I’m not a gambler. The only time I will ever even buy a ticket that could win money is if its proceeds supported a good cause. However, if I ever did actually win, I know exactly what I’d do. I’d take that cash and buy a bunch of dividend stocks so I could make my winnings last a lifetime.
Here are five dividend stocks that would be at the top of my list to buy if I ever won big.
I’ve long admired the world’s largest fertilizer producer. PotashCorp (TSX: POT)(NYSE: POT) has the three critical characteristics I want in a long-term investment as it pays a compelling dividend, has visible near-term organic growth and is well positioned to profit from a long-term mega trend. That’s why I recently made an effort to add it to my own retirement account.
PotashCorp’s dividend has surged over the past few years as it’s up 950% since January 2011. However, its dividend should continue to skyrocket in the years ahead. The company is 93% complete with its current expansion program, which is yielding increased cash flow from both diminished capital spending and increased sales capacity. Because of that PotashCorp’s dividend should continue to soar over the next few years.
2. Rogers Communications
As the leading diversified Canadian communications and media company, Rogers (TSX: RCI.B)(NYSE: RCI) is another solid stock that would allow my winnings to keep on growing through dividends. Rogers is already the country’s largest wireless provider as well as a leading cable provider making its services critical to so many Canadians. Beyond that Rogers’ media group provides content across multiple platforms and in a world where content is king, Rogers reigns supreme in Canada.
3. Cenovus Energy
With a premiere position in Canada’s oil sands region, Cenovus Energy (TSX: CVE) is another company that has a business that is built to last. In fact, the company’s growth plan has visibility for nearly a decade as it is expected to deliver oil and gas production growth of 11% annually through 2023. Even better is that the company is among the lowest cost producers in the region, so that growth will pad its cash flow and enable Cenovus Energy to continue growing its dividend at a healthy clip.
Enbridge (TSX: ENB) is another company that pays a decent dividend and has visible growth over the next few years. Currently, the company is investing in a number of infrastructure projects that it will place into service between now and 2017. Enbridge sees these projects as being the key to growing its earnings by 10%-12% each year for the next five years. Further, the company expects to be able to enhance its dividend by around the same rate as it grows its earnings. That makes it a great dividend stock to really stretch my winnings out.
Enerplus (TSX: ERF) is another Canadian energy producer that pays a solid dividend. The big difference with its dividend is that it is paid monthly as opposed to quarterly. That makes it a real winning investment for those like me who are looking for really consistent cash flow.
The other big difference with Enerplus is that its growth is actually fueled by American shale plays as opposed to its Canadian operations. The company’s position in the gas-rich Marcellus Shale and oil-rich Bakken Shale provide ample near-term growth opportunities for the company. In addition to that, Enerplus has an intriguing position in the emerging Duvernay Shale of Canada that could provide more fuel to the company’s dividend in the future.
Because I don’t gamble unless it’s for a really good cause, I’ll probably never win a big $10,000 lump sum of money. That being said, I can still win with these stocks by investing in smaller increments each month. Some day in the future those small investments will add up to a big retirement fund.
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Fool contributor Matt DiLallo owns shares of Rogers Communications and has the following options: short September 2014 $35 puts on PotashCorp and short September 2014 $35 puts on PotashCorp. The Motley Fool owns shares of PotashCorp.