Finding that right mix of investments that spans different segments of the economy while still providing a viable source of income and growth can be a daunting task for some investors. Fortunately, the three stocks outlined below offer a mix of growth and income-earning capabilities that can form the base of nearly any portfolio.
Want to own a toll-road network?
While Enbridge (TSX:ENB)(NYSE:ENB) is not getting into the toll-road business just yet, the company’s massive pipeline network business is best described as a toll road and warrants a closer look by prospective investors.
Enbridge operates one of the largest pipeline networks in the world, hauling over 60% of U.S.-bound Canadian crude as well as one-fifth of all natural gas consumed in the U.S. Enbridge charges companies that utilize its network, much like a toll road.
In the most recent quarter, that toll-road network hauled 2.7 million barrels per day, representing a gain of 100,000 barrels per day over the same period last year. Adjusted earnings in that quarter amounted to $1.64 billion, or $0.81 per share, surpassing the $0.72 per share analysts were expecting. In the same quarter last year, Enbridge earned $1.38 billion.
Apart from the necessary function that Enbridge performs (which continues to see strong growth), the company is also a strong pick for income seekers too. Enbridge currently provides a handsome 6.20% yield to investors through its quarterly dividend, easily making it one of the best-paying dividends on the market.
Enbridge currently trades at just over $47 with a P/E of 21.61
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Relax with America’s “most convenient bank”
I would be remiss if I didn’t at least mention at least one of Canada’s big banks, and Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is the bank to invest in. In the past decade, TD has expanded heavily into the lucrative American market, stitching together a network of branches that runs along the east coast from Maine to Florida.
In fact, that U.S. network is so large, it now surpasses the number of branches in Canada and has quietly become one of the largest banks in the U.S. The segment represents a third of all TD’s revenue, which, in the most recent quarter, amounted to $1,263 million in adjusted net income. That’s an impressive 29% year-over-year increase.
That’s not to say that TD’s domestic segment isn’t performing well; in the most recent quarterly update, the Canadian retail segment earned $1,877 million on an adjusted basis, reflecting a gain of 2% over the same period last year.
Turning to dividends, TD provides a quarterly payout that works out to an appetizing 3.87% yield, making the bank a viable option to buy and hold for nearly any portfolio.
TD currently trades at over $76 with a P/E of 12.34.
Start a recurring, renewable income stream
Renewable energy stocks are great long-term investments. In addition to providing significant growth prospects over their fossil fuel-burning peers, they also provide investors with a handsome dividend.
A prime example of this is Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN). Algonquin provides water, gas, and electric utility service to over 750,000 customers in a dozen U.S. states through its Liberty Utilities subsidiary, while its other subsidiary, Liberty Power, has a portfolio of over 35 clean-energy facilities.
Nearly a third of earnings stem from that renewable energy arm, which translates into a stable source of recurring revenue through its utility business.
Aggressive growth is something that Algonquin is well known for. Following the $2.4 billion acquisition of Empire District Electric last year, the company continues to move forth with additional opportunities as they present themselves, such as the acquisition of the Bermuda Electric Light company, which was announced last month.
The renewable segment is also seeing strong growth. Last month, Algonquin received approval to move ahead with a 600 MW wind farm project located in Missouri and Kansas. That project is set to be completed in 2020.
In terms of dividends, Algonquin provides investors with an impressive 4.59% yield, which saw a generous hike earlier this year.
The above investments represent a unique mix of options for income- and growth-seeking investors to consider, all of which hold long-term advantages. If they aren’t in your portfolio yet, then buy them and forget about them for a decade or more.
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 owns shares of Algonquin Power & Utilities. The Motley Fool owns shares of Enbridge. Enbridge is a recommendation of Stock Advisor Canada.