3 Dividend Stocks to Buy Hand Over Fist in July

3 Dividend Stocks to Buy Hand Over Fist in July

If you are a dividend investor, you will want to take a closer look at Agree Realty (NYSE: ADC), Franklin Resources (NYSE: BEN), and Toronto-Dominion Bank (NYSE: TD) in July. The stories behind these financial stocks are slightly different, but the passive income opportunities are all attractive. Here's a quick look at each so you'll know which one you might want to add to your portfolio.

Agree Realty is priced for growth

Agree Realty's dividend yield is 4.8%. That's actually a pretty high yield relative to the average real estate investment trust (REIT) and the broader stock market. But it is not the highest yield within the net-lease peer group in which Agree competes. (Net leases require tenants to pay for most property-level operating expenses.)

But there's a reason investors are giving Agree a premium relative to its peers: dividend growth. During the past decade, Agree's dividend has increased at a roughly 6% annual rate, which is about twice the rate of its most prominent competitors. To be fair, Agree is not an exciting company; it just buys single-tenant retail properties and leases them out. But it has proven adept at expanding, and there's no reason to believe that's going to change in the near future. If you are looking for a mix of dividend yield and dividend growth, Agree should be on your short list.

Franklin Resources is rolling up the asset management sector

Franklin Resources operates like an umbrella company, with a host of different asset management subsidiaries living underneath the corporate parent. Asset management companies charge fees for their services and tend to serve a customer base that's pretty loyal (people don't like to move money between asset managers very often). It has the scale needed to be an industry consolidator, so growth will likely come from acquisitions. That's a hard narrative to sell to investors at the moment because the big issue for asset managers is the growth of lower-cost alternatives like exchange-traded funds (ETFs).

Basically, Franklin Resources is slowly leaking assets to things like ETFs on one side and expanding via acquisitions on the other. Nevertheless, the dividend that has been increased for an astounding 44 consecutive years. If you are looking for a reliable income stream, that should be very attractive to you. The problem is that you need to accept that Franklin Resources is just milking a cash cow business. Growth probably won't be exciting, but with a dividend yield of 5.6%, it really doesn't need to be.

Toronto-Dominion Bank is getting slapped on the wrist

Toronto-Dominion Bank is a special situation stock right now, which is kind of unusual given the bank's long and successful history. Remarkably, it has paid uninterrupted dividends since it started paying a dividend in 1857. The bank's yield today is a historically high 5.4%.

So what's going on? Employees of TD Bank's U.S. business appear to have helped launder money for drug dealers. That's not good, and the bank rightfully got in trouble for the weakness of its money-laundering controls. It is working with regulators to improve its controls and it will suffer some hefty fines. But the bank is financially strong and should muddle through this in stride. That said, growth in the U.S. market is likely to stall until this issue has been resolved and the bank has mended its bruised relationship with regulators. That's not good news, but the yield of the average bank is just 2.8%, so you are getting paid pretty well to ride out the uncertainty here. For more aggressive investors, the risk-reward trade-off here is probably worth it.

There are interesting dividend stocks to buy in July

Agree, Franklin Resources, and TD Bank each has a different story to tell investors, but they are all interesting options if you like dividends. Agree will be a good choice for growth and income investors, Franklin Resources will be appreciated by those in search of reliable dividends, and TD Bank is a special situation stock for the more aggressive investors out there. If you take the time to dig into these stocks, one (or more) may find its way into your portfolio in July.

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Reuben Gregg Brewer has positions in Toronto-Dominion Bank. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.