Income for Life: Here Are 3 “Forever Assets” I’d Buy in 2020

National Bank of Canada (TSX:NA) has been the best Big Six bank to hold over the last 10 years. Here are more quality dividend stocks you should buy in 2020.

| More on:

Image source: Getty Images.

Here are three quality “forever assets” that you should buy to get income for life. Unfortunately, they’ve all had extraordinary price appreciation over the last year. I suggest buying them on dips. Specific percentages are listed below.

National Bank of Canada

You can count on National Bank of Canada (TSX:NA) to pay you increasing income for life! The bank outperforms. In the last five and 10 years, the bank beat its bigger peers in total returns. Over the last 10 years, it was also a top passive-income generator, second only to CIBC.

In fiscal 2019, National Bank delivered the best earnings results among the Big Six banks, delivering a 7% increase in adjusted earnings per share against fiscal 2018. Its recent dividend hike (over 12 months) was 9.2%, which was second only to TD Bank’s 10.4% dividend hike.

With an 81% revenue generation in Canada, National Bank’s profitability is closely tied to the economic health of the country and, in particular, Quebec, as the province contributes 55% of its revenue. From other businesses in Cambodia and the United States, it generates strong growth.

Currently, National Bank provides a safe yield of 4% that’s protected by a payout ratio of 44%. Because of its strong results, the stock has run up 22% over the last year. It’d be wise to start buying the proven business on meaningful dips of 5-10% in 2020.

Northwest Healthcare Properties REIT

Northwest Healthcare Properties REIT (TSX:NWH.UN) is another fabulous income stock that will pay you for life. Longer lifespans and the mega-trend of a growing aging population, leading to higher spending in healthcare, will be a growth driver for the REIT for decades to come.

Northwest Healthcare Properties REIT has abundant opportunities to acquire international assets. Its key markets include Australia, New Zealand, Europe, Brazil, and Canada. Currently, it holds a global portfolio of 171 healthcare properties, including hospitals, healthcare facilities, and medical office buildings.

About 72% of its leases are indexed to inflation, offering steady organic growth. Additional earnings will come from its fee-bearing capital of $3.6 billion, from which it earns asset management fees. Moreover, management strategically uses debt to expand its portfolio.

The REIT generates safe cash flows in a stable asset class. Its monthly dividend, which is good for a yield of 6.3%, is supported by a high portfolio occupancy of 97% and long-term leases that last for more than 13 years on a weighted-average basis.

The stock has run up 23% over the last 12 months. It’d be wise to start buying the high-yield dividend stock on meaningful dips of 9% or greater.

Brookfield Renewable

The shift from fossil fuels to renewable power will drive decades of growth for Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP).

Brookfield Renewable has 120 years of experience in power generation. It has the expertise to develop and acquire renewable assets and operate the portfolio skillfully to generate attractive risk-adjusted returns.

Currently, its global portfolio, across 25 markets and 15 countries, consists of US$50 billion of assets in more than 5,250 generating facilities with a total capacity of 18,000 MW.

The utility’s primary asset class of hydroelectric generation makes up 74% of its generation. Proudly, it is a U.S. leader in low environmental impact hydroelectric generation. It also has 22% and 4%, respectively, of generation in wind and solar.

Brookfield Renewable has a track record of beating the market with annualized total returns of 16% since inception. Additionally, from 2012 to 2019, it increased its cash distribution on average by 6% per year, sticking to its dividend-growth target of 5-9% per year. Currently, it offers a 4.1% yield.

As a global company riding on a secular growth trend, Brookfield Renewable has years of growth runway. However, the stock has run up 73% over the last year! And it’d be wise to start buying the dividend stock on meaningful dips of at least 15-30%.

Investor takeaway

National Bank, Northwest Healthcare Properties, and Brookfield Renewable are quality businesses with bright futures that can pay you income for life! Hopefully, the market will correct in 2020 to provide investors better buying opportunities in the excellent dividend stocks.

Stay hungry. Stay Foolish. And have a Merry Christmas!

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 Kay Ng owns shares of The Toronto-Dominion Bank. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS.

More on Dividend Stocks

Man data analyze
Dividend Stocks

3 Top Dividend Stocks I Can’t Wait to Buy in 2023

Top Dividend Aristocrats are worth buying in almost every market, especially if you hold them long term. However, weak markets…

Read more »

financial freedom sign
Dividend Stocks

Buy 2,911 Shares in This TSX Stock for a Shot at $1 Million in 32 Years

You might not see insane growth overnight, but you won't see insane drops either from this TSX stock offering a…

Read more »

Dividend Stocks

A Dividend Heavyweight I’d Buy Over Enbridge Right Now

BCE Inc. (TSX:BCE) is a dividend heavyweight I prefer over Enbridge Inc. (TSX:ENB) due to its value and impressive income…

Read more »

Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline
Dividend Stocks

2 Best Monthly Dividend Stocks for March 2023

There are plenty of monthly dividend stocks to buy right now, but prospective investors should take a closer look at…

Read more »

A bull and bear face off.
Dividend Stocks

The 3 TSX Stocks to Buy Before a Long-Term Bull Market Begins to Build

The TSX may not go bullish for a while, even when the economy recovers from a recession, but investors should…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

TFSA Investors: Make $200 in Monthly Passive Income With This 1 TSX Dividend Stock

Here’s an attractive dividend stock TFSA investors can buy now to earn $200 in monthly passive income.

Read more »

A plant grows from coins.
Dividend Stocks

TFSA Investors: How to Create $40,000 in Returns and Passive Income in 30 Years

If you think you'll need just $40,000 in passive income per year in retirement, your TFSA can get you there…

Read more »

stock analysis
Dividend Stocks

Buy These TSX Dividend Shares Next Week

Are you looking for dividend stocks to add to your portfolio? Buy these picks next week!

Read more »