While stocks are still settling from a turbulent 2020, many are still attractive options for long-term investing. Income investors in particular can scoop up shares of blue-chip gems offering stable dividends at reasonable price points.
When looking to generate income from investments, the size of the yield is only one piece of the puzzle. The dividend also has to be sustainable, and the company needs to have solid prospects moving forward so it can remain that way.
So, following that it’s possible to identify the type of stocks an income investor might be interested in. These are generally reliable, blue-chip stocks with diverse ways of generating revenue.
Today, we’ll look at two such dividend superstars ideal for this style.
BCE (TSX:BCE)(NYSE:BCE) is a large Canadian holding company for the Bell Canada group of companies. Through its subsidiaries, it offers a wide range of services in the telecommunications and media space.
BCE has long been an exemplary option for long-term income investors. It typically pays a handsome dividend and has frequently increased its dividend over time.
Its wide moat of revenue-generating services with resilient and non-cyclical demand help it offer value to investors. When it comes to stocks involved in the telecom space, BCE is a top name for investors to consider.
The company has continued to expand its media asset collection and will also look to provide premier service with 5G networks for Canadians. These are areas that could contribute to growth for BCE moving forward.
As of this writing, this TSX gem is trading at $56.81 and yielding 6.16%. With a yield north of 6%, income investors should be very intrigued by BCE.
While the dividend-payout ratio is over 100% as of this writing, BCE is equipped to weather the current dry spell. As things start to pick up a bit more moving forward, expect that ratio to fall more in line with a more manageable figure.
For investors looking to generate income with a top Canadian media company, BCE is a great choice.
Bank of Montreal (TSX:BMO)(NYSE:BMO) is one of the major banks in Canada. It separates itself from some of its peers with its lending portfolio and growing U.S. presence.
Truth be told, all the major Canadian banks make for fairly attractive options for income investors. They all offer rock-solid stability and wide moats of revenue for investors to count on.
However, BMO is an interesting option because of its growth potential in the United States. This market could be a major key for BMO’s revenue growth moving forward and help the bank continue to deliver value for investors.
Not to mention, BMO has the longest dividend streak amongst the big banks. It’s paid a dividend every year since 1829 and grown the dividend for most of that time as well.
As of this writing, BMO is trading at $111.03 and yielding 3.82%. While it’s not the largest yield around, it’s attached to a revered name in dividend investing.
BMO blends stability and growth perfectly for income investors looking to make a long-term investment. Be sure to give this banking giant further consideration as a passive-income option.
Income investor strategy
If you’re looking to add some extra income-generating stocks to your portfolio, these two TSX blue-chips deserve a good look.
But what about stocks ready to take off?
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Iain and his team just published a detailed report on this tiny TSX stock. Find out how you can access the NEXT Shopify today!
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 Jared Seguin has no position in any of the stocks mentioned.