I reviewed the top stocks that I picked for Motley Fool every month this year. They are largely defensive ideas that revolve around value and safe dividends.
Here are two top dividend stock ideas that I believe are still great buys for income, value, and long-term prospects today.
Pembina Pipeline
Pembina Pipeline (TSX: PPL)(NYSE: PBA) is an energy infrastructure company that’s been around for more than 60 years.
It has an integrated system that gathers and processes gas and transports oil and gas, offering a full spectrum of midstream and marketing services to the energy sector.
In the trailing 12 months, Pembina generated record operating income, net income, and adjusted EBITDA of $1.6 billion, $1.7 billion, and nearly $3 billion, respectively. Specifically, adjusted EBITDA increased by 7% year over year.
Pembina has no shortage of growth. It has $5.7 billion of commercially secured projects and a further $10.5 billion of potential projects for further down the road, while its enterprise value is about $34 billion.
It’s also making progress on the Kinder Morgan Canada acquisition. Last week, it received approval from the Canadian Competition Bureau for the acquisition that’s expected to close in the first half of 2020.
During the year, Pembina boosted its monthly dividend by almost 5.3%. At less than $46 per share as of writing, the stock is attractively priced and offers a juicy dividend yield of 5.25%.
The average 12-month analyst price target is about $56, representing 22% near-term upside potential.
Brookfield Property Partners
The solid income stream from Brookfield Property Partners (TSX: BPY.UN)(NASDAQ:BPY) comes from the stable cash flows it earns from its globally diversified portfolio of real estate assets. As a real estate developer as well as an owner and investor, it’s able to generate higher margins.
The stock is down because it’s largely in the retail and office space, which is more sensitive to economic gyrations than the residential space.
It’s going to take time for it to draw out value from the GGP acquisition, its core retail portfolio, as it has a list of redevelopment projects planned. It’s important to note that Brookfield Property’s assets are top notch and in highly sought-after locations.
Moreover, the business is managed very well. For example, management is careful to limit development projects to be less than 10% of total assets.
Currently, Brookfield Property has active development projects, including in the office and multifamily space.
Brookfield Property pays out a U.S. dollar-denominated cash distribution and offers a whopping yield of about 7%. This year marks its sixth consecutive year of dividend increases.
Investor takeaway
Buy Pembina Pipeline and Brookfield Property for safe 5-7% yields and the potential for double-digit total returns in the long run.
