a quarterly distribution of US$0.295 per unit, equal to US$1.18 per unit annually, and this gives it a yield of about 5.1% at the time of this writing.
Investors must note that the company’s 5.4% dividend hike in February has it on track for 2017 to mark the third consecutive year in which it has raised its annual distribution, and that it has a long-term distribution-growth target of 5-8% annually, so I think its consistently strong financial performance, including its 6.1% year-over-year increase in funds from operations to US$0.70 per unit in the first half of 2017, will allow its streak of annual increases to continue for the foreseeable future.
Emera Inc.
Emera Inc. (TSX: EMA) is a geographically diverse energy and services company. It generates, transmits, and distributes electricity and natural gas, and provides utility energy services in Canada, the United States, and four Caribbean countries. Its subsidiaries include Tampa Electric, Nova Scotia Power, Peoples Gas, New Mexico Gas, Emera Caribbean, and Emera Maine.
Emera currently pays a quarterly dividend of $0.5225 per share, equal to $2.09 per share annually, which gives it a yield of about 4.5% at the time of this writing.
It’s important to note that Emera’s 10% dividend hike in July 2016 has it on pace for 2017 to mark the 11th consecutive year in which it has raised its annual dividend payment, and that it has a dividend-growth program in place that calls for annual growth of 8% through 2020, and I think its strong operational performance will allow it to extend this program into the late 2020s.
Suncor Energy Inc.
Suncor Energy Inc. (TSX: SU)(NYSE: SU) is one of Canada’s largest integrated energy companies, and its focus is on developing Canada’s Athabasca Basin, one of the world’s largest petroleum resource basins. The company’s operations include oil sands development and upgrading, offshore oil and gas production, petroleum refining, and product marketing under its Petro-Canada brand.
Suncor currently pays a quarterly dividend of $0.32 per share, equal to $1.28 per share on an annualized basis, and this gives it a yield of about 3% at the time of this writing.
Investors must note that Suncor’s 10.3% dividend hike in February has it on track for 2017 to mark the 15th consecutive year in which it has raised its annual dividend payment, and I think its strong growth of funds from operations, despite the lower commodity price environment, including its 112.6% year-over-year increase to $2.19 per share in the first half of 2017, will allow its streak to continue for many years to come.
Which of these stocks belongs in your portfolio?
I think Brookfield Property Partners, Emera, and Suncor are three of the best dividend-growth stocks in their respective industries, so take a closer look at each and consider investing in one or more of them today.
