Dividend stocks can provide you with regular income to supplement your lifestyle or reinvest back into the market. But be careful: some dividend stocks can be nightmares. That’s because dividends aren’t always reliable, and when these payouts are cut, the stock prices can fall in suit, sometimes by 20% or more. Not only does your income stream shrink, but your initial investment is dinged hard.
However, if you play the dividend game well, it can actually provide more stability to your portfolio, not to mention giving you an income stream that can grow. It all comes down to choosing the right income-producing stocks.
I’ve looked at hundreds of dividend stocks, and there are some great options, but only a few dozen can give you stability and reliable income growth for a decade or more. Yet why stop there? If you dig deep, you can unearth dividend stocks that can give you a stable stream of regular cash for the next 100 years.
After amassing his fortune in the late 1800s, Russel Sage had some advice for new investors. “Real estate is an imperishable asset, ever increasing in value,” he said. “It is the most solid security that human ingenuity has devised. It is the basis of all security and about the only indestructible security.” Over the next century and beyond, many other famous investors, from John Paulson to Warren Buffett, extolled the virtues of owning property. After all, it’s one of the only things we’re not making more of.
If you’re looking to own property but don’t want to manage it yourself, take a look at Brookfield Property Partners (TSX:BPY.UN)(NASDAQ:BPY). Run by Brookfield Asset Management, one of the best alternative asset managers in existence, Brookfield Property Partners owns, operates, and develops one of the largest property portfolios in the world. This stock gives you exposure to office, retail, multifamily, industrial, hospitality, self-storage, student housing, and manufactured housing assets. Plus, it delivers a solid 5% dividend yield. As long as property remains valuable, Brookfield will find ways to capitalize.
Planning for the future
Apart from real estate, the world has also experienced ever-growing demand for power. From 2000 to 2050, the International Energy Agency expects global power demand to more than triple. Stocks like Canadian Utilities Limited (TSX:CU) are ready to profit.
Canadian Utilities has been successfully delivering more and more power for decades. Last year, it generated record profits of $608 million. Long-term earnings growth has fueled 47 years of consecutive dividend increases. It’s rare to find a company with such an impressive dividend history. Over the last 40 years, the company has generated annual shareholder returns of roughly 12%, handily outpacing nearly every market index.
Canadian Utilities is also positioning itself for the next century of energy needs. It recently sold its entire fossil fuel portfolio for $835 million and is focused on having a completely renewable generation portfolio complemented by low-emission sources like natural gas. As a result, from 2018 to 2019, the company expects its direct emissions footprint to fall by more than 90%. That should remove most of the regulatory risk that could hit energy companies hard over the next decade. As for Canadian Utilities, it now has the assets in place to grow for another 100 years.
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.
The Motley Fool owns shares of Brookfield Asset Management and BROOKFIELD ASSET MANAGEMENT INC. CL.A LV. Fool contributor Ryan Vanzo has no position in any stocks mentioned. Brookfield Asset Management and Brookfield Property Partners are recommendations of Stock Advisor Canada.