3 Stable Income Stocks With Huge Potential

The market is full of great investments, but few can attest to being stable income stocks with huge potential. Here’s three that do.

| More on:
analyze data

Image source: Getty Images

Attaining the perfect balance between income- and growth-generating investments can take time. Fortunately, the market gives us plenty of options to consider. Here are three stable income stocks to consider adding to your portfolio.

Telecoms make great investments

There are few stocks on the market that can match BCE (TSX:BCE)(NYSE:BCE) as an investment. As one of the largest telecoms in the country, BCE generates a stable revenue stream from its core subscription offerings. This includes the incredibly popular and rapidly growing wireless segment.

The company also has a lucrative media segment comprising of dozens of radio and TV stations, which adds yet another revenue stream.

Turning to dividends, BCE offers investors a quarterly payment. The yield on that dividend currently works out to a tasty 5.33%, making it one of the better payouts on the market. Adding to that appeal is the fact that BCE has been paying out dividends for well over a century.

This fact alone makes BCE one of the stable stocks to buy and forget about for decades.

Banking on growth and income to continue

You can’t assemble a list of stable income stocks without mentioning at least one of Canada’s big banks. The bank in particular that I’m thinking about now is Toronto-Dominion Bank (TSX:TD)(NYSE:TD). TD is the second largest of Canada’s big banks, boasting both a strong domestic segment at home and a growing U.S. segment.

That U.S. segment holds immense long-term potential. TD stitched together an impressive network along the east coast of the U.S. after acquiring several smaller regional banks. TD’s U.S. network now has more branches than its Canadian counterpart and stretches from Maine to Florida.

As a reminder, the pandemic-attributed moratorium on dividend hikes at Canada’s banks was lifted last month. TD followed suit with a juicy 12.7% dividend hike and announced the bank would be buying back approximately 50 million shares.

Speaking of dividends, TD offers a juicy quarterly payout which works out to a yield of 3.70%. Like BCE, TD has an established history of paying out dividends without fail that stretches back over a century. Like its big-bank peers, TD has maintained a payout level in the 40% range, making it a stable stock to own.

Make way for our future Dividend King!

As impressive as all of the companies on this list of stable stocks are, there are none that yet qualify as a Dividend King. That’s the term reserved for companies that have amassed a whopping 50 consecutive years of dividend hikes. Right now, there are no Dividend Kings in Canada, but that may soon change.

Canadian Utilities (TSX:CU), with 49 consecutive years of increases, is set to become that first Dividend King. As of the time of writing, Canadian Utilities offers a yield of 4.84% making it a must-have on any list of stable income stocks.

That stability is backed by the lucrative business model that utilities follow. Long-term regulated contracts provide a stable and recurring revenue stream for the company. In total, Canadian Utilities boasts two million utility customers.

In short, Canadian Utilities is a great, low-risk, stable investment that can provide decades of income and growth.

These stable income stocks could be in your portfolio

All stocks carry some risk. Fortunately, the three stocks outlined above have some defensive appeal. This makes them ideal candidates for any portfolio, and not just as stable income stocks.

Buy them, hold them, and let them power your portfolio to new highs.

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 The Toronto-Dominion Bank. The Motley Fool has no position in any of the stocks mentioned.

More on Dividend Stocks

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

think thought consider
Dividend Stocks

Down 10.88%: Is ATD Stock a Good Buy After Earnings?

Alimentation Couche-Tard (TSX:ATD) stock might not be the easy buy-case it once was. Here’s a look at what happened.

Read more »

money cash dividends
Dividend Stocks

TFSA Dividend Stocks: Earn $1,200/Year Tax-Free

Canadian stocks like Fortis are a must-have in your portfolio to earn tax-free yields for decades.

Read more »

sale discount best price
Dividend Stocks

1 Dividend Stock Down 11 Percent to Buy Right Now

Do you want a great dividend stock down 11% that can provide years of growth potential? Here's one heavily discounted…

Read more »

Growth from coins
Dividend Stocks

1 Grade A Dividend Stock Down 11% to Buy and Hold Forever 

If you're looking for the right dividend stock at the right price, you're going to want to consider this insurance…

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Are you looking for dividend stocks to buy right now? Here are two top picks!

Read more »

edit Taxes CRA
Dividend Stocks

Tax Time: How to Keep More of Your Money

Nearly everyone hates paying taxes, although Canadians can lessen the financial pain with the right tax strategies.

Read more »