Get Paid Every Month for a Lifetime With These 3 Dividend Studs

Great stocks like Inter Pipeline Ltd. (TSX:IPL) and A&W Revenue Royalties Income Fund (TSX:AW.UN) will ensure you have enough income for a comfortable retirement.

| More on:
Payday ringed on a calendar

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

I’ve had the privilege of talking to hundreds of near-retirees about their finances over the years, and one concern overshadows all others.

These folks have done a nice job saving, with some even amassing $1 million (or more!) in retirement accounts. Even the people with just $500,000 — or less — are still in relatively good shape, assuming they can count on CPP and have a paid-off house.

Where the average person struggles is converting their nest egg into income. They take one look at GIC rates offered by banks and shake their heads. There must be better choices out there. Dividends are an option, but aren’t they risky?

Not at all, provided you pick the right stocks. I can help with that. Here are three dividend-paying stocks that’ll provide dependable income for even an extended retirement. And, as a bonus, they all pay monthly, which meshes quite well with the real world.

Inter Pipeline

Inter Pipeline (TSX:IPL) has quietly become a powerhouse energy distribution company, owning assets like pipelines, natural gas processing plants, and fuel storage facilities. Some 50% of earnings come from three major pipelines that transport bitumen from the oil sands to awaiting refineries.

The company has done a nice job growing over the years by adding on smaller bolt-on projects onto existing assets, but it has now embraced a different near-term expansion plan. It’s currently building the Heartland Chemical Complex, which will provide resins made from propane to plastics manufacturers. When completed, Heartland could add approximately 30% to the company’s bottom line. But it’ll cost some $3.5 billion.

While investors wait for the new facility to come online — which should happen in late 2021 — they’re treated to one of the best dividends out there. The yield today is 8.4%, and the stock has delivered a decade’s worth of annual consecutive dividend increases. The payout ratio is sound too, coming in at approximately 70% of funds from operations.


After years of regularly eating Mozza Burgers and wishing I owned the stock, I bit the bullet last year and bought A&W Revenue Royalties Income Fund (TSX:AW.UN) shares.

Buoyed by strong consumer demand for its Beyond Meat burger, the company posted strong same-store sales growth numbers of 10% last year, which is virtually unheard of for a restaurant chain of its size. Remember, A&W has nearly 800 locations from coast to coast and is Canada’s second-largest burger chain.

A&W shares hardly ever become truly cheap, but it’s a small price to pay for owning this excellent company. Shares currently trade hands for 19.7 times trailing earnings, but the bottom line should improve this year because of improved sales at existing restaurants as well as new locations opening.

The current dividend is 4.2%, and the company has raised the payout four times since the beginning of 2018.

Northwest Health

An investment in Northwest Healthcare REIT (TSX:NWH.UN) is as simple as it is powerful. If you believe we’ll need more medical facilities going forward, then there are few better ways to play this trend.

Northwest owns a wide variety of property, including medical office buildings in Canada and Europe, hospitals in Brazil and Australia, and seniors living facilities in Australia and New Zealand. There’s still plenty of potential to add to the portfolio in all of these markets, and it could really increase growth by looking to buy assets in the United States.

One big advantage of acquiring specialty healthcare buildings is they tend to come with a long lease life. It’s awfully hard for a hospital to pick up and move down the road. The average Northwest Healthcare tenant has 13 years left on their lease.

The stock pays out a $0.067-per-share monthly dividend, which is good enough for a 6.6% yield. The payout ratio should be approximately 85% this year, which is solid for a REIT. You don’t have to worry about Northwest’s distribution; it’s safe.

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 Nelson Smith owns shares of INTER PIPELINE LTD and A&W Revenue Royalties Income Fund. A&W Revenue Royalties is a recommendation of Dividend Investor Canada. Northwest Healthcare is a recommendation of Stock Advisor Canada.

More on Dividend Stocks

Payday ringed on a calendar
Dividend Stocks

How to Convert $500 Monthly Investment Into $200 Monthly Income

If you want the stock market to give you regular monthly income, you have to invest in the stock market…

Read more »

worry concern
Dividend Stocks

3 Ultra-Safe Dividend Stocks for Jittery Investors

Motley Fool investors nervous about the market downturn should consider these ultra-safe dividend stocks that keep paying passive income no…

Read more »

House Key And Keychain On Wooden Table
Dividend Stocks

Is the Real Estate Boom Finally at an End?

It might be hard to believe, but Canada’s decades-long housing boom might be at an end.

Read more »

Caution, careful
Dividend Stocks

3 Mistakes to Avoid When Investing in a Recession

Avoid making these crucial investing mistakes during market downturns to protect your investment portfolio.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

2 Dividend ETFs for Easy Passive Income

Canadians can earn generous passive income the easy way from two dividend ETFs with monthly payouts.

Read more »

Payday ringed on a calendar
Dividend Stocks

TFSA Pension: How Retired Couples Can Get an Extra $815 Per Month in Tax-Free Passive Income

Retirees now have an opportunity to buy top dividend stocks at cheap prices to generate high-yield, tax-free passive income inside…

Read more »

exchange traded funds
Dividend Stocks

2 Dividend-Paying ETFs You Can Buy in 2022

These two dividend-paying ETFs in Canada allow them to earn a steady stream of passive income.

Read more »

Dividend Stocks

Attention Canada: It’s Time to Buy These REITs in Your TFSA

Rising interest rates created a correction in REIT prices. It’s time to buy some REITs in your TFSA and lock…

Read more »