Dividend Investors: 3 Stocks for Decades of Passive Income

Investors can receive decades of passive income from three well-established, reliable dividend payers.

| More on:
clock time

Image source: Getty Images

People invest in dividend stocks primarily to receive regular income streams, although a second benefit of price appreciation is most welcome. During inflationary periods like today, dividends help preserve purchasing power and fight inflation. If you’re in the market for the long term, pick reliable dividend payers to ensure success.

Companies like the Toronto-Dominion Bank (TSX:TD), Parkland Corporation (TSX:PKI), and Thomson Reuters (TSX:TRI) can provide investors with decades of passive income. The first stock has a dividend track record of 166 years and counting, while the next two are dividend growers. Since the companies are well-established in their respective industries, the stocks are less prone to market volatility.

A soon-to-be top 6 U.S. bank

TD is Canada’s second-largest lender and North America’s fifth-largest bank by asset size. The $152.4 billion financial institution is attempting to acquire Memphis-based First Horizon and if the transaction is complete, it will become a top-six U.S. bank.

According to published reports, the parties have extended the merger agreement date to May 27, 2023. While the deal is pending, most industry analysts are confident it will eventually close. Under TD’s five-year plan and combined footprint with First Horizon, 25% of new branches will be in low- and moderate-income or majority-minority markets.

Meanwhile, TD will satisfy investors with its quarterly dividends. At $83.28 per share (-2.82% year to date), the dividend offer is 4.61%. The Big Bank has a Dividend Reinvestment Plan for investors wishing to receive additional shares instead of cash dividends.

Diversified and resilient business model

Parkland started operations in 1977 and is a dividend aristocrat owing to 10 consecutive years of dividend hikes. If you invest today, the share price is $31.50 (+7.29% year to date), while the dividend yield is 4.28%. The $5.5 billion energy and retail company supplies and markets petroleum products in Canada, the U.S., and the Caribbean and operates convenience stores as a complementing business.

In 2022, sales and net earnings climbed 65% and 157% year over year to $35.4 billion and $416 million, respectively. Management said Parkland is strategically growing because of the diversified and resilient business model. Also, there’s a clear pathway to hit $2 billion in adjusted EBITDA by 2025.

Industry leader

Thomson Reuters trades slightly higher ($174.59 per share) and pays a modest dividend (1.55%). However, the industrial stock is a steady performer with its market-beating positive return of 13.5% thus far in 2023. The company has been around since 1851 and boasts a dividend growth streak of 29 years.  

Today, the $82 billion business information service provider is a leading firm with a solid competitive position in the Legal, Corporates, Tax & Accounting, and Government market segments. Since 79% of revenues are recurring, Thomson Reuters generates strong and consistent cash flows.  

In 2022, revenue and free cash flow rose 4% and 7% to US$6.6 billion and US$1.3 billion, respectively, versus 2021. Notably, operating profit jumped 48% year over year to US$1.8 billion. Steve Hasker, Thomson Reuters’ President and CEO, said, “Looking ahead, we remain focused on allocating capital to drive sustainable long-term value creation.”

Proven strategy

Dividend investing is a proven strategy for investors with low-risk appetites. However, success highly depends on stock choices. TD, Parkland, and Thomson Reuters are reliable passive income providers because they generate predictable cash flows across economic cycles.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

U.S. Debt Ceiling: Is It Safe to Invest Right Now?

The U.S. debt ceiling is in the headlines again. You can play it safe by investing long term in wonderful…

Read more »

analyze data
Dividend Stocks

How to Invest $20,000 to Make Ultra-Safe Passive Income

Got $20,000 to invest for passive income? These three stocks are perfect for earning ultra-safe passive income for the long…

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

For Passive Income: How to Turn $25,000 Into $158 Per Month

High-yield, monthly dividend stocks trading on the TSX such as Slate Grocery can help you earn a predictable stream of…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

2 Canadian Dividend Stocks to Buy for Consistent Passive Income

These top dividend stocks have raised their distributions annually for more than two decades.

Read more »

Piggy bank next to a financial report
Dividend Stocks

Self-Directed RRSP: 2 Top Dividend Stocks to Buy in June 2023

These top TSX dividend stocks look cheap to buy today and offer attractive dividend yields.

Read more »

Dividend Stocks

Looking for Reliable Retirement Income? Consider These Dividend-paying Stocks

National Bank of Canada and another reliable income stock that could be a perfect fit for your retirement fund this…

Read more »

grow money, wealth build
Dividend Stocks

Are You Looking for High-Yield Investments? 3 TSX Stocks That Offer Excellent Payouts

These dividend stocks all offer solid payouts, as well as yields in the five to six percent range. So get…

Read more »

A golden egg in a nest
Dividend Stocks

2 Great Stocks If You’re Building a DIY Nest Egg

Canadian Tire and another intriguing value stock that could be attractive for deep value investors.

Read more »