Advertisement

3 Dividend Stocks to Create Riches for Decades

Growing plant shoots on coins
Image source: Getty Images

Written by Amy Legate-Wolfe at The Motley Fool Canada

Ready to make some real income, but don’t have the time? Yeah, we can all feel that way, which is why passive income is the best answer. But if you’re looking to create passive income, it usually doesn’t come easy.

You have to find a method of creating income on a regular basis, without lifting a finger! That means real estate is out of the question. Sure, you make the purchase, but what about all the work and payments that go along with it?

That’s why passive income stocks are the best way to get into passive income streams. So right now, I’m going to show you three dividend stocks for your portfolio to get rich, without dying over it.

CIBC stock

Now granted, analysts haven’t been impressed with Canadian Imperial Bank of Commerce (TSX:CM) lately. Rightly so, as the housing market, where CIBC stock is heavily invested, hasn’t been an impressive place. Furthermore, rising costs from the bank have hampered earnings.

Shares of CIBC stock are now down 21% as of writing in the last year. However, the bank did manage to post better-than-expected earnings results recently, providing some hope on the horizon. So Canada doesn’t seem like such a bad place to be after all.

CIBC stock has also rebounded from downturns within a year of hitting 52-week lows. So it’s a great time to consider the stock. It’s still up 39% in the last decade, providing a compound annual growth rate (CAGR) of 3.5%, which is highly conservative. Further, you can latch onto passive income at a high 6.01% yield.

Brookfield Renewable Partners

Another strong long-term option is Brookfield Renewable Partners LP (TSX:BEP.UN). This stock is going through the similar problem of incurring new costs during higher inflation and interest rates. But Brookfield stock seems to be getting the hang of things as these costs stabilize.

It’s therefore a strong choice while shares are still down, especially with the potential for huge gains from the renewable energy sector. Shares are now down 11% in the last year alone, but have popped back up slightly in the last few months.

Looking long term, Brookfield stock has been a solid choice over the last decade or so. Shares are up 153% in that time as of writing, providing a CAGR at 9.5%. Again, this is more on the conservative side since shares have dropped so much. Plus, you can bring in a dividend yield at 4.31% as of writing.

Slate Grocery REIT

Analysts love Slate Grocery REIT (TSX:SGR.UN) for its stable cash flows from leasing grocery-anchored properties across the United States. What’s more, the company has partnerships with huge brand names, as well as smaller chains. This diversified portfolio provides far more stable cash flow than you would see in Canada, where large grocery chains hold the market with an iron fist.

Slate stock is a great deal with shares down 13% in the last year, trading at just 6.5 times earnings as of writing. Again, it has the potential for a major turnaround as investors realize the cash they could be bringing in with passive income from this stock.

Slate stock hasn’t been around as long as the others, but even so shares have remained stable over the last few years. Here you’re mainly buying for passive income, with a dividend yield at 9.25%. And that income is stable, with the average lease agreement remaining between 5 and 10 years.

The post 3 Dividend Stocks to Create Riches for Decades appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Brookfield Renewable Partners?

Before you consider Brookfield Renewable Partners, you'll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in May 2023... and Brookfield Renewable Partners wasn't on the list.

The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 23 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks * Returns as of 5/24/23

More reading

Fool contributor Amy Legate-Wolfe has positions in Brookfield Renewable Partners and Canadian Imperial Bank Of Commerce. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

2023