Passive income can seem like a strategy only retirees need to consider. But that’s just not true. No matter where you are in your investment plan, choosing dividend stocks is an incredibly simple way to increase your bottom line, whether you’re taking that cash or reinvesting it in your portfolio.
The important thing is that you choose stocks that have a long history of stable growth, a long history of dividend increases, and a promising future outlook. That might seem like a lot of boxes to check, but there are several excellent stocks out there right now that perfectly serve this purpose and that are considered a bargain in this market.
CIBC
Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) might seem like the dark horse among the Big Six Banks, but in fact this is an excellent opportunity for investors to take advantage of the company’s downturn. It’s true, when a recession hits, CIBC could be hit harder than the other six, but it’s still a Canadian bank. Canadian banks faired as some of the best in the world during the last recession, and this next one isn’t going to be anywhere near as bad as the last.
With that in mind, while CIBC might take a bit more time to rebound than the others, it won’t take long. In fact, its latest report even had investors reconsidering after some reasonable earnings. That means it’s still a great idea to buy up this stock with an incredible dividend yield of 5.52% as of writing. That dividend has increased by 8.75% on average per year during the last five years.
When the storm has passed, you’ll certainly be glad you bought this strong, stable stock on the cheap, as you watch your share price and dividends continue up and up for decades.
Pembina Pipeline
Another company plagued by its industry is Pembina Pipeline Corp. (TSX:PPL)(NYSE:PBA), and unnecessarily so. The company’s share price has hovered around the $50 mark since practically the beginning of the year, but Pembina is doing plenty that should interest investors. Most recently, it purchased Kinder Morgan Canada for $4.35 billion. The news sent shares surging for both Pembina and Kinder Morgan, and it’s clear why. Pembina just became a major player beyond the pipeline business, evolving into a storage haven with 10 million barrels of capacity for crude. It also takes over Kinder Morgan’s Cochin Pipeline system, and all this on top of its current secured growth projects.
Clearly, Pembina isn’t concerned about an oil and gas slump. That’s because it knows pipelines are needed, and even while it’s building it’s acquiring assets to make itself available to the oil and gas industry. Needless to say, this company’s future is stable, and therefore so is its 5.02% dividend. That dividend has increased by 8% on average per year in the last five years, with the company predicting the same going forward for the next few years.
While the company is around fair value, analysts predict the stock will go higher in the next year, with a potential upside of 27% at the moment. So if you’re in for the long game, it doesn’t get much better than Pembina.
