Does your portfolio have a selection of dividend-paying stocks that can provide a lifetime income stream?
While there is no shortage of great stocks on the market, some of those stocks are clearly better than others. Here’s a look at a duo of lifetime income stocks that should be on the radar of investors everywhere.
Option 1: The couch
It would be almost impossible to talk about lifetime income generating investments without mentioning at least one of the big bank stocks.
And that big bank share we need to consider now is Bank of Nova Scotia (TSX:BNS). Scotiabank is the most international of the major banks, with an international presence in more than a dozen countries around the world.
That international segment serves as the main growth engine for Scotiabank. In recent years, the bank has shifted its focus to mature markets in North America rather than emerging markets in Latin America.
While the international segment focuses on growth, Scotiabank’s strong domestic segment provides a source of stable, recurring revenue to fund the bank’s growth and quarterly dividend.
That dividend can be one of the most important sources of lifetime income. At the time of writing, Scotiabank’s quarterly dividend has a robust yield of 4.81%, making it a solid option for any portfolio.
Option 2: The Defensive Titan
Just as lifetime income conjures up images of the big banks, it also highlights another excellent choice for investors: utility stocks.
Fortis (TSX:FTS) is one of the largest utilities in North America. The company operates in ten operating regions, including ten US states, five provinces in Canada and three Caribbean countries.
Most importantly, these operating regions provide a stable and recurring source of revenue, supported by long-term, regulated contracts. These contracts often span decades and enable Fortis to invest in growth initiatives and pay out a nice dividend.
The intriguing thing about Fortis is that its stock is different from other traditional utilities. More specifically, it differs from the stereotype of other utilities as boring investments with little growth.
Fortis is taking an aggressive stance towards expansion. The company has expanded impressively over the years, becoming the utility giant it is today.
That growth has also enabled the company to expand into new markets in a complementary manner, serving generation, transmission and distribution elements within its energy network.
In terms of dividend, Fortis offers investors a quarterly dividend. At the time of writing, that dividend works out to an impressive yield of 3.45%. In fact, the company has achieved impressive annual growth for 52 years.
That most recent increase was a 4.1% increase announced this week.
That fact alone makes this the lifetime income stock for your portfolio.
What are your lifetime income shares?
No stock is without risk, but Fortis and Bank of Nova Scotia both offer investors ample defensive appeal and growth potential to balance that lifetime income potential.
In my opinion, one or both should be core investments in any well-diversified portfolio.
Buy them, hold them and watch your future lifetime income grow over time.
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