The markets are facing a lot of uncertainty these days, and one thing that can help offset that is a good dividend. Whether it is padding your overall returns or offsetting a weak performance, dividend income will help improve your portfolio’s returns. Companies know that, and that’s why many offer an attractive yield — to entice investors to buy their stock.
The three stocks listed below currently pay more than 7% per year in dividends and could be great investment options for the long term.
Boston Pizza Royalties Income Fund (TSX:BPF.UN) is first on the list, and for good reason. The stock benefits from the success of one of the country’s top restaurant chains, and that makes it a very appealing buy. It offers investors a bit more stability than what you might find with a tech stock or a cannabis stock, which could carry a lot more risk.
Although the restaurant business can be very competitive and tough to survive in, those that do, like Boston Pizza, can provide investors with predictability that you might not otherwise find in other investments. As long as an economy grows and expand, the demand for food and restaurants will only continue to rise. The simpler the model for success, the less risk that’s involved for investors.
Currently, the stock pays investors a monthly dividend that yields a total of 7.5% annually, and that’s due in large part to the stock’s 15% decline over the past year, which has given its yield a big bump. The stock is overdue for a recovery, and it could be a great time to secure this high yield while it lasts.
TransAlta Renewables (TSX:RNW) is a bit of a longer-term play than Boston Pizza. The utility company has a variety of power-producing facilities, including wind, hydro, and gas. Its focus is on provider cleaner energy to consumers, and it may take some time before investors see a payoff from that. However, it’s a trend that isn’t going anywhere and will likely lead to long-term growth opportunities for the company.
TransAlta currently pays investors a dividend yield of around 7.8%, and at a price-to-book ratio of only 1.4, it could be a good value buy for investors looking to hold for the long term.
Morguard Real Estate (TSX:MRT.UN) trades at around half of its book value, as it has struggled in the past year, dropping more than 10% in value. The company, however, offers lots of stability in its top line, and it has seen consistency in its operating income as well.
The REIT has a portfolio that includes a variety of different spaces, including retail, office, and industrial locations. The diversification gives the company many ways to grow its business, and that can help generate strong financials as well.
The stock is trading near its 52-week low, and while it may not have a lot of upside, it’s still a great value buy that can offer a lot in dividends. Currently, Morguard pays its shareholders more than 7.6% per year.
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 David Jagielski has no position in any of the stocks mentioned.