2 Monthly Income Buys to Hold Forever

Looking for a selection of monthly income buys that can offer growth for a decade or more? Here are two great options to consider today.

| More on:
Various Canadian dollars in gray pants pocket

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

Finding the right mix of growth and income-producing investments should be an objective for every investor. Fortunately, the market gives us plenty of options that offer growth and income. Finding monthly income buys that can provide growth prospects to accomplish both goals are rare, but they do exist.

Here are two stocks that meet both objectives.

Telecoms make great additions to any portfolio

Telecoms are notoriously great investments. They offer handsome dividends and strong growth in a very defensive package.

Shaw Communications (TSX:SJR.B)(NYSE:SJR) is neither the largest nor most well known of Canada’s telecoms. In fact, prior to several years ago, Shaw lacked a wireless segment to counter what its larger peers can offer. So, what exactly makes this a great buy that can also offer growth?

That would come in the form of Shaw’s still-new mobile segment, appropriately known as Freedom Mobile. Shaw marketed this segment as a true competitor and a different option over its larger peers. Specifically, Shaw aggressively marketed its wireless product with generous data allowances and lower, contract-free pricing.

Those efforts have worked well in that Shaw has solidified itself as the fourth-largest wireless carrier in Canada, continuing to see strong growth. By way of example, in the most recent quarter, Shaw’s reported an 8.5% bump in wireless service revenue.

Further to that, Shaw is unique among its peers in offering a dividend with a monthly payout. The current dividend on offer works out to a respectable 3.34%. To put that earnings potential into context, a $20,000 investment in Shaw will provide just over $55 each month in the first year. Factor in reinvestments and growth, and you have a great monthly income stock for any portfolio.

Renewable energy should be a core holding

Renewable energy stocks are intriguing options that continue to grow in importance. Traditional fossil fuel-burning utilities are now faced with multi-billion-dollar transitions to cleaner energy. This puts all-renewable utilities at a significant advantage over their traditional peers.

In other words, the time has never been better for prospective investors looking for the stability of a utility stock and the opportunity for long-term growth. For those investors, TransAlta Renewables (TSX:RNW) could be one of several perfect monthly income buys.

TransAlta has a well-diversified portfolio of facilities that encompass different technologies in the U.S., Canada, and Australia. In total, those facilities have just over 2,500 MW of net generating capacity.

Adding to that appeal is the fact that TransAlta follows the same lucrative business model that makes traditional utilities such great defensive holdings. Specifically, TransAlta has long-term regulatory contracts in place that provide a steady, recurring source of revenue for the company. Most of TransAlta’s facilities have a contract expiration of at least a decade out.

That stable revenue stream helps TransAlta provide a juicy monthly dividend to investors. The current yield works out to an attractive 4.52%, making it one of the better options on the market. In other words, a $30,000 investment in TransAlta will provide a monthly income of $113.

These monthly income buys are great: Will you buy them?

Monthly income buys such as Shaw and TransAlta are great options to consider for any portfolio. Keep in mind that reinvesting the monthly income that they provide until such time as it is needed can provide even bigger gains for long-term investors.

Further to this, both stocks offer long-term growth potential, making them great buy-and-forget options for nearly any portfolio.

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 Demetris Afxentiou owns shares of Shaw Communications.

More on Dividend Stocks

edit Back view of hugging couple standing with real estate agent in front of house for sale
Dividend Stocks

Why Real Estate Stocks Are a No-Brainer Addition to Your Portfolio

Real estate stocks, especially REITs, offer some distinct advantages over other types of stocks, making them must-have additions to most…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

3 Top TSX Dividend Stocks to Buy for Monthly Passive Income

Top TSX stocks with monthly dividends now trade at cheap prices for investors seeking passive income.

Read more »

Canadian Dollars
Dividend Stocks

Create Free Passive Income and Turn it Into Thousands With 1 TSX Stock

If you can't afford to invest, you can certainly create passive income another way and use that to invest in…

Read more »

Payday ringed on a calendar
Dividend Stocks

Canadian Dividend Investors: 2 ETFs That Pay Monthly Income With High Yields

Dividend ETFs often pay out monthly distributions compared to dividend stocks.

Read more »

think thought consider
Dividend Stocks

2 Stocks I Own and Will Buy More of if They Fall

Stocks tend to go up in the long run. Therefore, buying a basket of diversified stocks on dips should lead…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

2 Oversold TSX Dividend Stocks to Buy for Passive Income

Blue-chip dividend stocks such as Royal Bank of Canada and Manulife Financial pay investors a tasty forward yield.

Read more »

TFSA and coins
Dividend Stocks

TFSA Passive Income: 3 Solid Stocks to Earn $355 Every Month

Looking to earn steady passive income? Here are three solid TSX stocks that can help you earn a worry-free passive…

Read more »

Technology
Dividend Stocks

RRSP Investors: 2 Stocks to Buy in August for Dividends and Capital Gains

RRSP investors can still find top TSX dividend stocks trading at cheap prices today for a buy-and-hold portfolio.

Read more »