Finding the right mix of investments can make the difference between living comfortably in retirement or needing to work well into your 60s. Investors are often told to invest early, and diversify their portfolios, which is sound, but also important is selecting the right type of investments.
A well-balanced portfolio that draws off various segments of the market while also providing a moat against a market slowdown is paramount.
The following investments can provide that stability, growth and income your portfolio needs.
Let it flow
If you could invest in a company that offered a recurring revenue stream that is stable and often compared with a toll-road network, would you?
Enbridge (TSX:ENB)(NYSE:ENB) is that investment. Apart from operating one of the largest pipeline networks in the world, Enbridge remains an incredibly lucrative long-term opportunity thanks to the company’s stable revenue stream, incredible growth prospects, and handsome quarterly dividend.
That recurring revenue stream is a key point among investors, particularly those looking for a defensive investment that can withstand some market volatility. So how does Enbridge avoid the fluctuations in oil prices that have wreaked havoc on other energy-focused companies? Well, Enbridge charges use of its pipeline network by volume. This is where the toll road network reference stems from.
Also worth noting is that crude and natural gas are widely used outside of power generation, and demand continues to grow. In fact, a shortage of pipeline capacity connecting oil-rich Alberta with U.S. refineries remains a key point of growth for Enbridge that is likely to persist for the next decade.
Finally, there’s Enbridge’s dividend. The company’s lucrative 6.62% yield remains one of the most attractive aspects to investors, which has also seen a steady stream of annual hikes going back nearly a decade.
Enbridge currently trades just shy of $45, with a P/E of 18.20 at writing.
Look here for the green
Canada’s Banks remain some of the best-performing and safest investments on the market. Part of that stems from Canada’s highly-regulated financial sector, which has avoided the once-a-decade crisis that the larger U.S. financial market has endured.
But what if you could take that disciplined, regulated approach seen by Canada’s Big Banks and apply it to the massive market opportunity that awaits in the U.S.?
Enter Toronto-Dominion Bank (TSX:TD)(NYSE:TD).
In the aftermath of the Great Recession, TD began turning to the U.S. market for expansion, acquiring regional players along the U.S. East coast. Those acquisitions were then rebranded under a single TD Bank name and stitched together to form a network of branches that now extends from Maine to Florida.
The move also pushed TD up to become one of the largest banks in the U.S., with a network that now surpasses its presence in Canada.
That larger U.S. market translates into greater loan deposits, and by extension, earnings. In the most recent quarter, TD reported net income of $3,172 million, surpassing the $2,916 million reported in the same period last year.
TD currently provides investors with a handsome 4.12% yield, which continues to see annual hikes which the bank forecasts at a healthy 7% per year. The most recent uptick came earlier this year.
TD currently trades at just over $72 with a P/E of 4.12 at writing.
Final thoughts
Both TD and Enbridge are unique investments, as they both have lucrative growth prospects, great income-earning potential, while also operating in an environment that draws a wide moat.
In my opinion, they are both great long-term investments that are suitable for nearly any portfolio.
