These three stocks have all outperformed the Toronto Stock Exchange since January 1995.
Stella-Jones (TSX:SJ), Methanex (TSX:MX), and Nutrien (TSX:NTR)(NYSE:NTR) have provided Canadian retirees with outsized capital gains plus regular dividends in the past 25 years.
Methanex
If you had invested in Methanex in 1995, you would have most likely paid $20.88 per share. Today, the stock trades for $45.55 per share — giving you a capital gain of over 118% from your initial purchase.
Moreover, you would have also collected regular (and steadily growing) dividends since 2002 when the stock began issuing dividends. The current dividend is $0.476 per share at an annual yield of 4.28% at its current price.
While the past is not necessarily a good indicator of the future, the trend toward renewable energy only galvanizes demand for methanol. Methanex is one of the methanol producers investing in renewable methanol and promoting this chemical as an environmentally friendly alternative to traditional fuel.
Methanol is a highly toxic and flammable alcohol used primarily for organic synthesis in fuels, solvents, and antifreeze, including biodiesel. Biodiesel is an alternative fuel produced from vegetable oil. Biodiesel gained substantial popularity in 2009 when oil prices exploded because it was a cheaper alternative to gasoline.
Stella-Jones
In 1995, Stella-Jones traded for $0.55 per share. If you had invested in this stock at that price, you would be sitting on a capital gain of 6,840%. Even better: the stock has reliably paid out dividends to shareholders since 1999!
The corporation first issued a dividend payment in March 1999 at $0.0045 per share. Today, shareholders enjoy a dividend payment of $0.14 at a yield of 1.48%. Imagine the luxurious retirement a 100-share investment in Stella Jones would have given you.
Founded in 1992, Stella-Jones manufactures and sells railroad ties and wood products in Canada. Telecommunications is one of its most profitable industries. The big telecom companies rely on Stella-Jones to install utility poles.
Stella-Jones should benefit in the next year, as Telus expands broadband internet access, and the other telecom giants complete the required 5G equipment upgrades.
Nutrien
Canadians undoubtedly want to add this power player to their retirement portfolios. Long-time Nutrien shareholders (formerly known as Potash Corp and Agrium) earned an 884% return over the past 25 years. In 1995, shares of the now merged Potash Corp and Agrium sold for $6.74 each. Today, the stock trades for $66.29.
The downside for Nutrien investors all these years is the lack of dividends. Unlike Stella-Jones, Nutrien only began to issue dividends in 2018. Today, shareholders in Nutrien earn an annual 3.66% interest in dividend payments at the current share price.
Nutrien formed after Agrium and Potash Corp merged in 2016. The companies adopted the name of Nutrien post-merger and disbanded former TSX symbols. As a result, the companies’ revenue shot up to over $19 million from less than $5 million in 2017.
Nutrien now earns a gross profit of over $5.4 million per year. Together, they can afford to give shareholders an excellent annual return.
Foolish takeaway
Long-term investing pays off. These three stocks prove that there are great profit opportunities for Canadian savers.
Out of these three stocks, Nutrien is probably the best stock to add to your Tax-Free Savings Account. Because it is a new dividend payer and a corporation reaping the benefits from a successful merger, Canadians can’t go wrong by adding this top performer to their retirement portfolios.
