Revealed: 3 Smart Ways to Live Off Your Portfolio in 2020

This trio of top dividend plays, including Enbridge (TSX:ENB)(NYSE:ENB), can provide the fat income you need now.

edit Person using calculator next to charts and graphs

Image source: Getty Images.

Hi there, Fools. I’m back to highlight three top dividend stocks. As a reminder, I do this because solid dividend stocks

  • provide a healthy income stream in both good and bad markets; and
  • tend to outperform the market over the long run.

The three stocks below offer an average dividend yield of 6.5%. If you spread them out evenly in a $250K RRSP account, the group will provide you with an annual income stream of $16,250; on top all the appreciation you could earn.

So, if you’re looking to live off your portfolio in 2020, these three stocks are a good place to start.

Mullen it over

Kicking things off is energy services company Mullen Group, whose shares sport a highly attractive dividend yield of 7.3%.

Mullen’s leadership position in the oilfield services space, solid diversification (Trucking/Logistics and Oilfield Services), and steady cash flow should continue to support its high payout. In the most recent quarter, operating cash flow improved $20 million to $46.5 million, even as revenue declined.

While drilling activity continues to be soft, Mullen’s fundamentals remain solid.

“We generated the best quarterly results of this fiscal year, cash flow was very strong and with our well capitalized balance sheet there is little doubt in my mind that we will continue to grow our business for many years.”

Mullen trades at a forward P/E in the low teens.

Real estate riches

With a healthy dividend yield of 6.4%, commercial property company H&R REIT is our next high yielder.

H&R’s consistent dividend continues to be underpinned by solid scale ($14.3 billion worth of assets), a diversified portfolio (office, retail, industrial, residential), and stable fundamentals. In the most recent quarter, H&R’s funds from operations per unit — a key cash flow metric for REITs — improved 2.4%.

Moreover, the company’s leverage ratios decreased due to property sales of $890 million.

“[W]e’re pleased to be nearing the completion — nearing the conclusion of a difficult period of anchor tenant disruption, and believe we have been successful in improving the tenant mix and resiliency of our centers,” said COO Patrick Sullivan.

H&R shares trade at a P/E of 26.

Bridge to wealth

Closing out our list natural gas giant Enbridge, which boasts a healthy dividend yield of 5.9%.

Enbridge’s high-quality asset base, reliable clientele (93% are investment grade), and predictable cash flows should continue to support long-term dividend growth. In the most recent quarter, distributable cash flow (DCF) clocked in at an impressive $2.1 billion.

Looking ahead, management reaffirmed its full-year DCF outlook of $4.30 to $4.60 per share.

“We delivered another strong quarter of operating and financial results,” said CEO Al Monaco. “The continued strength of our operating performance reflects the quality and predictability of our business model.”

Enbridge shares trade at a forward P/E in the high teens.

The bottom line

There you have it, Fools: three top high-yield stocks worth checking out.

As always, don’t view them as formal recommendations. Instead, look at them as a starting point for more research. A dividend cut (or halt) can be especially painful, so you’ll still need to do plenty of due diligence.

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. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends MULLEN GROUP LTD.

More on Dividend Stocks

consider the options
Dividend Stocks

Is TD Bank the Best Dividend Stock for You?

Toronto-Dominion Bank (TSX:TD) has a high dividend yield but is embroiled in a serious money-laundering scandal.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

How to Use Your TFSA to Earn $6,000 Per Year in Passive Income

Hint: You'll need this Hamilton covered call ETF, which yields over 10%.

Read more »

Growth from coins
Dividend Stocks

2 Dividend-Growth Stocks With TSX-Beating Potential That Deserve More Respect

Here are two of the best TSX dividend-growth stocks you can buy today and hold for the next decade.

Read more »

Man pointing at a recycling symbol
Dividend Stocks

GFL Stock Rose 24% Last Month: Is It Still a Buy in July?

GFL stock (TSX:GFL) exploded by 24% in June, but is the growth now over for July? Or can investors still…

Read more »

A woman shops in a grocery store while pushing a stroller with a child
Dividend Stocks

Better Buy: Loblaw Stock or Metro Stock?

Loblaw (TSX:L) and another grocer that could do well over the long haul as markets get rocky.

Read more »

concept of real estate evaluation
Dividend Stocks

BRE Stock: Should You Buy the 10.5% Yield?

BRE stock (TSX:BRE) offers investors the opportunity for a rebound in a real estate sector that should see high prices…

Read more »

dividends grow over time
Dividend Stocks

Prediction: These Could Be the Best-Performing Value Stocks Through 2030

Seeking value stocks trading at a discount? These top value stocks could outperform through 2030 through valuation expansion.

Read more »

Dividend Stocks

3 TFSA Hacks to Build a $1 Million Tax-Free Nest Egg

These TFSA investing hacks could help convert $95,000 into $1 million tax-free. Here's how to get started.

Read more »