Selecting the right mix of investments can mean the difference between retiring early or working well beyond your expected retirement date. Adding those investments to your portfolio as early as possible maximizes your potential returns and puts you well on the way towards realizing those retirement dreams that we all have.
So, where does an aspiring future retiree start? Start with these four buy-and-forget superstars. Load them into your RRSP (which, coincidentally, has a rapidly approaching deadline) and let them grow undisturbed.
A telecom with a great history and a wide moat
I absolutely love telecom investments, and one of my all-time favourite picks here is BCE Inc. (TSX:BCE)(NYSE:BCE). Beyond being the largest telecom in the nation, BCE offers investors several competing advantages over the competition that make this the go-to telecom for your portfolio.
BCE’s diversified business mix keeps you connected to the BCE media empire. Whether you’re watching TV, sending a text message, surfing the web, or even attend a sporting event, you’re inundated with BCE-owned assets.
BCE’s massive infrastructure helps the company maintain its impressive coverage over the competition, but also means that dividend yields are higher and more lucrative. BCE’s current quarterly dividend amounts to a yield of 5.43%, and the recent pullback in prices has the stock trading at discount levels.
A railroad with an even larger moat and massive potential
Canadian National Railway Company (TSX:CNR)(NYSE:CNI) is the largest railroad in Canada and has several compelling reasons investors should consider this gem of an investment.
Railroads are still one of the most incredibly visible yet completely unnoticed opportunities on the market. We’ve all seen the long freight trains that can span for kilometres, but we seldom think about the sheer volume of freight hauled, or the massive network of track that hauls goods all over the continent, forming the ultimate moat.
Canadian National is the only railroad on the continent with access to three different coastlines; its impressive network spans coast to coast and the U.S. Midwest to the Gulf region. This opens the railroad to a host of diversified freight combinations with anything from automotive components and crude to wheat and raw materials hauled to ports and factories around the continent.
In terms of long-term growth and dividends, Canadian National offers investors a quarterly dividend that pays a 1.89% yield, which is a very sustainable 23% payout level that is set to continue growing over the next few years.
The recent market correction has discounted several great stocks to low levels, and Canadian National has fallen to below $100, making it an excellent buying opportunity.
A utility you can buy and forget
Utility investments are peculiar in that they can offer a secure source of recurring income that translates into an impressive dividend payout, yet many investors still shy away from utilities owing to the belief that they lack growth.
There are several great utility investments on the market to choose from, but the one I keep turning back to is Algonquin Power & Utilities Corp. (TSX:AQN)(NYS:AQN). Algonquin is targeting a 10% annual growth over the next few years to an already impressive 4.65% yield.
Algonquin has a customer base of over 750,000 in the U.S., offering a well-diversified mix of electricity, natural gas, and water segments. The company also has a renewable energy arm that has hydro, solar, and wind elements.
A bank with growth prospects that pays you a great dividend
Canada’s big banks are renowned for their impressive performance and strong dividend payouts. Bank of Montreal (TSX:BMO)(NYSE:BMO) is a standout in this regard, as the bank has been rewarding shareholders for longer than Canada has been a nation.
Bank of Montreal was the first company to offer a dividend to investors, doing so back in the early 1800s. Since then, Bank of Montreal has had an impressive record of supporting that dividend and steadily increasing it.
The current quarterly dividend provides a healthy 3.83% yield, and if that isn’t reason enough to consider this bank, then perhaps the growing network of locations the bank has in the U.S., which continues to fuel growth for the company, will help.
