Tax filing season is dead ahead for Canadians. Many Canadians will be forced to review their holdings when they file. This can be a tedious exercise, but it can be made productive for those seeking to improve their returns in the 2020s.
In late December I’d discussed why stocks that boast a long history of dividend-growth were attractive targets for RRSP investors. Today we are going to look at two stocks that provide income, but are not in the elite when it comes to dividend growth. However, these equities offer a combination of growth and income that should be enticing for those saving up for retirement.
Toromont Industries (TSX:TIH)
Toromont Industries is an Ontario-based industrial company that operates in two segments, Equipment Group and CIMCO. Shares of Toromont have climbed 20.7% in 2019 as of close on February 15. The stock is up 22% year over year.
Toromont stock has gained huge momentum in 2019. The stock shot up again after the release of its fourth-quarter and full-year results on February 14. For the full-year, revenues soared 49% from 2017 to $3.50 billion in 2018. Net earnings increased 43% year-over-year to $252 million or $3.10 per share. The board of directors elected to increase its quarterly dividend by 17.4% to $0.27 per share, which represents a modest 1.4% yield.
Toromont has achieved six consecutive years of dividend growth, and shares have soared 109% over the past three years. However, investors may want to await a pullback before jumping in right now. The toromont stock boasts an RSI of 78, thereby indicating that it is overbought after its most recent earnings release.
Cargojet (TSX:CJT)
Cargojet is a Mississauga-based company that operates an overnight cargo co-load network across Canada. This time last year I’d recommended that investors go with Cargojet over a passenger airliner stock. Cargojet stock has climbed 35.8% year over year.
Shares have increased 18.4% in 2019 so far. The company is expected to release its fourth-quarter and full-year results for 2018 on February 21. Should investors look to stack ahead of its earnings release in hopes of a Toromont-like bump?
In the third quarter, the company saw revenues rise 27.6% year-over-year to $114.1 million and adjusted EBITDA increased 24% to $31.5 million. Cargojet last announced a quarterly dividend of $0.2120 per share, which represents a 1% yield. Its modest yield should come as no surprise, as Cargojet’s appeal over the past several years has been as a growth stock.
Investors hunting for growth are looking at a pricey option in Cargojet. The stock is veering back toward the all-time highs reached in early October. Shares boasted an RSI of 73 as of close on February 15. That indicates that the stock will enter this trading week in technically oversold territory.
Both of these stocks are attractive long-term holds, but investors looking to reorient their RRSPs should await more favourable pricing going forward.
