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Add Passive Income and Diversify With These 3 Stocks

Dividend stocks are a great way to generate some passive income for your portfolio. However, it’s also important to add some diversification so that you aren’t overexposed and simply loading up on bank stocks, which haven’t been performing all that well this year.

The three stocks listed below can be great pillars for your dividend empire that provide good yields in three different industries:

Maple Leaf Foods Inc (TSX:MFI) is a household name in Canada and a company that can provide investors with a great deal of stability. Its meat products can be found throughout the country, which isn’t likely to change anytime soon. And with the company acquiring Lightlife Foods, which makes plant-based burgers, it could have considerable growth potential in the North American markets given the excitement we’ve seen surrounding Beyond Meat.

It could give the stock, which last year saw sales decline, some new life and the potential to cash in on the latest health trend. And with a dividend of 2%, investors can help pad their overall returns in an industry that normally doesn’t see this much hype.

While Maple Leaf Foods hasn’t seen the same bullishness that Beyond Meat has, that could certainly change if its patties can prove to be formidable opponents, and at this point in time, there’s no reason to think that they can’t be.

Norbord Inc (TSX:OSB)(NYSE:OSB) might be a bit of a riskier prospect than Maple Leaf Foods, but it too has tremendous potential over the long term. The lumber company has seen some volatility over the past six months, down more than 15% over that time.

However, the big picture is that as the population grows and as new homes continue to be built, there will be strong demand for wood panels and other products that Norbord makes.

While the company has recently had to reduce production at some of its plants as a result of poor market conditions, those should be temporary problems. Since 2014, the company’s sales have risen by more than 50%, while net losses have turned into profits.

And with strong, free cash flow in recent years, the company is in good shape if it runs into some bumps along the way. Currently, the stock pays a yield of 4.9%, and although investors might see some volatility in that, it should still provide a good source of recurring income.

Pembina Pipeline Corp (TSX:PPL)(NYSE:PBA) gives investors a third industry in which to gain exposure, as the oil and gas stock has achieved some strong returns so far in 2019, climbing 21% as of the end of last week. Near its 52-week high at writing, Pembina has been rising steadily over the past few years (although there have been some bumps along the way).

The good news is that with the Trans Mountain approval potentially movement approving pipelines with a more aggressive Alberta government in place, we could see some bullishness return to the industry.

OPEC’s announcement that production cuts will be extended will also help keep oil prices stable. However, Pembina has been able to remain profitable over the years even amid challenging industry conditions. Its yield of 4.8% is similar to Norbord’s (although likely more consistent) and could give your portfolio another solid dividend stock to help generate income.

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Fool contributor David Jagielski has no position in any of the stocks mentioned. Pembina is a recommendation of Dividend Investor Canada.

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