Dividend stocks are great to hold when the markets head sideways, downward, or fluctuate in some sort of range. If the broader markets don’t make it easy to get some kind of capital appreciation, you may as well ensure you’re paid cash dividends for your investment. Believe it or not, even small dividends can make a big difference over the long run. Of course, you need to make sure a dividend is secure, with a history of growth. Otherwise, the high upfront yield (the yield that exists at the time of purchase) may not tell the full story.
In this piece, we’ll look at three exceptional dividend stocks with safe payouts that could grow at a consistent rate over time. Their dividend-growth track records are remarkable, as too are their ability to persevere through more challenging economic environments.
Remember: truly wonderful stocks should be judged on how they do when times are less than ideal. As Mr. Market wanders into an economic downturn, the following names seem like a good value for your investment dollar.
Without further ado, consider shares of Bank of Montreal (TSX:BMO), Great-West Lifeco (TSX:GWO), and Enbridge (TSX:ENB).
Bank of Montreal: 4.7% dividend yield
Bank of Montreal is a Big Six Canadian bank that’s been under a bit more pressure lately, thanks in part to regional bank runs south of the border. Indeed, Bank of Montreal may be a Canadian bank, but it’s growing its presence in the United States by leaps and bounds. The bank closed its Bank of the West deal earlier this year for US$16.3 billion.
The move adds 1.8 million customers to Bank of Montreal’s base. Looking back, the deal isn’t looking too incredible after the shockwaves sent through the banking scene over the past month. Still, I think BMO can make it worth their while. BMO stock has already been punished, now down around 20% from its peak. At 6.1 times trailing price to earnings (P/E), BMO is a dividend gem that looks to be discounted.
Great-West Lifeco: 5.5% dividend yield
Great-West Lifeco is an insurance play that’s incredibly well run. The stock is rallied over 30% off its 2022 lows and is within striking distance of new highs in the $41-per-share range. Ultimately, I think shares could break out this year, as it continues prudently pushing into a harsh environment.
At 11.1 times trailing P/E, GWO stock is a low-cost way to get a yield north of 5.5%. I view the payout as safe and subject to growth, as the firm continues to demonstrate its resilience.
Enbridge: 6.6% dividend yield
Finally, we have pipeline behemoth Enbridge, which has seen its 2021-22 rally stall out in a major way. I think the $108 billion firm is an intriguing option for long-term thinkers who don’t mind a bit of choppiness.
The stock is off around 10% from its all-time high and boasts a modest two times price-to-sales multiple. Though this macro environment could prove a bumpy one, Enbridge has demonstrated that it’s willing to keep rewarding investors with annual dividend hikes, regardless of how hostile the climate. Enbridge’s managers are very shareholder friendly. Over time, they’re likely to keep the dividend spoils coming.