Building a portfolio is like building a house. You need a strong foundation on which you can expand and grow. When it comes to growing your portfolio, there are plenty of options in the market for new and seasoned investors alike to choose from.
Here are a few picks that together form a diversified mix across different sectors and provide strong growth and income opportunities.
Canadian National Railway Company
Every portfolio should be well diversified with a railroad stock, and as far as railroad stocks go, Canadian National Railway Company (TSX:CNR)(NYSE:CNI) is one of the best picks for just about any portfolio.
Railroads have some of the most impressive moats on the market. Massive rail networks zigzag across the continent that are nearly impossible for any newcomer to replicate. Even better, with the rail industry the way it is, the Surface Transportation Board has made mergers of the existing Class One railroads difficult. It would be nearly impossible for someone to emerge to challenge Canadian National.
Canadian National is the only railroad on the continent with access to three coastlines — a major advantage. Once you factor in the diversified mix of freight that Canadian National hauls, the overly positive results over the past few quarters, and the growth of the stock over the past few years, you can see why this is one stock that forms the foundation of so many portfolios. Canadian National even offers investors a dividend; at just 1.55%, te dividend lacks the yield of many income stocks, but it can provide growth over long periods of time.
Utilities, contrary to the stereotype, are some of the best investments you can make. Think about it this way: utilities provide a necessary service that we take for granted, and the rate for that service is typically regulated thanks to power-purchase agreements that can span decades.
Utilities provide investors with a steady source of reliable, stable revenue. But what about growth prospects? This where Fortis Inc. (TSX:FTS)(NYSE:FTS) leaves all other utilities far behind.
Fortis has developed a knack over the years, pursuing expansion opportunities to boost the company’s footprint and to continue providing growth to shareholders. Fortis has an impressive history of dividend growth that spans over four decades, and it doesn’t seem to be ending anytime soon. The current dividend provides an appetizing 3.52% yield.
BCE Inc. (TSX:BCE)(NYSE:BCE) is the largest telecom in the country. Over the years, it has amassed a formidable media empire to complement its core business, which now includes radio and TV stations, as well as real estate holdings and a professional sports team. In fact, when it comes to the supremacy of BCE in the media space, chances are that you’ve used BCE’s assets to text, call, surf the internet, watch TV, or listen to the radio over the course of the day.
BCE’s core subscription services are, without a doubt, the jewel of the company’s crown. BCE has amassed a massive network that spans coast to coast to offer clients wireless, wired phone, internet, and TV subscription services. That network infrastructure forms a defensive moat around the company that would require tens of billions of investment and upwards of a decade in construction to rival.
And because that infrastructure is so well built, BCE can reward shareholders with an impressive dividend — something the company has been doing for well over a century. The current quarterly dividend from BCE provides an impressive 4.7% yield.
You may have heard about TransCanada Corporation (TSX:TRP)(NYSE:TRP) in passing with relation to the off and on again Keystone XL pipeline. More recently, the popular pipeline company pleased investors with a record-breaking quarter with earnings growth of 16%.
After the acquisition of Columbia Pipeline Group last year, TransCanada was propelled into the stratosphere as far as pipeline companies go; it gained natural gas assets as well as pipeline infrastructure across the northeastern U.S. and through the Gulf Coast.
If that weren’t enough, TransCanada has $23 billion worth of near-term projects in various states of progression. In total, those projects and the recent acquisition should continue to provide annual growth of its already impressive dividend by at least 8% over the next few years.
The current dividend stands at a 3.94% yield.
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Fool contributor Demetris Afxentiou has no position in any stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway. Canadian National Railway is a recommendation of Stock Advisor Canada.