4 Dividend Stocks I’d Buy If I Had $10,000

How would you invest $10,000?

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The Motley Fool

If you came across a $10,000 windfall, what would you do with it?

For many people living paycheque-to-paycheque, $10,000 would just be enough to put out some financial fires. For others, such a windfall would be quickly squandered on tropical vacations, new shoes, or kitchen renovations.

But for those of us who have the discipline to save, $10,000 is large enough to start working towards larger financial goals. That’s doubly important if you are behind in your retirement planning or haven’t started saving at all.

Of course, it’s no secret that we’re big fans of dividend stocks here at Motley Fool Canada. There’s probably no better place to stash your cash than with companies that actually pay you to own them. So with that theme in mind, here are four dividend stocks I’d buy with $10,000.

1. PotashCorp

If there’s one business principle that will never change, then it might be this one: everybody has to eat. And PotashCorp (TSX: POT)(NYSE: POT) is the company that feeds them. Without the company’s fertilizer ingredients, we couldn’t feed our hungry planet. And given that the world’s population is expected to add over two billion people over the next 30 years, increasing fertilizer demand will pay for ever-growing dividends to PotashCorp shareholders.

2. Tim Hortons

Thanks to a brand that represents all things Canadian, Tim Hortons (TSX: THI)(NYSE: THI) has built a loyal customer base that gives it considerable pricing power. Even in a slow economy, few people are willing to skip their morning double-double. And it’s because of this strength that the company has been able to increase its dividend threefold since 2006.

3. Bank of Nova Scotia

Bank of Nova Scotia (TSX: BNS)(NYSE: BNS) stands out amongst the country’s big banks because it has chosen to expand into Asia and Latin America rather than the ferociously competitive U.S. market. While there are certainly risks in this strategy, the bank has diversified its operations and should ultimately yield higher returns. And given that the company has increased its dividend six times since 2011, management has shown an unwavering commitment to rewarding shareholders.

4. Canadian National Railway

Over the next 100 years we’re going to have more people living in this country using ever-greater quantities of products. And Canadian National Railway (TSX: CNR)(NYSE: CNI) will play an essential role in moving all of those products. Since 1995, the company has increased its dividend 15-fold. It’s likely to accomplish the feat again over the next 20 years.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robert Baillieul has no position in any stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway and PotashCorp. Canadian National Railway is a recommendation of Stock Advisor Canada.

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