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.
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.
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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.