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Cash for Life: Here Are 3 “Forever” Dividend Stocks I’d Buy in 2020

Dividend stocks promise stability. It’s usually the well-established and well-grown companies that pay consistent dividends. Even better are Dividend Aristocrats with histories of increasing dividends. These are the stocks you can hope will endure forever and keep offering a steady cash flow through dividends.

Enbridge (TSX:ENB)(NYSE:ENB), Bank of Montreal (TSX:BMO)(NYSE:BMO), and Suncor (TSX:SU)(NYSE:SU) are three ever-green dividend stocks. All three of them are dividend nobility, with years of increasing dividends.

Energy sector giant

Enbridge is one of the largest companies in the energy sector. Enbridge’s core business is liquid pipelines, gas pipelines, utilities, and power. The company operates the world’s most extended crude oil transportation system, spanning over 27,564 km.

As a Dividend Aristocrat, Enbridge has a history of increasing dividends for 19 consecutive years. The company raised dividends, even through the Great Recession and the worst years in the history of petroleum industries. Enbridge also gives a very generous dividend yield of 5.8%. With Enbridge’s history of dividends, your payouts are likely to grow in the future.

Enbridge is trading at $50.4 per share. This year has been good for the company’s market value growth, with it increasing by 17.6%.

Fourth-largest bank

Bank of Montreal is one of the Big Five. Like its peers, the bank enjoys the trust investors have in the country’s banking sector. The bank operates mostly in the country and in the United States. Last quarter’s results have placed the bank in a strong position.

Bank of Montreal has been paying dividends for over a century and consecutively increased its dividends for seven years. The current yield is a juicy 4.24%, and the payout ratio is a very stable 46.88%. The banking sector of the country is a behemoth of financial stability, and you will likely be getting your slice from the bank’s profits for many years to come.

This year, the bank grew its market value by 12.2%, and it’s currently trading at $100.55 per share. The trailing price-to-earnings ratio of 11.6 and price-to-book ratio of 1.39 indicate that it’s undervalued compared to its big brothers.

Another energy giant

Suncor is another trustworthy and durable dividend stock; even Warren Buffett has an investment in it. A pioneer of the country’s oil sands, Suncor also has the most substantial stake in this considerable petroleum resource. The company is also poised for the future of energy, with 100 MW wind-based production and plans for solar energy.

Suncor increased its dividend payouts for nine consecutive years. Currently, the dividend yield is a decent 4%. The payout ratio is also very stable at 51%. The company didn’t slash its payouts through the worst two years seen by the sector, and after seeing the stable business model, you might only see an increase in the payouts.

The company is trading at $42 per share and has increased its market value by 9.5% this year.

Foolish takeaway

Having such dependable dividend stocks tucked away doesn’t just promise a steady income stream through payouts. It also anchors your portfolio and gives it relative stability in the presence of volatile growth stocks. If you want to make investments that you want to forget about, except while collecting your payouts, Enbridge, Bank of Montreal, and Suncor should be on your radar.

Free investor brief: Our 3 top SELL recommendations for 2019

Just one ticking time bomb in your portfolio can set you back months – or years – when it comes to achieving your financial goals. There’s almost nothing worse than watching your hard-earned nest egg dwindle!

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Stock #1 is a household name – a one-time TSX blue chip that too many investors have left sitting idly in their accounts, hoping the company’s prospects will improve (especially after one more government bailout).

Still, our analysts rate this company a firm SELL.

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Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge.

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