Dividend-paying investments are a must for those investors that are looking for a steady stream of income without needing to withdraw from their principal investment. Even better, some dividend investments can be a source of incredible growth too.
While there are plenty of well-paying yields on the market, not all of the investments can provide a stable, if not growing, source of revenue for investors.
Here’s a look at some of the best-paying and stable investments for income-seeking investors.
Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is an all-time favourite for dividend investors for several reasons. The quarterly dividend currently provides a very attractive 4.52% yield, and the bank has provided a healthy annual bump to the payout for at least the past few years, with the most recent hike coming this past quarter.
Unlike many of its big bank peers, Bank of Nova Scotia opted to expand primarily into Latin America over the U.S. market, and that decision has provided incredible growth for the company’s international segment for multiple, consecutive quarters.
The Pacific Alliance member nations in particular have fueled strong results for the bank, most recently realizing 15% growth over the prior year.
In the most recent quarter, Bank of Nova Scotia reported net income of $1.93 billion, which, while lower than the$2.1 billion reported in the same quarter last year, was attributed to the acquisitions the bank completed during the quarter.
Enbridge’s pipeline business remains one of the most lucrative business models on the market, offering a stable and recurring source of revenue for the company. In short, Enbridge has a massive pipeline network that traverses the continent, and energy companies pay a flat fee to access that pipeline network, not unlike paying a toll to access a highway.
If that weren’t lucrative enough, the company has a backlog of projects measured in the billions that will drive revenues even higher.
So, where’s the value opportunity?
Enbridge’s much-hyped acquisition of Spectra Energy brought in an incredible amount of debt, which weighed heavily on the company, prompting credit-rating agencies to drop Enbridge’s rating and push Enbridge to seek cost-cutting measures and restructure and sell off some assets.
While the stock may have dropped considerably, the business is stable and profitable, and the dividend, which provides a yield of 5.97%, is incredibly appetizing.
Fortis is a behemoth of an investment. The utility is one of the top 15 largest on the continent, with operations in Canada, the U.S., and the Caribbean, which, despite that incredible size, has an incredibly aggressive approach towards expansion.
That expansionist approach has seen Fortis acquire several increasingly larger companies over the years, culminating in the US$11.3 billion ITC Holdings deal several years ago.
With each passing acquisition, Fortis realizes a boost in earnings and fuels multi-year growth to its already impressive dividend. Long-term investors in particular will appreciate Fortis’s solid record of consecutive annual dividend hikes, which now spans over four decades.
Fortis currently provides a quarterly dividend with a yield of 3.96%.
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. Enbridge is a recommendation of Stock Advisor Canada.