3 Financial Stocks to Secure a Growing $10K Income Stream

This group of dividend-growth streakers, including Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM), can help build your wealth the prudent way.

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Hello there, Fools. I’m back to highlight three top dividend-growth stocks. As a quick reminder, I do this because businesses with consistently increasing dividend payouts

  • can guard against the harmful effects of inflation by providing a rising income stream; and
  • tend to outperform the market averages over the long haul.

The three stocks below offer an average dividend yield of 4%. Thus, if you spread them out evenly in an average $250K RRSP account, the group will provide you with a growing $10,000 annual income stream. And it’s all completely passive.

This week, we’ll take a look at dividend stocks coming from the particularly attractive financial services space.

Bank on it

Leading off our list is financial services giant Bank of Montreal (TSX:BMO)(NYSE:BMO), which has delivered steady dividend growth of 30% over the past five years.

BMO’s scale, comfy regulatory environment, and diversified nature continue to support steady payout increases. In the most recent quarter, adjusted EPS clocked in at $2.38 as revenue improved 5%. BMO’s Canadian and U.S. personal and commercial banking businesses combined delivered 9% growth in pre-provision pre-tax profit.

Our capital position remains strong at 11.4% and we are taking actions to continue to position our businesses for growth and sustainable long-term performance,” said CEO Darryl White.

BMO shares are down 8% over the past three months and currently offer a healthy dividend yield of 4.4%.

Keep it intact

With steady dividend growth of 55% over the past five years, property and casualty (P&C) insurance company Intact Financial (TSX:IFC) is next up on our list.

As Canada’s largest P&C insurance company, Intact’s scale advantages (close to $10 billion in annual premiums written), multi-channel distribution, and in-house claims expertise should continue to underpin its rising dividend. In Q2, EPS came in at $1.44 as revenue improved 8% to $3.2 billion.

Intact ended the quarter with $1.3 billion of total capital margin.

“Hard market conditions continue across the business allowing us to capture growth opportunities,” said CEO Charles Brindamour.

Intact is up 31% so far in 2019 and currently offers a decent dividend yield of 2.3%.

Imperial choice

Rounding out our list is banking behemoth Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM), which has increased its dividend 40% over the past five years.

CIBC’s long history of earnings and payout growth coupled with the recent sluggishness of its shares make it a particularly timely play. In the most recent quarter, adjusted earnings improved 4% as revenue grew to $4.7 billion.

“In the third quarter, we delivered solid results through the continued execution of our client-focused strategy,” said CEO Victor Dodig. “Our diversified growth on both sides of the border is a result of a highly connected, purpose-led team working together to meet the needs of our clients.”

CIBC shares remain down about 8% over the past six months and currently offer a healthy dividend yield of 5.4%.

The bottom line

There you have it, Fools: three solid dividend-growth stocks worth checking out.

As always, they aren’t formal recommendations. They’re simply a starting point for more research. The breaking of a dividend-growth streak can be especially painful, so plenty of due diligence is still required.

Fool on.

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 Brian Pacampara owns no position in any of the companies mentioned. Intact is a recommendation of Stock Advisor Canada.

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