Investors looking to maximize an income stream over a long period of time often look to a number of factors when considering an investment. Factors such as the safety of the underlying invested principal, safety of the current dividend yield, and growth opportunity for both yield and capital appreciation usually top the list.
Here are my top three picks for RRSP investors looking at putting money away for a long time.
Pick #1: Algonquin Power & Utilities Corp.
Algonquin Power & Utilities Corp. (TSX:AQN)(NYSE:AQN) has been one of my top picks for a while now for a number of reasons. The company’s current stable of unique and very valuable assets have provided Algonquin with industry-leading earnings potential and capital appreciation opportunity in addition to the company’s current dividend yield of 4.6%.
With one of the safest (and most attractive) yields in the North American utilities space, Algonquin will likely remain one of my top picks for some time to come.
Pick #2: Fortis Inc.
Fortis Inc. (TSX:FTS)(NYSE:FTS) is another one of my top picks which has continued to perform well, reducing the utilities giant’s dividend yield to its current 3.6% level. Fortis has a number of fantastic hydroelectric generation assets locked in for long-term contracts which provide increased stability for this company’s dividend yield moving forward.
The company has increased its dividend each of the past 43 years and is planning to continue to increase its dividend on the order of 6% per year for the next five years. With an unmatched track record of providing dividend growth and stability over the years, Fortis is a name every serious long-term investor should hold.
Pick #3: Canadian Utilities Limited
Canadian Utilities Limited (TSX:CU) rounds out my list of top long-term picks primarily due to the safety of the company’s revenues and cash flows over the years. Similar to the previous two picks, Canadian Utilities has a number of excellent long-term power-generation agreements in its portfolio which stand to serve investors well over the long term. The company’s current dividend yield sits just above 3.5%, and is also likely to continue growing over time as the utilities giant also has a fantastic track record in this regard of continuing to provide investors with annual dividend increases.
These three utilities companies provide the safety and security of defensive stocks with yields approaching levels typically seen with securities holding much higher risk profiles. For long-term income-focused investors, these three picks should provide continued growth and income appreciation over time, something which is in much-needed demand for retirement portfolios today.
Stay Foolish, my friends.
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Fool contributor Chris MacDonald has no position in any stocks mentioned.