2 Top Dividend Stocks to Buy With Decades of Passive-Income Potential

If you’re looking to buy dividend stocks, make sure they’ll continue to pay out by investing in these two companies.

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It’s really hard to look past what’s going on in the markets right now. There is so much negativity, with all that work investors have done over the past few years suddenly going completely to waste. We went into growth stocks hoping for amazing results. Now, we want dividend stocks to make up for all that volatility.

But be careful. Just because a company has a dividend doesn’t mean you’re suddenly going to see lots of income for life. In fact, you seriously need to consider how you’ll be able to keep up those passive-income payments should the company fall flat.

Take this sector

Oil and gas companies have long been a strong place to seek out long-term passive income. However, this slowly no longer becoming the case. These dividend stocks are trying to keep up payments, but even the Organization of Petroleum Exporting Countries (OPEC+) admits that by 2040, oil and gas will mainly be used by low-income countries.

With that in mind, these dividend payments are not going to be around in the next 20 years or even less. So, that means, if you’re hoping for payments beyond that point, it’s time to look elsewhere. This is why I would consider this sector instead.

Infrastructure!

What’s great about infrastructure is you can still take advantage of the growth happening in oil and gas stocks right now while also locking in long-term income. While many of us may associate infrastructure to oil and gas companies such as pipelines, infrastructure is so much more.

Infrastructure makes up everything we do. Whether it’s using the washroom or turning on your stove, you need something to power those items in your home. The roads we drive on and the water we drink — it’s all powered by infrastructure. And a massive growth boom is likely to come our way over the next few decades. That’s why I would consider this sector for solid long-term income.

Two long-term dividend stocks to consider

With that in mind, the two dividend stocks I would consider in this area are Brookfield Infrastructure Partners (TSX:BIP.UN) and Canadian Utilities (TSX:CU). Both companies power infrastructure but in different ways.

For Brookfield, the company has a diversified range of assets located in companies all around the world. It invests in pipelines and oil and gas but also invests in water treatment facilities and other necessities. Because of this, it’s a solid long-term option that currently offers a dividend yield at 4.02% as of writing.

Canadian Utilities is the strongest of the dividend stocks to consider, as it’s the only Dividend King on the TSX today. While that should change in the future, it’s still a strong option that proves you can receive passive-income increases in the years to come as well as solid payouts for decades. That’s thanks to investing in gas utilities as well as hydro, wind, and solar power. So, it can seamlessly make the energy transition in the future.

Investors can lock in a yield at 5.04% as of writing.

Bottom line

If you want solid income for life, that means looking for infrastructure — things that are going to continue to be necessities in the years and decades to come. Plus, there is a massive growth opportunity coming with so much infrastructure needed over the coming years. I would certainly lock in these dividend yields while they’re down but not out.

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 has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infra Partners LP Units. The Motley Fool has a disclosure policy.

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