Please ensure Javascript is enabled for purposes of website accessibility

3 Great Dividend Stocks to Buy in September

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

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

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

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.