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2 Top TSX Dividend Stocks to Buy in September and Never Sell

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Dividend stocks are important for many TSX investors. Many GICs, bonds, and savings accounts just don’t earn a positive return after inflation. Consequently, income-producing stocks have become the go-to for many investors this year.

Diversify in high-quality, forever-own TSX dividend stocks

If you are looking to build a stable, growing income portfolio there are a few keys to remember. First, own a variety of stocks in a diverse array of sectors. This is a great portfolio hedge and a way to ensure that your cash flows are not overly affected by the cyclicality of one industry.

Second, seek quality over quantity. By this I mean, don’t just buy stocks with the highest yield. If a stock is consistently growing its dividend payout, chances are good it is doing so because its business is operating well and it is producing growing streams of cash flow.

Finally, plan to buy and hold the best businesses for as long as possible. Warren Buffett once said, “All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies.” With this in mind, here are two top TSX dividend stocks I would plan to buy and hold for forever.

Brookfield Infrastructure Partners: A top global infrastructure stock

As society modernizes and continues to populate, demand for infrastructure in energy, electricity, transportation, data, and cellular services will only increase. That is why I love Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP). It is one of the only stocks in the world that focuses specifically on owning and managing a global array of crucial infrastructure assets.

In the past, the company has labelled itself a “growtility.” Most of its assets are contracted or regulated, so it captures a stable baseline of regular cash flows. Yet, over 70% of its businesses have inflation-indexed contracts or they benefit from strong overall economic activity (i.e., higher volumes or tolls). Likewise, the company has numerous organic growth initiatives to expand its operations and increase its rate base.

This company has a great balance sheet and the backing of its well-capitalized parent, Brookfield Asset Management. It recently utilized these resources to acquire control of Inter Pipeline, a large Canadian midstream and energy processing business.

While this TSX stock only pays a 3.6% dividend, it has grown that dividend on average by 10% a year. Investors can expect more of the same as it grows organically and from acquisitions.

Dream Industrial REIT: A top TSX real estate stock

Industrial real estate is becoming recognized as an infrastructure-like asset. E-commerce continues to be normalized in our shopping habits. Likewise, the COVID-19 pandemic is leading more manufactures to now on-shore operations.

As a result, industrial real estate demand has exploded. That bodes very well for Dream Industrial REIT (TSX:DIR.UN). This TSX stock owns very well-located warehousing, distribution, and logistics properties across Canada, the United States, and Europe.

In its most recent quarter, the value of its property portfolio expanded year-over-year by 16.5%!  That just indicates how quickly rental rates and subsequently, the value of its properties are rising.

This REIT has a very low levered balance sheet and an incredibly low cost of debt (around 1.5%), giving it significant financial flexibility to keep growing its development and acquisition pipeline.

This year, Dream expects to grow cash flows per share by around 10%. Given its strong fundamentals, investors can likely expect more of the same in the future as well. This TSX stock pays a great 4.1% dividend today, but that may rise if it continues to enjoy the same market strength in the future.

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 Robin Brown owns shares of Brookfield Asset Management Inc. CL.A LV, Brookfield Infrastructure Partners, and DREAM INDUSTRIAL REIT. The Motley Fool owns shares of and recommends Brookfield Asset Management. The Motley Fool recommends Brookfield Asset Management Inc. CL.A LV, Brookfield Infra Partners LP Units, Brookfield Infrastructure Partners, and DREAM INDUSTRIAL REIT.

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