Many Canadian retirees live off on dividends and use their pensions for basic necessities or save them for emergency use. You too can have the same luxury by investing in forever stocks. Three companies are the most investor-friendly for their impeccable dividend track records.
Bank of Montreal (TSX:BMO)(NYSE:BMO) is the pioneer and started the practice in 1829. Its dividend sequence would be 200 years by 2029. Meanwhile, BCE (TSX:BCE)(NYSE:BCE) and Imperial Oil (TSX:IMO)(NYSE:IMO) have equally impressive dividend payment histories. Canada’s largest telecommunications company paid its first dividend in 1881, or when the telephone was relatively new. And the initial payout of Imperial Oil, ExxonMobil’s subsidiary, happened in the same year.
Buy these income-producing assets today, and you won’t have to sell them ever again.
Cash flow stability
BMO is Canada’s fourth-largest bank with its $90.2 billion market capitalization. Its dividend yield (3.03%) isn’t the highest in the financial sector, but it should be rock steady for decades. Still, investors can boost returns from price appreciation. At $139.85 per share, investors are up nearly 50% year to date.
Industry observers anticipate the Big Six banks, including BMO, will announce dividend increases very soon. The path to reward investors with higher dividends is clear following the lifting of restrictions recently by the banking regulator. BMO’s payout ratio stands at 39.55%, and therefore, management has room to raise the ratio between 50% and 60%. The bank has $6.2 billion in excess capital.
BMO also announced that it would deploy $300 billion in sustainable lending and underwriting to companies transitioning to the net zero world. The bank is the co-lead Green Structuring Agent. It issued $500 million in green bonds recently.
Return to pre-pandemic results
Since Q2 2020 or early in the pandemic era, BCE aimed to steadily improve its quarterly results. In Q3 2021, management proudly announced the return to pre-pandemic levels of BCE’s total revenue and adjusted EBITDA.
Mirko Bibic, concurrent president & CEO of BCE and Bell Canada, is happy with the Q3 results. He said they reflect the strong demand for the speed and connectivity advantages of its leading networks and services. BCE reported 0.8% and 9.9% growth, respectively, in operating revenues and net earnings versus Q3 2021.
The 65,779 retail internet net subscriber activations were the best quarterly performance in 15 years. Moreover, the 14.3% year-over-year growth in mobile phone net subscriber activations were the BCE’s best-ever Q3 post-paid churn rate (0.93%). You can’t pass up BCE today. At $64.90 per share, the dividend offer is 5.39%.
Energy’s Dividend King
Imperial Oil isn’t an energy giant in Canada, but it’s the sector’s Dividend King. The $30 billion oil producer has been paying dividends 140 years and has raised its dividends for 26 consecutive years. The stock trades at $44.03 per share — a total 101.48% gain in one year.
After three quarters in 2021, Imperial Oil’s net income is $1.66 billion, or a 2,377% spectacular turnaround. The company’s net loss of $711 million during the same period in 2020 was $711 million. In Q3 2021, cash flow from operating activities rose 128.5% to $908 million versus Q3 2020.
Best in the lot
BMO, BCE, and Imperial Oil are of a higher pedigree. They’re the best in the lot for everlasting passive income.