3 Dividend Stocks to Buy for Guaranteed Returns

Dividend stocks are some of the best ways to earn guaranteed income, but not all are the same. Start with these top three!

| More on:
Two colleagues working on new global financial strategy plan using tablet and laptop.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

While practically nothing is guaranteed in life, if you’re looking for guaranteed returns, you want dividend stocks. But it’s true that not all dividend stocks are the same. While some will cut dividends, others won’t. This all comes down to a company’s business model and how long it’s been around.

Today, I’ll look at three dividend stocks you can invest in for practically guaranteed returns. Each is a Dividend Aristocrat, growing dividends each year for over 25 years. Each has also never missed a payout. So, if you’re looking for extra cash, here is where you start.

Algonquin stock

The utility sector is the perfect place to look when searching for dividend stocks. Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) has the business strategy of seeing revenue grow through the stability of the utility sector. No matter what, everyone needs to keep the lights on. Then it uses its stable revenue to acquire further businesses. As revenue increases, Algonquin stock starts the process over again.

No wonder it’s a Dividend Aristocrat, continuously increasing its dividend. During the market crash of March 2020, the company saw only a minor drop and share price. In the past year, shares of Algonquin stock have grown by just 2.5%. But if you look back further, during the last decade Algonquin stock is up 420% for a compound annual growth rate (CAGR) of 17.9% as of writing!

Meanwhile, it offers a dividend yield of 4.5% that can be locked in during today’s pullback. That dividend has increased at a CAGR of 12.4% during the last decade.

CIBC stock

Another industry that’s sure to be around no matter what happens are the Big Six banks. Canada’s Big Six banks performed at some of the best in the world during the Great Recession, rebounding within one year. That happened again during the market crash of March 2020. Bank stocks like Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) are back trading at all-time highs, with shares up 78% in the last year alone.

CIBC stock has been around for decades and has yet to miss a payout of its dividend. During the last decade alone, shares are up 161% for a CAGR of 10% as of writing. So, while you won’t get a deal on CIBC stock, you can depend on its growth trajectory.

CIBC stock currently offers the highest dividend yield of the Big Six banks at 4.41%. That yield has grown at a CAGR of 5.28% over the last decade. This is one of the dividend stocks that’s practically a must for stability in returns.

NorthWest Healthcare stock

Finally, the healthcare sector is another industry that simply isn’t going anywhere. World will continue to need hospitals, healthcare offices, pharmacies, and other healthcare properties pretty much until the end of time. That’s why investing in a company like Northwest Healthcare Properties REIT (TSX:NWH.UN) makes such great investment sense.

The company saw revenue explode, as its diverse range of healthcare properties around the world looked to renew lease agreements at low interest rate. The company now has an average lease agreement of 14.5 years! Talk about stability.

Shares have performed well also, up 54% in the last year and 97% in the last five years for a CAGR of 14.5% as of writing. Meanwhile, it offers a 6.02% dividend yield investors can lock in today. This is perfect among dividend stocks if you’re looking for secure funds for the rest of your life.

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 Amy Legate-Wolfe owns shares of NORTHWEST HEALTHCARE PPTYS REIT UNITS. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS.

More on Dividend Stocks

protect, safe, trust
Dividend Stocks

3 Safe Stocks for Beginners Amid Rising Volatility

Given their stable cash flows and healthy growth potential, these three safe stocks are excellent buys for beginners.

Read more »

money cash dividends
Dividend Stocks

Market Correction: 2 Oversold TSX Dividend Stocks to Buy for Total Returns

These top value stocks pay attractive dividends and look cheap to buy for a TFSA or RRSP focused on total…

Read more »

Dividend Stocks

2 Undervalued TSX Dividend Stocks to Buy in July

These unloved TSX dividend stocks could deliver attractive returns in the back half of 2022.

Read more »

sad concerned deep in thought
Dividend Stocks

$20 Billion Telco Merger: More Concessions and Conditions Ahead?

The mediation process in the proposed telco merger could lead to more concessions and conditions before the competition watchdog grants…

Read more »

Dividend Stocks

RRSP Investors: 2 Cheap TSX Dividend Stars to Buy for Total Returns

RRSP investors seeking attractive total returns can now buy top TSX dividend stock with high yields at discounted prices.

Read more »

rail train
Dividend Stocks

Canadian Pacific Railway (TSX:CP): A Top Wide-Moat Stock to Buy and Hold Forever

CP Rail keeps the goods moving around the country. Here’s why it’s a great pick for new investors.

Read more »

Businessmen teamwork brainstorming meeting.
Dividend Stocks

The 3 Top Large-Cap Stocks for TSX Investors

Have peace of mind by investing in top large-cap stocks during this market correction. Start researching BAM (TSX:BAM.A)(NYSE:BAM)!

Read more »

Golden crown on a red velvet background
Dividend Stocks

3 Dividend Aristocrat Stocks to Buy and Hold Forever

Three Dividend Aristocrats are excellent holdings for new and old investors with long-term financial goals.

Read more »