Passive Investors: Sit Back and Watch These 3 Stocks Grow

Passive investors looking to put their portfolio on autopilot should consider dividend-paying greats such as Telus (TSX:T)(NYSE:TU) and these two others.

| More on:
little girl in pilot costume playing and dreaming of flying over the sky

Image source: Getty Images

Many view passive income stocks as the holy grail of investments. In short, you buy the stock, forget about it for a decade or more and enjoy the sweet dividends that the stocks offer, maybe even realizing some growth during that time too. Sounds intriguing, right?

Here are several great passive income candidates to consider adding to your portfolio.

Telus (TSX:T)(NYSE:TU) is neither the largest nor most renowned of Canada’s telecoms, but the company does have several intriguing points for potential investors to consider far beyond its attractive quarterly dividend that provides a 4.42% yield. Then again, I would be remiss if I didn’t mention that Telus’ dividend has more than doubled in the past decade, maintaining a CAGR of near 9% over that period, with no end of those annual or better hikes to occur anytime soon and the company currently forecasting annual growth of 7-10% through 2022.

Wireless connections have become staples of our modern society. Telus has therefore invested heavily to bolster its network, attract new customers, and do more to keep existing customers from migrating. In the most recent quarter, those efforts led to the telecom adding 60,000 new subscribers consisting of both mobile phones and connected devices. In the same vein, Telus saw a slight improvement in its churn rate during the quarter, which came in at 1.02%.

It would be folly to assemble a list of viable passive income stocks without some mention from the energy sector. Pipeline companies, in particular, offer investors an incredible opportunity to realize handsome gains from what is a lucratively stable and recurring business model, and this is where Enbridge (TSX:ENB)(NYSE:ENB) comes into play.

So what makes Enbridge such an attractive option for passive investors? There are several key points to consider.

First and foremost, there’s Enbridge’s sheer size. The company’s pipeline network is used by a quarter of all oil in North America, and one-fifth of natural gas produced. That size and volume make it nearly impossible for a would-be competitor to emerge to challenge Enbridge.

Adding to that appeal is the fact that most of Enbridge’s stable revenue stems from regulated contacts, which as a reminder, is based on volume, not on the price of oil.

Throw in the obvious challenges and opposition to constructing new pipelines despite growing demand and you have a compelling investment opportunity that isn’t changing anytime soon, which also happens to provide a handsome quarterly dividend with a yield of 5.96%.

One final addition to consider is Manulife Financial (TSX:MFC)(NYSE:MFC), which represents a unique growth and income-producing opportunity for investors. As Canada’s largest insurer, Manulife currently counts more than a third of Canadians as clients, which is impressive but also necessitated the company moving to foreign markets to continue realizing growth.

That growth was found in the markets of Asia, where rapidly increasing wages and standards have led to a generation of investors with trillions in passed-down wealth and a desire to purchase the financial products that Manulife offers. That company’s expansion into Asia was nothing short of phenomenal; the company established agreements with financial institutions in markets across the region, becoming the preferred, and in many cases, exclusive purveyor of those financial products.

The result has been double-digit growth from the region during earnings season, and those international markets steadily taking up a larger share of earnings.

That’s not to say the domestic market has completely stagnated either; efforts to modernize the company and adopt new technologies such as AI have all had success in the past few quarters, and further advancements to find value and become more efficient are expected to continue.

In terms of a dividend, Manulife offers a quarterly payout that currently provides a handsome 4.05% yield.

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 of the stocks mentioned. The Motley Fool owns shares of Enbridge. Enbridge is a recommendation of Stock Advisor Canada.

More on Dividend Stocks

growing plant shoots on stacked coins
Dividend Stocks

4 Ways to Grow $100,000 Into $1 Million in Retirement Savings

Anyone can build a million-dollar retirement portfolio. Here are four ways you could practically grow $100,000 to $1 million.

Read more »

A shopper makes purchases from an online store.
Dividend Stocks

3 Reasons to Buy TFI Stock Like There’s No Tomorrow

TFI stock (TSX:TFII) had a hard 2023, but now it's set up for a solid 2024, with an acquisition that…

Read more »

Dividend Stocks

5 Secrets of TFSA Millionaires

These lesser-known secrets can help you set up the perfect long-term portfolio and achieve a million-dollar TFSA!

Read more »

analyze data
Dividend Stocks

How to Build a Powerful Passive-Income Portfolio With Just $20,000

These fundamentally strong TSX stocks have paid and increased their dividend in all market conditions. Add these stocks to build…

Read more »

Canadian stocks are rising
Dividend Stocks

iShares S&P/TSX Capped REIT Index ETF (TSX:XRE): Why I Like this ETF Better Than a Rental Property

XRE is a great ETF for gaining exposure to the Canadian real estate sector.

Read more »

Payday ringed on a calendar
Dividend Stocks

3 High-Yield Dividend Stocks That Pay Cash Every Month

These three dividend stocks all offer high yields and have sustainable dividends, making them some of the best investments to…

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

3 Stocks That Could Create Lasting Generational Wealth

If you want to start transferring over your wealth, you'll need to actually have some! And these are three stocks…

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Dividend Stocks

Down by 25%: Is Canadian Tire Stock a Buy in February 2024?

Take a closer look at this Canadian retail stock if you are looking for low-cost additions to your self-directed portfolio…

Read more »