2 Top Dividend Stocks to Buy in August 2023

 2 Best Dividend Stocks to Buy in August 2023

Canadians looking for passive income can consider investing in dividend growth stocks such as Brookfield Asset Management (TSX:BAM) and Exchange Income (TSX:EIF). These dividend stocks trade at attractive valuations and are well positioned to continue growing their payouts in 2023 and beyond. Let's see why. Brookfield Asset Management is one of the largest and fastest growing alternative asset managers worldwide. With USD 825 billion in assets under management (AUM), BAM operates in 30 countries on five continents.

 About $432 billion of its AUM is in the nature of fees, allowing it to pay investors an annual dividend of $1.70 per share, representing a forward yield of 3.8%.The company expects fee-related earnings to grow 15% to 20% annually, which should support dividend increases going forward. Armed with a debt-free balance sheet, BAM has a payout ratio of 90%.

Its massive scale gives Brookfield Asset Management a broad economic moat that allows it to increase capital flows across business cycles. It is well poised to benefit from secular spillovers across sectors such as renewables, infrastructure, real estate, private equity and credit.BAM has $175 billion in free capital that can be invested throughout the Brookfield ecosystem, expanding its base of cash-generating assets.

Investors also choose to invest their capital base in alternative assets, allowing them to diversify their portfolio and reduce overall risk. For example, alternative assets will attract $23 trillion in investment by 2026, up from just $4 trillion in 2010.In addition, Brookfield Asset Management expects alternative assets to make up 60% of portfolios for institutional investors, up from 30% in 2021 and just 5% in 2000.

Despite the sluggish macro environment, BAM raised $98 billion in capital in the 12 months to the first quarter (Q1) of 2023. It further expects to more than double fee-bearing capital to $973 billion by 2027. This should allow BAM to increase fee-based revenue to $4.37 billion in 2027, up from $2.16 billion in the first quarter of 2023 and $896 million in 2017.Given these factors, investors can expect BAM's dividends to grow by more than 100% over the next four years.

Exchange receipt of shares

A TSX stock with a forward yield of 4.9%, the stock has already returned 277% to shareholders over the past 10 years after adjusting for dividends. Despite its extraordinary earnings, EIF shares are valued at 14.5 times forward earnings, which is very cheap. By comparison, stock market returns are projected to grow 11.5% annually over the next five years.

Exchange Income operates in verticals such as aerospace and manufacturing. It invests in companies that are part of niche markets, allowing it to take advantage of predictable cash flows. Since its initial public offering, Exchange Income has invested approximately $1.5 billion in acquisitions to expand its portfolio of services and enter new markets.

This business model has allowed the company to maintain dividends for the past 18 years. Its dividend payouts increased from $68.5 million in 2018 to $97.5 million in 2022. Comparatively, its payout ratio decreased from 60% to 55% over that period.

Analysts remain bullish on EIF shares, expecting them to rise more than 30% over the next 12 months. Before you consider managing Brookfield Asset Management, you should listen.Our research team just revealed the top 5 stocks for investors to buy in July 2023, and Brookfield Asset Management was not on the list.

Motley Fool Stock Advisor Canada, an online investment service they've been running for nearly a decade, is beating the TSX by 29 percentage points. And right now, he thinks there are 5 stocks that are better to buy. Foolish contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Asset Management. The Motley Fool has a disclosure policy.

As financial markets continue to evolve, savvy investors are always looking for opportunities to secure steady income while ensuring growth potential. Known for their regular payouts and ability to provide solid returns, dividend stocks remain a cornerstone of many investment portfolios. In this article, we examine two of the best dividend stocks that stand out as compelling picks for August 2023, offering both income and growth potential.

Dividend Stocks Aug 2023 Income & Growth ABC CorporationA market leader in [relevant industry], ABC Corporation has consistently demonstrated its commitment to shareholders by delivering impressive dividend yields while maintaining a strong growth trajectory. Here's why ABC Corporation is the best choice for investors in August 2023:

 Impressive dividend history:

ABC has a track record of consistent dividend payments, making it an attractive option for investors looking for income. The company's dividend yield, which beat the industry average, is an excellent indicator of its commitment to rewarding shareholders. Strong financial performance:ABC's financials are robust, with steady revenue growth and healthy profit margins. This stability provides the company with a solid foundation to continue paying dividends while exploring opportunities for further expansion.

 Growth opportunities:

ABC is well-positioned to benefit from [current industry trends], which are expected to lead to growth in both sales and profits. This potential for expansion not only increases the overall value of the stock, but also supports the sustainability of the dividend payout.

 Dividend Stocks Aug 2023 Income & Growth XYZ Inc.XYZ Inc., a prominent player in [relevant sector], is another dividend stock that deserves investors' attention in August 2023. Here's why XYZ Inc. set up for success:

 Consistent dividend growth:

XYZ Inc. it has consistently increased its dividend payments over the years, demonstrating its commitment to providing shareholders with a reliable source of income. This history of dividend growth is a strong indicator of the company's financial stability and management's confidence in its future prospects.

 Strong market position:

XYZ Inc. has a significant market share in the [specific market] industry, making it a player in a sector poised for expansion. The company's strong brand and innovative products/services give it a competitive edge and ensure a solid foundation for continued growth.

 Focus on shareholder value:

XYZ Inc. prefers to deliver value to its shareholders through a combination of dividend payouts and potential capital appreciation. This dual approach aligns with the interests of investors seeking both income and growth, making XYZ Inc. an attractive addition to any dividend oriented portfolio.

Investors looking for dividend stocks with growth potential should consider adding ABC Corporation and XYZ Inc. to their portfolios. An impressive dividend history, strong financial performance and growth potential make them compelling picks for August 2023 and beyond. By harnessing the power of dividend stocks, investors can secure steady income while participating in the market's upside potential.