3 Dividend Stocks to Buy Before 2021 Ends

These dividend stocks provide investors with safe and stable income, even if uncertainty in the market continues well into the new year.

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Dividend stocks: it’s the one place where investors may actually feel safe these days. Dividend stocks offer a chance to get in on passive income that has practically nothing to do with how the S&P/TSX Composite Index is performing. You can continue to receive cash, even as the TSX crashes.

And it has been falling. The TSX is currently down 5% from 52-week highs. Unfortunately, the slump seems to be continuing with the Omicron variant, interest rates, supply chain disruptions, and inflation all weighing on the global economy.

That’s why it’s never been a better time to look at dividend stocks for long-term holding. You can get a stellar dividend yield at a cheap price that you can hold for decades. So, let’s look at some options.

Pipelines

A top choice for dividend stocks is in the pipeline industry. Pipeline companies offer long-term contracts that will continue paying out dividends, because gas will always keep running. In fact, pipeline companies have been expanding to keep up with production. And that includes Pembina Pipeline (TSX:PPL)(NYSE:PBA).

But Pembina isn’t stopping at oil and gas. The company recently made a partnership with TC Energy to begin a carbon-capture program. This helps the company create a new revenue stream, as the world transfers over to clean energy solutions.

Pembina stock is a steal right now with a share price at about $38. It trades at a forward price-to-earnings ratio of 15.24 and a 6.69% dividend yield. Further, it has a target price of $45, representing a potential upside of 18% as of writing. Shares are up 15% year to date.

Real estate

Next up, real estate has proven to be among some of the best dividend stocks out there. But you have to choose wisely. As we learned during the pandemic, real estate can suddenly collapse if no one is using their businesses. So, you’ll want to choose a company that will continue bringing in revenue.

For that, I would choose NorthWest Healthcare Property Units REIT (TSX:NWH.UN). The company holds a diverse range of healthcare properties across the world. Its lease agreements were signed on during the season of low interest rates, and it now has an average agreement of 14.1 years. Furthermore, it’s expanding rapidly, increasing its net asset value 11% year over year during its latest earnings report.

NorthWest offers a dividend yield of 6.01% as of writing and remains cheap at $13.41 with a P/E ratio of 6.59. Furthermore, it has a potential upside of 10% based on its current target price of $14.77. Shares are up 5% year to date.

E-commerce

Yes, you can get in on the e-commerce boom, even if you’re looking at dividend stocks. In fact, it’s a great way to see returns rise, even as e-commerce stocks remain volatile. You simply have to invest in industrial REITs. These also proved to stay open, even in the face of a pandemic, and have continued to expand as e-commerce has done so as well.

One of the best industrial REITs you can choose right now is Dream Industrial REIT (TSX:DIR.UN). Here, you get the advantage of a lower share price at $16.50 as of writing but a reasonably high dividend yield at 4.28%. The company has 326 properties and climbing, with net asset value climbing 18.8% year over year during its latest report.

Yet again, it’s a steal with $600 million in its acquisition pipeline, and a P/E ratio of seven at writing. Further, it has a potential upside of 23% to reach its target price as of writing. Shares are up 32% year to date.

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 NORTHWEST HEALTHCARE PPTYS REIT UNITS and PEMBINA PIPELINE CORPORATION. The Motley Fool recommends DREAM INDUSTRIAL REIT, NORTHWEST HEALTHCARE PPTYS REIT UNITS, and PEMBINA PIPELINE CORPORATION.

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