Best Dividend Income Stocks for July 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.

The outcome you want is a safe business with a 4% dividend yield, a history of consistent dividend payments and dividend growth to keep up with inflation.

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.

The 3 filters I use from the best Canadian stock screener are:

  • Dividend Yield over 4% – Good income and not at risk
  • Chowder Score over 10% – Dividend growth beating inflation
  • Minimum of 5 Annual Consecutive Dividend Increases – Consistency by management

#1 – Manulife

CPX Small 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.

Key Investment Data

 

#2 – Algonquin Power & Utilities Corp

Algonquin 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.

Key Investment Data

 

#3 – Scotia Bank

BNS - Small Scotiabank 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.

Key Investment Data

 

#4 – TC Energy

TC 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.

Key Investment Data

 

#5 – Enbridge

ENB - Enbridge Enbridge Inc. is the largest energy infrastructure company in North America. It is Canada’s largest natural gas distributor engaging in the collection, transportation, processing and storage of oil and gas. Enbridge caters to 3.7 million customers in Ontario, Quebec, New Brunswick, and New York.

It owns an extensive network of about 192,000 miles of natural gas and NGL pipelines across North America and the Gulf of Mexico.

Its crude oil and liquids transportation systems are huge comprising of more than 17,000 miles of active pipelines.

The company is known for its high quality liquids and natural gas infrastructure assets. In addition, Enbridge has 3.1 Bcf/d of processing capacity and 438 Bcf of net natural gas storage capacity. It also owns interests in nearly 3,000 MW of renewable generation capacity.

Enbridge operates through five reporting segments - Liquids Pipelines (52% of 2018 earnings), Gas transmission and midstream (22%), Gas Distribution (17%), Green Power and Transmission (4%), and Energy Services (5%).

Key Investment Data

 

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In fact, I have tried all of the investment services for dividend investors like a crash test dummy of investment services. Just ask me, and you'll learn why there was nothing I could use out there and build the Dividend Snapshot Screeners.

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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.