Does your portfolio have a selection of dividend-paying stocks that can provide a lifetime income stream?
While there’s no shortage of great stocks on the market, some of those stocks are clearly better than others. Here’s a look at a duo of lifetime income stocks that should be on the radar of investors everywhere.
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Option #1: The bank
It would be nearly impossible to talk about lifetime income generation investments without mentioning at least one of the big bank stocks.
And that big bank stock to consider right now is Bank of Nova Scotia (TSX: BNS). Scotiabank is the most international of the big banks, with an international presence in over a dozen countries across the world.
That international segment serves as the primary growth driver for Scotiabank. In recent years, the bank has shifted its focus to mature markets in North America over developing markets in Latin America.
While the international segment caters to growth, Scotiabank’s strong domestic segment provides a source of steady, recurring revenue to fund growth and the bank’s quarterly dividend.
That dividend can be one of the main sources of lifetime income. As of the time of writing, Scotiabank’s quarterly dividend carries a robust 4.81% yield, making it a solid option for any portfolio.
Option #2: The defensive titan
Just as lifetime income conjures images of the big banks, it also highlights another stellar pick for investors: utility stocks.
Fortis (TSX: FTS) is one of the largest utility stocks in North America. The company operates across 10 operating regions that include 10 U.S. states, five provinces in Canada, and three Caribbean countries.
More importantly, those operating regions provide a stable and recurring source of revenue that is backed by long-term, regulated contracts. Those contracts often span decades and allow Fortis to invest in growth initiatives and pay out a handsome dividend.
The intriguing part about Fortis is that the stock differs from other traditional utilities. More specifically, it differs from the stereotype of other utilities as being boring investments with little growth.
Fortis takes an aggressive stance on expansion. The company has impressively expanded over the years, making it into the utility titan it is today.
That growth has also allowed the company to expand into new markets in a complementary fashion, catering to both generation, transmission and distribution elements across its energy network.
In terms of a dividend, Fortis offers investors a quarterly dividend. As of the time of writing, that dividend works out to an impressive 3.45% yield. Even better, the company has provided an impressive 52 years of consecutive annual increases.
That most recent uptick was a 4.1% increase announced just this week.
That fact alone makes this the lifetime income stock for your portfolio.
What are your lifetime income stocks?
No stock is without risk, but Fortis and Bank of Nova Scotia both offer investors ample defensive appeal and growth potential to balance out that lifetime income potential.
In my opinion, one or both should be core holdings in any well-diversified portfolio.
Buy them, hold them, and watch your future lifetime income compound over time.
