Agrium Inc. and BCE Inc.: 2 Dividend Growth Darlings for Savvy Investors

Agrium Inc. (TSX: AGU)(NYSE: AGU) and BCE Inc. (TSX: BCE)(NYSE: BCE) are great companies for investors looking to build a portfolio consisting of a diverse blend of quality growth stocks that pay reliable dividends.

With stock markets reaching new highs, a meaningful correction is likely on the way. Long-term investors know that pullbacks are an opportunity to add top companies to their positions, but it’s unknown when this correction will occur.

If you’re looking for a place to put new money right now, it is important to pick stocks that pay growing dividends and will not keep you up at night when the rough times in the market finally arrive.

Here are the reasons why I think Agrium and BCE are solid choices for dividend investors right now.

Agrium Inc.

When investors want to look for growth, Agrium is a stock they can plant in their portfolios and forget about for decades. This company is a great way to profit from the global demand for crop nutrients.

Agrium’s wholesale division produces nitrogen, phosphate, and potash for sale to the global market. Its retail division is North America’s largest direct-to-grower distributor of seeds, crop nutrients, and crop protection products.

Times have been tough recently in the wholesale potash and nitrogen markets, and Agrium has had problems at a couple of its production facilities. Despite these troubles, the stock has held up very well.

Investors should look past the recent setbacks.

For instance, Agrium’s expansion at its flagship Vanscoy potash operation will eventually add 40% to its capacity, and the completion of the $2 billion project means more free cash flow will be available to return to shareholders.

Although potash prices have bottomed, nitrogen margins are improving due to lower natural gas input costs, and the retail division continues to grow at a healthy rate.

In the past three years, Agruim has increased its quarterly dividend from $0.055 to $0.75 — a massive 1,364% hike! Shareholders should see the dividend rise even further.

Agrium’s dividend is paid in U.S. dollars and yields about 3.25%.

BCE Inc.

Investors interested in a market champion that pays a great dividend and delivers consistent growth should consider BCE Inc.

Canada’s largest communications company has transformed itself from a boring old telephone utility into a dynamic media giant. It owns wireline and wireless telecom assets, advertising operations, media content, and sports franchises. This mix gives the company a great advantage; it not only controls the means of delivery to its customers, but also owns some of the best content they watch, read, or listen to.

BCE recently announced that it would be spending $3.95 billion to take its subsidiary Bell Aliant Inc (TSX: BA) private. The juicy payouts that were going to Bell Aliant’s investors will now be available for stockholders of its new owner.

The company is also getting a boost to free cash flow from last year’s $3.4 billion acquisition of Astral Media.

BCE pays a quarterly dividend of $0.62 and yields about 5%. Investors should see regular dividend increases in the coming years as its media division continues to grow.

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Fool contributor Andrew Walker has no position in any stocks mentioned. Agrium is a recommendation of Stock Advisor Canada.

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