Best Dividend Income Stocks – March 2021

There comes a point during our quest towards retirement, or financial freedom, that we must focus on an income stream to pay for the bills. That’s where dividend income stocks come into play.

It’s a different strategy than growing a portfolio during the accumulation years where you can take on some more risks. As such, finding the appropriate stock that gives you the best income with the best dividend stability is no small task.

The stable industries are the telecom stocks, the utility stocks, the bank stocks and the insurance stocks.

Best Dividend Income Stocks

The Dividend Snapshot Screener is setup to quickly narrow down on a short list. Filter by the income fit, the yield, the Chowder score and any other metrics you want.

Each of the holdings below will pay you more than 4% and grow their dividends at a faster rate than the inflation so you can keep up with inflation.

As a note, REITs are excluded from the filter. I am not a fan and there are safer options to generate income and have dividend growth keeping up with inflation.

#1 – TC Energy

TRP - TransCanada PipelineTC Energy is a leading North American infrastructure company. It supplies more than 25% of natural gas consumed daily across North America.

The company has a strong portfolio of diversified assets, storage facilities and power generation plants and operates one of North America’s largest natural gas pipelines networks extending to more than 57,500 miles.

TC Energy operates three complementary energy infrastructure businesses across three major geographies in North America. By generation type, TC’s assets can be divided into nuclear, natural gas and wind.

The USA, Canada and Mexico are its core geographies and the company has access to North America’s two most prolific natural gas supply basins.

With more than 65 years of service, TC Energy is known for delivering energy in a safe and sustainable manner. Ownership of low-risk regulated cost-of-service businesses and long-term contracted energy infrastructure assets differentiate TC Energy from its peers.

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#2 – Emera

EMA - EmeraEmera Inc. is a leading North American diversified energy and services company with assets worth $30 billion. The company engages in the generation, transmission, and distribution of electricity and gas, and provides other utility energy services.

Emera Inc. has operations in Canada, the USA and in four Caribbean countries. The company serves a diverse base of residential, commercial as well as industrial customers.

It operates a balanced and diversified portfolio consisting of ~90% regulated assets in electric utilities, gas LDCs; and unregulated gas-fired generation across North America. Emera reports its results in six operating segments: Emera Florida and New Mexico, Nova Scotia Power Inc., Emera Maine, Emera Caribbean, Emera Energy, and corporate & other.

The company invests in electricity generation, transmission and distribution, gas transmission and distribution, and utility energy services. It also has investments in renewable energy assets.

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#3 – Capital Power Corporation

Capital Power is a leading power producer in North America, engaging in the development, acquisition, and operation of power generation facilities.

The company owns approximately 5,100 MW of power generation capacity at 25 facilities.

Capital Power owns natural gas (55% of its portfolio), coal (27%) and renewable energy (18%) assets which are either merchant/ commercial/ contracted facilities or in construction.

Its fleet of assets has an average age of 15 years with significant long lives.

The company also has a strong renewable pipeline including 1,200 MW of wind development in the U.S. Capital Power is focusing on Alberta for merchant power generation and pursuing contracted generation capacity throughout North America with nearly 900 MW of owned generation capacity being in advanced development in Alberta and Illinois.

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#4 – Algonquin Power & Utilities Corp

AQN - Algoquin Power & Utilities CorpAlgonquin Power & Utilities is a diversified utility company in North America with $10 billion in total assets. The company engages in the generation, transmission, and distribution of water, gas, and electricity to communities across the U.S. It also has renewable energy business.

As a growing renewable energy company, Algonquin Power owns a strong portfolio of long term contracted wind, solar and hydroelectric assets with 1.5 GW of total installed capacity.

The company through its subsidiaries owns an equity interest in more than 39 clean energy facilities. Algonquin Power operates through two subsidiaries: Liberty Utilities (64% of 2018 earnings) and Liberty Power (36%).

The company has more than 50 power generation facilities and 20 utilities across North America. Algonquin’s utility business serves nearly 770,000 customers in twelve states across the U.S., through 1,200 miles of electrical transmission lines and 100 miles of natural gas transmission pipelines.

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#5 – Pembina Pipeline

PPL - Pembina PipelinePembina Pipeline is a leading midstream and transportation service provider in North America. The company is known for providing safe and cost-effective transportation solutions since the last six decades.

The company offers a wide range of midstream and marketing services to the energy sector. It owns an extensive network of pipelines that transport crude oil, natural gas and natural gas liquids produced primarily in western Canada.

It also runs gathering and processing facilities and an oil and natural gas liquids infrastructure business.

Pembina owns a large asset base consisting of pipelines and facilities, which is difficult for newcomers to replicate. As a leading energy infrastructure company, Pembina serves multiple basins and markets throughout Canada and the US.

The company has 19 gas processing facilities and 6 billion cubic feet per day of net gas processing capacity. Pembina owns and operates an 18,000 km pipelines with a total capacity of 3 million barrels of oil equivalent per day.

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#6 – BCE

TSE:BCEBell Canada Enterprises is Canada’s largest telecommunications company. It provides an extensive range of products and solutions for its customers’ communication needs.

The company owns Canada’s largest network of data centers, retail outlets, as well as Bell LTE, Canada’s national network.

BCE is a leading residential communications provider offering fiber-based Fibe TV and Fibe Internet, Connected Home services and home phones in seven provinces. It also provides national wireless services, and a wide range of business communications services including data hosting and cloud computing across the country.

Bell Canada caters to a diversified customer base which includes retail consumers, businesses and government customers. Moreover, its multimedia company, Bell Media is Canada's premier media company hosting the No.1 sports channel TSN.

The company operates through Bell Wireline (52% of Q4’18 revenues), Bell Wireless (35%) and Bell Media (13%) segments. By revenues, wireline is its largest segment, with revenues comprising of data, voice and other services (90% of wireline revenues) and products (10%).

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#7 – Sun Life Financial

Sun Life Financial is a leading financial services company specializing in insurance, wealth and asset management solutions, and customized health programs.

It is a leader in insurance and wealth solutions in its core Canadian market and holds an industry leading market share in US Group Benefits.

The company caters to the financial needs of millions of customers, small businesses, and public and private sector companies worldwide. Canada is Sun Life’s largest market accounting for more than 30% of its income.

The company also has operations in 26 other countries, like the USA (16% of income), Asia (17%) and the UK (5%). Sun Life operates through a large network of advisors, 3rd-party partners and other distributors.

The company operates balanced and diversified businesses like asset management and individual insurance, which are its largest businesses constituting 29% and 28% respectively of 2018 net income, followed by group insurance (20%), wealth (12%) and run-off (12%).

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#8 – Canadian Natural Resources

CNQ - Canadian Natural ResourcesCanadian Natural Resources is a large natural gas and crude oil exploration and production company in Canada.

The company operates a diversified portfolio of assets (comprising of mix of natural gas, light crude oil, heavy crude oil, bitumen and synthetic crude oil) in North America, the UK North Sea and Offshore Africa. Canadian Natural’s business can be broadly classified into - North America E&P, international, marketing & midstream.

The company holds some of the best oil sands assets in North America, particularly thermal in situ properties, having significant growth potential. Canadian Natural completed its transition to a long life, low decline asset base in 2017, which ensures a growing base of sustainable cash flows especially in low commodity price environments.

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#9 – CIBC

CIBC or Canadian Imperial Bank of Commerce is a leading North American financial institution, formed as a result of the merger between the Canadian Bank of Commerce and the Imperial Bank of Canada in 1961.

The bank operates through its four strategic business units Canadian Personal and Small Business Banking (48% of latest net income), Canadian Commercial Banking and Wealth Management (24%), U.S. Commercial Banking and Wealth Management (13%), and Capital Markets (15%).

The bank caters to 11 million individual, small business, commercial, corporate and institutional clients in Canada, the U.S. and around the world. CIBC has a strong client focused culture and operational efficiencies which drive shareholder value and aid growth across different platforms.

CIBC’s investment in technology and digital platforms should also meet the evolving needs of its clients. The bank caters to 11 million individual, small business, commercial, corporate and institutional clients in Canada, the U.S. and around the world.

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#10 – Scotia Bank

BNS - SmallScotiabank is a leading international bank in Canada and a leading financial services provider in the Americas. The bank has a presence in personal and commercial, corporate and investment banking, wealth management and capital markets, and serves 25 million customers worldwide.

With a rich history of 185 years, the bank has developed an extensive network of over 960 branches and more than 3,600 automated banking machines in Canada, and 1,800 international branches.

Scotiabank has a wide geographic presence in attractive markets in Latin America (71% of revenues), Caribbean & Central America (25%) and Asia (4%). It operates through Canadian banking (49% of earnings), international banking (36%) and global banking and markets (15%) business lines.

Scotiabank is highly diversified by products, customers and geographies, which reduces risk and volatility. The bank generates nearly 80% of its earnings from high quality and stable businesses which gives stability to cash flows.

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DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.

DISCLAIMER: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your investment decisions at your own risk – see my full disclaimer for more details.