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TFSA Investors: 3 Monster Dividend Growth Stocks You Should Own

The S&P/TSX Composite Index has rewarded TFSA investors who jumped into the dip in late 2018. However, the economy is facing headwinds that could spill over into the market in the coming months. It is unlikely the TSX Index will maintain this pace for the rest of 2019, which means it is a good time to think about taking those tax-free profits and reinvesting in income-yielding equities.

In February I discussed the importance of owning high-quality stocks that have achieved consistent dividend growth. Today we are going to look at three stocks that have achieved over two decades of dividend growth.

Canadian National Railway (TSX:CNR)(NYSE:CNI)

Canadian National Railway recently celebrated a century of operations. The stock had climbed 15.9% in 2019 as of close on March 26. Shares were up over 25% from the prior year.

The company posted a strong finish to fiscal 2018. In Q4 CNR saw revenue rise 16% year-over-year to $3.81 billion and it reported earnings per share of $1.49. This managed to beat analyst estimates. CNR announced an 18% increase to its quarterly dividend to $0.45 per share. This represents a modest 1.6% yield, but the company has achieved dividend growth for 23 consecutive years.

Metro (TSX:MRU)

Metro is a Montreal-based grocery retailer that operates in Quebec and Ontario. The stock was up 3.4% in 2019 as of this writing. Shares were up over 20% year over year.

Canadian grocery retail stocks experienced turbulence after Amazon announced its acquisition of Whole Foods back in 2017. The sector has been defined by harsh competition which is only expected to intensify with the entrance of the gigantic e-commerce disruptor into the market. Canadian grocery retailers have attempted to get ahead of this by introducing e-commerce offerings to customers.

Metro is expected to bring its grocery delivery service to parts of Ontario in the late spring. Currently it is only available in Quebec. In the first quarter of 2019, Metro reported a 39.9% year-over-year increase in adjusted net income to $172.2 million. It rose its dividend by 11% to $0.20 per share, which represents a 1.5% yield.

Metro has achieved dividend growth for 24 consecutive years.

Imperial Oil (TSX:IMO)(NYSE:IMO)

Imperial Oil is one of Canada’s largest integrated oil companies. Shares were up 5.5% in 2019 as of close on March 26. The stock has battled volatility since the 2014-2015 oil price shocks. The Canadian oil patch entered 2019 in a period of crisis, but production cuts have managed to bring oil price differential back into a manageable range.

Imperial Oil reported a profit of $853 million in the fourth quarter of 2018 compared to a $137 million loss in the prior year. The company last paid out a quarterly dividend of $0.19 per share, which represents a 2% yield. Imperial Oil has achieved dividend growth for 24 consecutive years. However, in a turbulent energy sector this represents the least attractive buy-and-hold among the three we have covered today.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. David Gardner owns shares of Amazon and Canadian National Railway. The Motley Fool owns shares of Amazon and Canadian National Railway. CN is a recommendation of Stock Advisor Canada.

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