Picking the right mix of income and growth investments for your portfolio can be a daunting task, particularly if you are new to investing or haven’t had the opportunity to build up years of investments for retirement.
Often, investors will lean towards either dividend-paying or growth-oriented stocks, not realizing that they can have their cake and eat it too with the right investments.
Here are several investments that will cater to both growth- and income-seeking investors.
You can’t take into consideration any great investments without including at least one of the big banks, which should be core to nearly every portfolio. Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) in particular has attracted my attention recently as a compelling investment option with massive growth opportunity.
Over the past few years, Bank of Nova Scotia has expanded into the Latin American market rather than carving up a swath of the U.S. market to expand into, as many of its peers did. Specifically, Bank of Nova Scotia targeted member states of the Pacific Alliance, and that decision has proven incredibly successful, as the international segment continues to outperform during earnings season with double-digit growth.
Additionally, Bank of Nova Scotia has grown increasingly aggressive on the expansion front over the past year, announcing several new acquisitions, with the most recent being last month.
Bank of Nova Scotia currently offers investors an attractive quarterly dividend that pays a 4.36% yield.
Another investment that should be near the top of the list of any investor is a telecom. Canada’s telecoms are among the best-paying income investments on the market, and BCE Inc. (TSX:BCE)(NYSE:BCE) leads the charge with a quarterly dividend that pays an incredible 5.63% yield.
Prospective investors should also note that BCE is one just a few companies on the market today that has been paying dividends consistently for well over a century, with annual or better increases nearly every year.
As the largest of Canada’s telecoms, BCE enjoys a sizable moat over its competition, and it boasts an enviable media empire that includes everything from TV and radio stations to owning an interest in professional sports teams.
One reason to consider BCE as an investment to hold is its mobile unit. Mobile devices are becoming increasingly more prevalent in our modern world, with a greater proportion of our daily routine and business becoming ever more reliant on it. As our usage continues to increase, so too does our need for new devices and more data, all of which BCE is pleased to provide.
Utilities are yet another interesting option for investors, and Algonquin Power & Utilities Corp. (TSX:AQN)(NYSE:AQN) should be at the top of the list of nearly any investor, thanks to its stable business model.
Utilities earn income through what are predominately regulated long-term contracts that can span several decades. In other words, utilities have a stable and recurring source of revenue, which is passed on to investors through what is typically a very handsome dividend.
In the case of Algonquin, the company is targeting 10% growth over the next few years to what is already an incredibly generous 5.26% yield.
One often-overlooked segment of the economy by investors are railroads, or, more specifically, rail freight. Canadian National Railway (TSX:CNR)(NYSE:CNI) is the largest railroad in Canada and one of the largest on the continent, with tracks that span coast to coast and cut through the U.S. Midwest down to the Gulf region.
Most investors fail to realize the importance that rail freight still plays on the economy as well as the sheer volume hauled on an annual basis. Rail still constitutes a significant portion of all freight in North America, hauling everything from crude oil and raw materials to automotive components and wheat, and Canadian National hauls upwards of $250 billion in goods each year. In many ways, this makes railroads more of an arterial vein to the entire North American economy.
While Canadian National’s quarterly dividend yield of 1.65% may seem anemic compared to the other companies I’ve mentioned, over the long term this is a stable and growing business that will produce massive gains for investors.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
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.