3 Dividend Investments Every Portfolio Needs

Every portfolio needs a strong core of income-producing investments, such as Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) and others.

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Finding the right mix of growth and income investments can be a daunting task for many investors. Fortunately, the market provides us with plenty of choices for income-seeking investors to select from, but this can often be a confusing and complicated task.

Here are three great dividend investments that both new and seasoned investors should consider for inclusion in their portfolio.

The telecom with a massive moat

BCE Inc. (TSX:BCE)(NYSE:BCE) is a long-time dividend pick that has been rewarding shareholders for well over a century. Most people recognize BCE as one of the leading telecoms in Canada, but apart from the core subscription services that BCE offers, BCE also has an impressive empire of media holdings that includes radio and TV stations as well as an interest in professional sports teams.

BCE’s impressive infrastructure provides a compelling moat against both new and existing competitors from making gains on the behemoth, and a series of several acquisitions over the past two years has helped BCE realize impressive growth that should carry over for the next few years.

In terms of a dividend, BCE offers investors a quarterly dividend that pays $0.75 per share, which translates into a very impressive yield 5.65%. For many investors, the dividend is reason enough to consider an investment in this buy-and-forget favourite.

BCE currently trades at just over $53 with a P/E of 17.16.

The well-diversified utility

Utilities are often mentioned as great investments for long-term investors looking for growth and income, and Algonquin Power & Utilities Corp. (TSX:AQN)(NYSE:AQN) is one of the best options on the market for investors seeking long-term income and growth.

Algonquin offers electricity generation, transmission, and distribution options as well as gas and water utility services through its two subsidiaries. Algonquin is already a growing force in the emerging renewable energy sector, with over 35 facilities that include wind, solar, thermal, and hydro elements.

From an income standpoint, Algonquin provides investors with a quarterly dividend that provides a handsome 4.78% yield, which Algonquin has impressively incremented on an annual or better basis going back over a decade.

Algonquin currently trades at just over $12.50 with a P/E of 24.33.

The bank with a newfound appetite for expansion

In recent years, Canada’s big banks have increasingly expanded into foreign markets as a viable hedge against Canada’s white-hot real estate market and comparably lower interest rates.

For most of Canada’s big banks, that expansion has meant further entry into the U.S. market, but Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) has, until recently, resisted that urge to expand south of the border.

CIBC completed the acquisition of PrivateBancorp last year, which not only addressed the concerns of holding too many mortgage loans in Canada, but also provided a new revenue stream and a viable avenue for additional growth in the future.

That expansion should not be discounted. The U.S. market is huge, and the opportunities for one of Canada’s big banks to swoop in and stake a claim in a regional player are huge and will provide ample growth for investors for years to come.

CIBC offers investors a quarterly dividend that pays a very appetizing 4.82%, which is among the highest of any bank in Canada and far surpasses what U.S.-based banks offer their shareholders.

CIBC currently trades at $110 with a P/E of 10.11.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Demetris Afxentiou has no position in any stocks mentioned.  

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