I was talking about stocks and investments with my uncle, a financial advisor, the other day, and he was telling me that if there’s one thing he’s glad he invested in years ago, it’s dividend stocks.
Having stocks that consistently pay up to its shareholders seems almost too good to be true. And it can be. It really depends on what stock you’ve chosen.
If you’re looking for long-term investments that will produce a consistent and stable dividend, there are options out there, and it’s not easy to make a decision sometimes. But I have two dividend all stars that should continue a stable amount of growth in both share price and dividend yield.
Northland Power (TSX:NPI) A perfect option for those looking to invest for decades, Northland Power offers a stock that provides exposure to the clean, renewable energy industry. As countries move toward renewable energy, Northland is in a position to gain handsomely from its international exposure through long-term contracts.
In the short term, the company has proven itself able to grow at a stable pace, reducing its debt over the last few years. Its recent first-quarter report proved this point, with sales increasing 3% to $499 million and gross profit 1% to $459 million.
Net income also increased 15% to $204 million, and adjusted EBITDA 1% to $294 million.
Another point for investors should be that management has filed to buy back up to 4.5% of its shares as new opportunities arise. This alone could be the reason that analysts have the stock rising from its current point at the time of writing at $24.80 per share to $30 per share in the next 12 months alone.
As for the dividend, the company currently offers 5.04% at the time of writing, or $1.20 per year. That means that an investment of $24,800 could give you $100 per month of stable income.
Fortis Inc. (TSX:FTS)(NYSE:FTS) Another energy producer, this company has most of its operations in the U.S., and rather than trying to growth on the outside the company as it has done through acquisitions over the last few years, the company is currently in the process of focusing on internal growth.
This has led management to believe that it can support a 6% rate base and dividend growth through to 2023, as it’s done for the last four decades.
While the company has a lot on the go, it still has room for growth. Currently, it’s working on its Lake Erie Connector Project, but renewable energy, transmission development, and grid modernization are all ways that the company could create more value for shareholders in the future.
While the stock is at all-time highs, that shouldn’t scare investors, but excite them. The stock really hasn’t dropped by much or for long since its initial public offering, and analysts believe the stock will continue to grow up to $57 per share in the next 12 months.
That means investors are putting their money into a strong stock, with a stable dividend that they can basically buy and ignore for decades.
With a dividend yield of 3.63%, or $1.80 annually given out each quarter, this stock is perfect for long-term investors looking for extra cash. An investment of $33,510 would give you $100 per quarter in dividend cash.
Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned.
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2019