Lifetime Income: 3 Dividend Stocks to Buy and Never Sell

Three dividend stocks with lengthy corporate existence can provide investors with income for life.

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Can dividend stocks provide a lifetime income? The answer is yes if the dividend-paying companies are Bank of Montreal (TSX:BMO), Imperial Oil (TSX:IMO), and Canadian Utilities (TSX:CU). If you buy the stocks today for passive income, selling them will never be a consideration.

BMO, Canada’s oldest bank, was established in 1817, while Imperial Oil was formed in 1880. Canadian Utilities, TSX’s first Dividend King, was incorporated in 1927. Their lengthy corporate existence is proof of financial stability; otherwise, none of them would be standing tall in the 21st century.

Dividend pioneer

BMO is also Canada’s dividend pioneer. The first payout was in 1829, and the track record is six years shy of 200 years. With its market cap of $93.87 billion, BMO is the country’s third-largest lender after Royal Bank of Canada and Toronto-Dominion Bank.

The Big Bank’s chief executive officer (CEO), Darryl White, acknowledges that the deal to acquire Bank of the West in the U.S. was huge and complex. However, BMO pulled through because of exceptional planning. White said the Canadian bank is at the starting line to realize the full benefit of its expanded scale. The plan is to leverage its position as a top 10 U.S. bank supported by a $1.3 trillion balance sheet.

BMO expects its high-impact marketing campaign across the expanded footprint to drive brand awareness. By the second quarter (Q2) of fiscal 2024, the run-rate synergies at the Bank of the West would be over $800 million. The dividend pioneer trades at $130.21 per share and pays a hefty 4.64% dividend.

Dividend Aristocrat

Due to 28 consecutive years of dividend increases, Imperial Oil is a Dividend Aristocrat. At $75.06 per share, the dividend yield is a decent 2.66%. American oil giant backs the $40.22 billion integrated energy producer. Exxon Mobil has a 69.6% ownership stake in the Canadian firm.

Its chairman, president, and CEO, Brad Corson, disclosed a capital spending budget of $1.7 billion and a strategic agenda for 2024. Imperial Oil expects to achieve milestones in the coming year, including profitable volume growth at Kearl (oil sands mining) and production at the first solvent-assisted Steam-Assisted Gravity Drainage project with Cold Lake Grand Rapids.

Imperial Oil will also advance the construction of the Strathcona Renewable Diesel facility, Canada’s largest renewable diesel facility. The production should commence in early 2025.  

Dividend King

A dividend stock that wears a crown is a no-brainer buy. Canadian Utilities has increased its common share dividend for 51 consecutive years. At $31.48 per share, you can partake of the 5.70% dividend. The highly contracted and regulated earnings base of this $8.73 billion energy infrastructure company is the foundation for continued dividend growth.  

Canadian Utilities plans to invest around $4.1 billion in regulated utility and commercially secured capital growth projects from 2023 to 2025. The new investments should contribute significantly to earnings and cash flows while creating long-term shareholder value.

Excellent choices

A dividend pioneer, Dividend Aristocrat, and Dividend King are excellent investment choices for income investors. Owning them in a stock portfolio is like having non-stop cash flow streams. The dividends could be your sustenance in retirement and could last for a lifetime.

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.

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