Double Your Money With Dividend Stocks

Earn some big dividend paycheques from Altagas Ltd. (TSX:ALA) and another company now to double your money in seven years!

| More on:

Invest in stable companies that offer generous and safe dividends, and you’ll be set for life. If you earn a portfolio yield of 6%, you can double your money in 12 years without accounting for potential price appreciation.

This means that the sooner you start investing, the more cash you can earn via dividends.

Here are a couple of stable companies that yield more than 6% today: Altagas Ltd. (TSX:ALA) and Brookfield Renewable Partners LP (TSX:BEP.UN)(NYSE:BEP).

Altagas

Altagas builds, owns, and operates a diversified portfolio of energy infrastructure. It generates roughly an equal amount of earnings before interest, taxes, depreciation, and amortization (EBITDA) from Canada and the United States.

This year, management estimates that only 4% of its EBITDA will have commodity exposure. This means the company’s earnings are pretty predictable.

Furthermore, the company has power, gas distribution, and midstream assets that are largely contracted or regulated. This means it has the ability to generate stable cash flows to support a safe dividend.

Indeed, its funds from operations (FFO) are more than enough to cover its annual payout of $2.10 per share. Its 2017 FFO payout ratio is estimated to be about 61%.

Across all its business segments, Altagas has $2.6-2.9 billion of investments that are either under construction or in development. In the long run, the company aims to maintain a well-balanced, diversified portfolio and earn about a third of its normalized EBITDA from each of its business segments.

Recently, Altagas shares have been under pressure as the company is working on acquiring WGL Holdings Inc. (NYSE:WGL), a high-quality utility with regulated gas utilities that fit with Altagas’s strategy. If Altagas acquires WGL successfully, management aims to hike its dividend by at least 8% per year through 2021.

CADollars cash money

Brookfield Renewable

Brookfield Renewable is one of the biggest global pure-play renewable businesses that retail investors can get access to.

It has $25 billion of power assets across 260 power-generating facilities in 15 markets in seven countries.

Its portfolio, which consists of 88% hydroelectric generation and 11% wind generation, has an installed capacity of 10,700 MW. It generates 65% of its cash flows from North America, 15% from Brazil, 15% from Colombia, and 5% from Europe.

Since Brookfield Renewable generates 91% of contracted cash flows with inflation-linked escalations, its cash flows are quite stable.

In fact, the company has a track record of hiking its distribution and aims to continue increasing it by at least 5% per year.

The company has about 150 MW of hydro and wind projects that are largely expected to come online this year, at which time they’ll start generating cash flows.

Investor takeaway

At less than $31 per share, Altagas yields 6.8%. At about $38.50 per share, Brookfield Renewable yields 6.5%.

In other words, today’s buyers can double their money with dividends alone in about 11 years. Throwing in the dividend growth, it’s more likely that buyers today can double their money in about seven years.

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 Kay Ng owns shares of ALTAGAS LTD. and Brookfield Renewable Energy Partners. Altagas is a recommendation of Stock Advisor Canada.

More on Dividend Stocks

ways to boost income
Dividend Stocks

TFSA Investors: 3 Dividend Stocks to Buy and Hold Forever

These dividend stocks are likely to consistently increase their dividends, making them attractive investment for your TFSA portfolio.

Read more »

how to save money
Dividend Stocks

Passive-Income Seekers: Invest $10,000 for $59.75 Monthly Income

Passive-income seekers can transform their money into monthly cash flow streams through dividend investing.

Read more »

happy woman throws cash
Dividend Stocks

2 Canadian Dividend Stars Set for Strong Returns

You can add these two fundamentally strong Canadian dividend stocks to your portfolio now and expect steady income and strong…

Read more »

Man in fedora smiles into camera
Dividend Stocks

Is it Better to Collect the CPP at 60, 65, or 70?

Canadian retirees can consider supporting their CPP benefit by investing in blue-chip dividend stocks with high yields.

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

2 TFSA Stocks to Buy Right Now With $3,000

These two TFSA stocks are perfect for those wanting diversification, long-term growth, and dividends to boot!

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA: The Perfect Canadian Stocks to Buy and Hold Forever

Utility stocks like Canadian Utilities (TSX:CU) are often very good long-term holds.

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

How to Use Your TFSA to Create $5,000 in Tax-Free Passive Income

Creating passive income doesn't have to be risky, and there's one ETF that could create substantial income over time.

Read more »

A worker uses a double monitor computer screen in an office.
Dividend Stocks

Here Are My Top 4 Undervalued Stocks to Buy Right Now

Are you looking for a steal from your stocks? These four have to be the best options from undervalued options.

Read more »