Tag Archives: NYSE:FTS

Do Utilities Make Good Buy-and-Hold Dividend Stocks?

Utilities are a key component of solid dividend portfolios. Here are 3 utilities that provide current yields of about 3.5-4.4%. They’re fairly valued. Going through these examples will lead to an answer for the question in the title.

electric distribution

Brookfield Infrastructure

Brookfield Infrastructure Partners L.P. (TSX:BIP.UN)(NYSE:BIP) split-adjusted funds from operations per unit (“FFOPU”) increased by 2% in 2020 during the pandemic, proving itself to be a defensive business in the face of adversity.

In the first half of the year (“H1”), BIP rebounded to growth with its split-adjusted FFOPU rising almost 19% to US$1.77. Contributing factors include an economic rebound, management taking advantage of market volatility during the 2020 pandemic market crash (such as by scooping up shares of Inter Pipeline (TSX:IPL) at basement prices), capital recycling, etc. Its H1 2021 payout ratio was 58% of FFO, which is a healthy payout ratio.

BIP remains one of our favourite utilities for income. We trust that management can live up to its word by increasing its cash distribution by 5-9% per year going forward. 

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1 Must-Have Dividend Stock for Your Income Portfolio

The heat wave that hit certain parts of North America like British Columbia, Seattle, Portland, and New York highlights how essential utilities are. 

Apparently, when utility infrastructures are built, extreme weather is not accounted for, which is why cities like New York warned citizens to conserve power. They asked citizens to avoid using major appliances and limit electricity usage to reduce the risk of a wide-area power outage. 

Hundreds of lives have been lost because of this heat wave. The demographics that are most at risk include seniors, children, and pregnant women. 

In any case, if you’re affected by the heat wave, make sure to stay hydrated and cool. Consider going to the mall to enjoy air conditioning in the hottest hours and stay under the shade when you’re outside.

Utilities are essential no matter if the economy is doing well or badly. People need to use electricity, gas, and water no matter what. So, utilities are one must-have dividend stock in your income portfolio. Specifically, you want utilities that are large enough to make stable earnings year in year out and pay sustainable dividends. 

electric distribution

Here are some of the dividend-paying utility stocks that I own in my income portfolio: Algonquin Power & Utilities Corp. (TSX:AQN)(NYSE:AQN), Fortis (TSX:FTS)(NYSE:FTS), and Brookfield Infrastructure Partners L.P. (TSX:BIP.UN)(NYSE:BIP).

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3 Tips on Creating a Durable Dividend Stock Portfolio with Less Work

Making money from the stock market requires buying and selling stocks. The idea is to profit from capital gains when you sell stocks for higher prices than you paid them for.

When you build a dividend stock portfolio, you can potentially reduce tremendous amounts of work by focusing only on the buying. If you want to create a durable dividend stock portfolio with less work, here are three tips for you!

Dividend stock selection

You want to select dividend stocks with durably growing dividends for your buy-and-hold dividend portfolio. Here are some examples.

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