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3 Great Dividend Stocks to Buy in September

By Keith Speights - Aug 30, 2020 at 6:08AM

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Solid yields, business models, and growth prospects make all three of these stocks attractive picks.

Any time is a great time to buy strong dividend stocks. They literally pay you to own them. Over the long run, you can amass tremendous returns by investing in the right dividend stocks.

What should you look for? An attractive dividend yield is a must. A business model that enables the company to keep the dividends flowing (and hopefully growing) is high on the list. It's also helpful if the company has solid growth prospects. Here are three great dividend stocks to buy in September that check off all of these boxes. 

Dividends written above a piggy bank

Image source: Getty Images.

1. Brookfield Renewable

I suspect that nearly any investor would be happy with Brookfield Renewable's (BEP -0.40%) (BEPC -0.55%) dividend yield. Actually, it's more precise to use the plural version of the word -- yields. Brookfield Renewable is one business but has two stocks.

Brookfield Renewable Partners is a limited partnership with a dividend yield of 4.1%. Brookfield Renewable Corporation was established earlier this year to provide investors an alternative that wasn't a limited partnership. It pays the same dividend as its LP sibling but its yield is 3.2% due to a difference in share prices.

As its name indicates, Brookfield Renewable focuses on renewable energy. The company owns hydroelectric, solar, and wind power generation facilities plus energy storage facilities. It's diversified geographically, with operations in North America, South America, Europe, and Asia.

Renewable energy is definitely here to stay, making Brookfield Renewable's business model about as stable as they come. The company also has strong growth prospects with a development pipeline that will provide nearly as much energy capacity as it currently claims.

2. Innovative Industrial Properties

Innovative Industrial Properties (IIPR 2.15%) ranks as a dividend lover's dream. It offers a dividend yield of 3.4%. IIP has increased its dividend payout by more than 600% over the last three years. It shares also soared by roughly the same amount during the period.

You might think that the cannabis industry would be the last place to find a reliable dividend stock. But IIP's business model works really well. The company buys properties from medical cannabis operators then leases those properties back to its customers. This gives IIP a steady revenue stream over an extended time frame: The company's weighted-average remaining lease term is around 16 years.

IIP is organized as a real estate investment trust (REIT). That means the company must distribute at least 90% of taxable income to shareholders in the form of dividends. Its earnings have grown at a fast pace in recent years, driving its dividend higher and higher.

This growth seems likely to continue. The U.S. cannabis industry is still only in its early stages. All IIP has to do to keep up its winning ways is to keep finding medical cannabis operators who'd like more cash to fund expansion. That shouldn't be too difficult of a challenge for the company.

3. Pfizer

Pfizer (PFE 3.77%) has been a longtime favorite for dividend-seeking investors. Its dividend yield currently stands at close to 4%. The drugmaker has also consistently increased its dividend over the past decade.

Sure, the pharmaceutical industry can be volatile. However, Pfizer has successfully navigated medical advances and regulatory changes since 1849. The company continues to invest heavily in research and development and in business development deals to make sure it remains among the leaders in the industry.

The big pharma stock hasn't delivered impressive growth in recent years. That's because several of Pfizer's top-selling drugs have lost patent exclusivity and experienced significant sales declines. But the company will soon spin off its Upjohn unit (which is home to those older drugs) and merge it with Mylan. This will set the stage for Pfizer's growth to increase significantly.

Don't worry, though: Pfizer's dividend will still be solid. And investors will receive shares in the new entity, Viatris, to be formed with the merger of Upjohn and Mylan, which will also pay a dividend. The combined dividend of the "new" Pfizer and Viatris should be close to Pfizer's current dividend.

Keith Speights owns shares of Brookfield Renewable Inc., Brookfield Renewable Partners L.P., Innovative Industrial Properties, and Pfizer. The Motley Fool owns shares of and recommends Innovative Industrial Properties. The Motley Fool recommends Mylan. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$50.11 (3.77%) $1.82
Brookfield Renewable Partners L.P. Stock Quote
Brookfield Renewable Partners L.P.
BEP
$39.66 (-0.40%) $0.16
Innovative Industrial Properties Stock Quote
Innovative Industrial Properties
IIPR
$98.44 (2.15%) $2.07
Brookfield Renewable Corporation Inc. Stock Quote
Brookfield Renewable Corporation Inc.
BEPC
$41.77 (-0.55%) $0.23
Viatris Inc. Stock Quote
Viatris Inc.
MYL

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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