As a passive-income investor, you’re probably looking for dividend stocks with these traits: safe, ideally growing dividends and dividend yields that are decently high. Following Lowell Miller’s line of thought discussed in The Single Best Investment, a high yield is 1.5 to two times that of the stock market’s. The Canadian stock market yields about 2.55% at writing. 1.5 to two times that is about 3.8% to 5.1%. Here are three safe dividend stocks that provide safe dividends with yields that are at least within that range!
Passive-income investors love Enbridge stock
Enbridge (TSX:ENB)(NYSE:ENB) stock is popular for buy-and-hold, passive-income investors. The reason is none other than that it pays a big dividend yield. At $51.28 at writing, it yields 6.7%.
The leading North American energy infrastructure stock is low risk and highly predictable. It follows that its cash flow is highly predictable as well, which is why it has a long dividend-growth streak. Specifically, it has hiked its payout for 26 consecutive years.
The large-cap stock is still expected to increase its distributable cash flow per share by 5-7% per year. However, management is being conservative by raising its dividend at a rate of 3% in the last couple of years. First, it can improve its balance sheet. Second, it can maintain a safer payout ratio.
Also check out Manulife stock
Manulife (TSX:MFC)(NYSE:MFC) is a decent dividend stock for passive-income investors right now. It’s a value stock trading at about 7.9 times earnings, while analysts estimate an earnings-per-share growth rate of at least 8% annually over the next three to five years. Additionally, it has increased its dividend every year since 2014, earning its place on the list of Canadian Dividend Aristocrats. At $25.52 per share at writing, the dividend stock yields almost 5.2%, which is a juicy yield when compared to the stock market’s yield.
Here’s Brooke Thackray’s recent comment on the dividend stock:
“Manulife raised its dividend by 18%. It’s growing its business in North America and China. They have a dividend that pays over 5%. 80% of its business on the asset basis is based on fixed income. If we see rising rates, this is definitely going to be a company that will benefit from that. I like Manulife at this time.”
Brooke Thackray, research analyst at Horizons ETF Management Canada
NorthWest Healthcare Properties REIT
What’s more enjoyable for passive-income investors than getting big dividends from the likes of Enbridge and Manulife, which pay quarterly? That would be getting a monthly dividend from a high-yield stock. You can explore real estate investment trusts (REITs) like NorthWest Healthcare Properties REIT (TSX:NWH.UN) for a monthly dividend. Currently, the stable healthcare REIT yields 5.9%.
The global REIT collects rental income from hospitals, healthcare facilities, and medical office buildings. Its portfolio consists of about 192 properties. Its cash flow is highly stable, supported by a weighted average lease expiry of about 14 years. Its occupancy of roughly 97% is also reassuring to passive-income investors.
The stock of the essential business is likely to grind higher. The general analyst consensus expects approximately 9% upside over the next 12 months.
