One of the best aspects of investing is collecting juicy dividends. However, this requires investors to select investments that can provide reliable dividend streams that will persist over time.
Fortunately, the market is full of great dividend stocks that can provide the reliable dividend streams that investors want. Here’s a look at a trio of income stocks to help kickstart any income portfolio, even with just $3,000 to start.
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First, pick a good defensive stock
Defensive stocks are gaining in popularity recently, particularly as market volatility continues to remain high. That’s why picking a defensive stock as an anchor in establishing reliable dividend streams is key.
And that’s just one reason why Canadian Utilities (TSX:CU) is the cornerstone of that income portfolio.
As a utility stock, Canadian Utilities generates a reliable revenue stream that is backed by long-term, regulated contracts. That reliability also means that Canadian Utilities can continue to invest in growth while also paying a generous dividend.
As of the time of writing, that quarterly dividend works out to a tasty 4.93%. For investors with $3,000 to drop into Canadian Utilities, that works out to just over $144.
That’s not enough to retire on, but it is enough to generate a handful of shares each year through reinvestments, generating additional income.
Perhaps best of all, Canadian Utilities has an established tradition of providing investors with tasty annual bumps to the dividend. Specifically, Canadian Utilities has provided an annual increase for an incredible 53 consecutive years without fail.
That makes the stock one of just two Dividend Kings in Canada and a must-have for any investor looking to establish reliable dividend streams.
Next, go balance out growth and income
It would be impossible to compile a list of stocks that can generate reliable dividend streams without mentioning one of Canada’s big bank stocks.
And that bank stock for investors to look at today is Canadian Imperial Bank of Commerce (TSX:CM). CIBC isn’t the largest of the big banks, nor does it have a sprawling international presence.
What the bank does have is a strong domestic footprint, which generates a reliable revenue stream, and a smaller international footprint, focused on the U.S. market.
That reliable revenue stream also means that the bank can pay out a generous quarterly dividend while continuing to invest in growth. As of the time of writing, CIBC’s dividend works out to a tasty 4.76%.
Finally, get a high-yield dividend pick
The third stock to consider for reliable dividend streams is Enbridge (TSX:ENB). Enbridge is a top energy infrastructure pick that pays out one of the best dividends on the market.
The company also boasts a defensive and well-diversified portfolio of operations, adding to its overall appeal.
Specifically, that includes a pipeline business, a renewable energy operation, and a natural gas utility.
The pipeline business generates the bulk of Enbridge’s revenue, comprising both natural gas and crude elements. It’s also highly defensive, generating a reliable and growing source of revenue.
Turning to renewables, Enbridge operates a portfolio of wind, hydro and solar facilities located across Europe and North America. Like traditional utilities, these generate a reliable revenue stream backed by a long-term, regulated contract.
Speaking of utilities, Enbridge’s natural gas utility, which boasts seven million customers, provides yet another defensive revenue stream.
The result across all segments is a reliable, defensive operation that helps Enbridge pay out a handsome 6.09% yield. Using that same $3,000 initial example, investors looking to establish reliable dividend streams will generate just over $175.
Like Canadian Utilities, Enbridge has also provided annual increases to that dividend, boasting three decades of consecutive increases.
In short, Enbridge is a great stock to buy, hold and put your portfolio on autopilot thanks to reinvestments.
Generate reliable dividend streams today
Every stock, even the most defensive, carries some risk. That’s why the importance of diversifying is key. Fortunately, the trio of stocks mentioned above can provide that diversification while also boasting some defensive appeal.
In my opinion, one or all of the above should be core holdings in any well-diversified portfolio.
Buy them, hold them, and generate reliable dividend streams that will last decades.
