The Motley Fool

3 Dividend-Growth Stocks That Won’t Let You Down

Canadian investors are being reminded that markets can be volatile, but savvy savers with buy-and-hold strategies are not worried. In fact, they love this pullback.


Market corrections tend to present great buying opportunities, especially for quality dividend-growth stocks.

Here are the reasons why I think investors should consider Telus Corporation (TSX:T)(NYSE:TU), Bank of Montreal (TSX:BMO)(NYSE:BMO), and Canadian National Railway Company (TSX:CNR)(NYSE:CNI) right now.


Telus is the fastest-growing player in the Canadian telecom market. The stock has been under pressure recently as investors worry about new mobile competition from Shaw Communications.

The two companies already compete for TV and Internet customers in western Canada, and Shaw’s planned acquisition of Wind Mobile will give it a mobile offering to match the services offered by Telus.

The market seems to be ignoring the fact that Telus is already holding its own against Rogers and BCE, so the addition of Shaw to the mix is unlikely to make a big difference.

Telus pays a quarterly dividend of $0.44 per share that yields 4.8%.

Bank of Montreal

Bank of Montreal tends to lie in the shadows of its larger peers, but investors should probably give the name more respect.

The bank’s revenue stream is diversified across several segments of the market with strong operations in Canadian retail, wealth management, and capital markets. The company also has a growing operation in the U.S., which gives investors a great way to play the rising American dollar.

Bank of Montreal is Canada’s oldest bank and has paid a dividend every year since 1829. That’s a track record that investors can count on in difficult times. The stock offers a quarterly dividend of $0.84 per share that yields 4.7%.

Canadian National Railway

Canadian National Railway is one of those companies you can simply buy and forget about for decades. The railway enjoys a dominant and sustainable, competitive position and is run by one of the best management teams in the industry.

Dividend investors often skip Canadian National Railway because it only offers a yield of 1.7%, but the yield is only part of the story. Canadian National is actually dividend-growth juggernaut. The company raised the payout by 25% in 2015 and another juicy hike should be on the way this year.

The company also has an aggressive share-repurchase program. This benefits investors because every share that is bought back and canceled leaves a bigger piece of the pie for the remaining stockholders.

The stock has pulled back as a result of the slowdown in energy-related shipments, but Canadian National Railway gets its revenue from many segments of the economy, and weakness in one group tends to be offset by strength in another.

Like Bank of Montreal, Canadian National Railway is a good way to benefit from the strong greenback because the company originates a healthy part of its earnings in U.S. dollars.

The 10 Best Stocks to Buy This Month

Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you. Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.

Click Here to Learn More Today!

Fool contributor Andrew Walker 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 ROGERS COMMUNICATIONS INC. CL B NV. Canadian National Railway and Rogers Communications are recommendations of Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.