Want Year-Round Income? 4 Dividend Stocks Paying Consistently

If you’re someone who likes the sound of a steady, predictable income without having to watch the market every day, dividend stocks can be your best friend. And if you’re looking to spread those payments out across the calendar, a smart move is to own a few that pay in different months. In other words, think of building your own year-round paycheque.

That’s easier said than done, of course. Not all dividend stocks are created equal. Some cut payouts when the economy gets rough. Others are highly cyclical and depend on oil prices or retail trends. But the four stocks we’re diving into today have something in common. That’s a history of paying their dividends consistently, even through turbulence. So, let’s look further at Canadian Tire (TSX:CTC.A), Bank of Montreal (TSX:BMO), Cenovus Energy (TSX:CVE), and TELUS (TSX:T).

CTC

Let’s start with Canadian Tire. After posting second-quarter earnings last week, the dividend stock proved it’s not just a retail brand, it’s a financial engine. Normalized earnings per share (EPS) from continuing operations came in at $3.57, and while that was down slightly year over year, it was still strong considering the transformation it’s undergoing.

The “True North” strategy, which includes revamping stores, deepening customer loyalty, and acquiring Hudson’s Bay Company brand assets, is well underway. The dividend stock also declared a hefty dividend of $1.775 per share, payable in December. That’s an annual yield north of 4% as of writing. Despite a recent dip in the stock, long-term investors may see this as an opportunity, especially with the company repurchasing shares and investing for growth.

BMO

Then there’s Bank of Montreal. BMO has always been a solid pick for dividend seekers, and its recent results back that up. The dividend stock raised its quarterly dividend to $1.63 per share after reporting adjusted net income of $2.05 billion and adjusted EPS of $2.62.

Return on equity came in at 9.8%, which isn’t spectacular, but for a Canadian bank in a higher-rate environment with increased loan-loss provisions, it’s not bad either. Plus, BMO is taking proactive steps, buying back shares and tightening its balance sheet. The dividend hike is yet another sign that management is confident in the bank’s earnings power going forward.

CVE

Energy names tend to be more volatile, but Cenovus is finding its footing. The second quarter brought in $2.4 billion in cash from operations and $355 million in free funds flow, even after planned maintenance and production hits from wildfires. That’s a drop from earlier this year, but the dividend stock is nearing completion on several big projects like Narrows Lake and West White Rose.

It returned over $800 million to shareholders last quarter, including nearly $370 million in dividends. For those who like some energy exposure without too much risk, this is one of the better-run firms in the sector.

T

Last, but never least in the telecom world, is TELUS. While its profit margin remains modest, the dividend stock is executing well on its strategic priorities. It added 198,000 new customers in the last quarter and posted free cash flow of $535 million, up 11% from last year. That cash is going into reducing debt and rewarding shareholders.

TELUS is still targeting roughly $2.15 billion in free cash flow for the year, and it recently announced a monetization deal with La Caisse for $1.26 billion. This helps keep its dividend sustainable despite the higher leverage from past investments.

Bottom line

What’s the catch? Well, no dividend is guaranteed. Canadian Tire is retail-heavy, which makes it vulnerable in a downturn. BMO is exposed to credit risks and a slowing consumer. Cenovus depends on oil prices, and TELUS has high debt. But none of these companies have shown signs of pulling back on dividends, and right now, $5,000 in each could bring in $989 annually!

So, if you’re looking to build a year-round income portfolio, these four names offer diversification and a steady stream of cash flow you can count on.