Fool Canada’s first 1,000%+ winner?

Our Chief Investment Advisor, Iain Butler, and a team of The Motley Fool’s most talented investors from across the globe recently embarked on an unprecedented mission:

To identify the 20 Canadian small-cap companies they believe have the best shot at earning investors like you gains of 1,000%+ over the coming years.

For the next few days only, you can get the names and full details on these 20 potential “10-baggers” when you join Iain and his team in a first-of-its-kind project they have dubbed Discovery Canada 2017.

TFSAs Are the Perfect Place for Dividends and Growth

There are two ways for investors to get a return from their investments: dividends and price appreciation. Some investors focus on price appreciation because that’s where most of the returns are from.

However, dividends should not be ignored, as they contribute to about a third of long-term returns! Besides, if you know where to look, dividends can be much more reliable than finicky stock prices.

By focusing on dividend stocks that increase their payouts year after year, investors can get both income and growth.

Investors should take advantage of Tax-Free Savings Accounts, or TFSAs; what’s earned inside is absolutely tax free. With the start of 2017, investors once again have $5,500 of contribution room.

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Here are two quality dividend-growth ideas for your consideration.

Plaza Retail REIT (TSX:PLZ.UN) is a rarity among the real estate investment trust (REIT) world.

Not only does it have a long track record of hiking its distribution, but it also has higher growth potential.

Plaza Retail REIT has 297 retail properties, which total 7.6 million square feet across eight provinces with a focus in Atlantic Canada, Quebec, and Ontario. It has 25 projects under development or redevelopment that will add about 1.6 million net square feet to its portfolio.

The company’s recent committed occupancy was nearly 96%. In addition, its funds-from-operations payout ratio is sustainable below 80%.

Plaza Retail REIT’s strong execution has allowed the company to increase its distribution every year since 2003. Only one of two publicly traded Canadian REITs has achieved that.

Currently, the REIT yields 5.2%. According to its usual schedule, it should hike its distribution by the end of the month.

Algonquin Power & Utilities Corp. (TSX:AQN)(NYSE:AQN) is another steady dividend grower. Late last year, it was listed on the New York Stock Exchange, which is another channel for it to raise capital if needed.

Algonquin aims to be a top quartile North American utility, and the completion of the acquisition of Empire District Electric on January 1 was a huge milestone. After all, Empire makes up 35% of Algonquin’s five-year growth plan.

With the addition of Empire, Algonquin’s total assets hit the $10 billion mark. Empire increases Algonquin’s distribution customers by about 38% and almost doubles its power-generation installed capacity.

Algonquin now serves 782,000 water, electricity, and natural gas customers in the U.S. and has an installed capacity of 2,500 MW powered by wind, solar, hydroelectric, and thermal energy. It also has some rate-regulated electric transmission and natural gas pipeline assets.

Algonquin has had six years of steady dividend growth, and management targets to grow its dividend by 10% per year.

Currently, Algonquin offers a stable 5% yield, which is subject to currency rate fluctuations because the utility pays a U.S. dollar–denominated dividend.


By buying stable, high-yield dividend-growth stocks such as Algonquin and Plaza Retail REIT in TFSAs, investors can become wealthy over time while earning a growing income that can be reinvested or used to pay the bills without the hindrance of taxes.

Stocks for investors looking to earn more and risk less...

According to a study from RBC Capital Markets, if you had invested $10,000 into one often overlooked class of stock in 1986...

27 years later you would have had $86,346 more than if you had invested in the S&P/TSX index instead -- and you would have experienced even less volatility along the way.

Which is why we asked one of our top analysts -- and experts in this field -- to put together a special report highlighting three of his favorite "earn more, risk less" stocks to buy right now.

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Fool contributor Kay Ng owns shares of ALGONQUIN POWER AND UTILITIES CORP. and PLAZA RETAIL REIT.

NEW! This Stock Could Be Like Buying Amazon In 1997

For only the 5th time in over 14 years, Motley Fool co-founder David Gardner just issued a Buy Recommendation on this recent Canadian IPO.

Stock Advisor Canada’s Chief Investment Adviser, Iain Butler, also recommended this company back in March – and it’s already up a whopping 57%!

Enter your email address below to find out how you can claim your copy of this brand new report, “Breakthrough IPO Receives Rare Endorsement.”

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