3 dividend stocks that can provide attractive passive income

Dividends are one of the most stable and advantageous forms of passive income that investors can use to diversify their portfolio. Investing in equities with regular dividends can help replace the low yields of traditional instruments such as bonds, while providing protection against inflation. For long-term investors, the key is to focus on companies that not only pay regular dividends, but also increase them during more challenging periods.

In the following, we present three stocks that feature stable and growing dividends, and may be an interesting opportunity for investors seeking passive income, according to many analysts.

Canadian Imperial Bank $CM

Canadian Imperial Bank is one of the largest banking institutions in Canada, focusing on a wide range of financial services including personal and corporate banking, investment advisory and asset management.

The bank's current dividend yield is 4.2%, which is above the sector average for foreign banks (3.77%) and well above the yield of the broader market, represented by the S&P 500 index (1.5%). An important advantage is the consistency in dividend payments even during difficult economic times. Over the past year, the bank has increased its dividend by 3.53%, indicating its solid financial health and commitment to shareholders.

Morgan Stanley $MS

Morgan Stanley, one of the world's best-known players in investment banking and wealth management, also offers interesting dividend potential. The company currently pays a dividend of $0.93 per share, which equates to a dividend yield of just under three percent.

This yield is well above the investment banking sector average (0.3%) and demonstrates the firm's ability to generate superior shareholder value. Over the past year, Morgan Stanley has increased its dividend by 8.82%, evidence of its long-term growth trend and stable profitability.

NiSource $NI

NiSource is a U.S. utility company that provides natural gas and electric distribution services. Its business is characterized by stability and lower sensitivity to economic fluctuations, making it a popular choice for more conservative investors.

With a current dividend yield of 2.89% and year-over-year dividend growth of 6%, NiSource represents an attractive opportunity for those seeking a combination of stable payouts and growth. A growing dividend also helps protect the value of passive income from the effects of inflation.

Looking at the company's dividend growth, its current annualized dividend of $1.06 is 6% higher than last year. NiSource has increased its dividend 5 times year-over-year over the past 5 years with an average annual increase of 6.06%. NiSource's current payout ratio is 60%.

NI expects earnings to continue to grow this fiscal year. The Zacks Consensus Estimate for 2024 is $1.72 per share, with earnings expected to grow 7.50% from the same period last year.

Disclaimer: There is a lot of inspiration to be found on Bulios, but stock selection and portfolio construction is up to you, so always conduct a thorough analysis of your own.

Source: CNBC, Yahoo Finance.