RRSP Investors: 3 Top Dividend-Growth Stocks for 2020

This group of dividend-growth streakers, including Royal Bank of Canada (TSX:RY)(NYSE:RY), can help build your wealth the prudent way.

| More on:
Growth from coins

Image source: Getty Images

Hi, Fools. I’m back to highlight three top dividend-growth stocks. As a quick reminder, I do this because businesses with consistently increasing dividend payouts

  • can guard against the harmful effects of inflation by providing a rising income stream; and
  • tend to outperform the market averages over the long haul.

The three stocks below offer an average dividend yield of 3.5%. Thus, if you spread them out evenly in an average $250K RRSP account, the group will provide you with a growing $8,750 annual income stream. And it’s all completely passive.

Let’s get to it.

Royal money

Leading things off is financial gorilla Royal Bank of Canada (TSX:RY)(NYSE:RY), which has grown its dividend 41% over the past five years.

Royal Bank’s highly regulated operating environment, leadership position in five segments, and massive scale (16 million clients) should continue to support strong dividend growth for many years to come. In the most recent quarter, EPS increased to $2.26 on strong growth in personal & commercial banking, wealth management, and insurance.

“Our focused strategy and diversified business mix continue to deliver strong returns for our shareholders as we leverage our scale and investments in technology to create new value streams for our clients,” said CEO Dave McKay.

RBC shares are up 15% so far in 2019 and offer a healthy dividend yield of 3.9%.

Solid granite

With dividend growth of 80% over the past five years, industrial real estate company Granite REIT (TSX:GRT.UN) is next up on our list.

Granite’s reliable dividend growth is underpinned by strong scale (80 properties with about 34 million square feet of leasable area), global footprint, and low leverage. In the most recent quarter, funds from operations (FFO) clocked in at a solid $43 million.

“Management continues to identify and pursue value creation and investment opportunities that will generate superior long-term total return for unitholders,” wrote the company. “Granite has positioned itself financially to capitalize on a strong pipeline of acquisition and development opportunities within its geographic footprint and execute on its strategic plan.”

Granite shares are up 23% so far in 2019 and currently offer a juicy yield of 4.3%.

Data-driven opportunity

Rounding out our list financial information specialist Thomson Reuters (TSX:TRI)(NYSE:TRI), which has grown its dividend 23% over the past five years.

Thomson’s highly stable payout growth continues to be backed its global news service, strong leadership position, and recurring, subscription-based model. In the most recent quarter, operating profit spiked 119% as revenue improved 9% to $1.4 billion.

“Organic revenue growth was the best since 2008 and came in ahead of our expectations at 4% as a result of solid performance across the business,” said CEO Jim Smith. “We believe we are well positioned for future growth and now expect 2019 and 2020 revenue growth and adjusted EBITDA to each be at the upper end of the guidance ranges previously provided.”

Thomson shares are up 32% in 2019 and offer a solid yield of 2.2%.

The bottom line

There you have it, Fools: three top dividend-growth stocks worth checking out.

As always, they aren’t formal recommendations. They’re simply a starting point for more research. The breaking of a dividend-growth streak can be especially painful, so plenty of due diligence is still required.

Fool on.

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 Brian Pacampara owns no position in any of the companies mentioned.   

More on Dividend Stocks

stock research, analyze data
Dividend Stocks

How Much to Invest to Get $500 in Dividends Every Month

TSX dividend stocks such as Enbridge, TD Bank, and Telus, can help you earn $500 in monthly dividend payments.

Read more »

Golden crown on a red velvet background
Dividend Stocks

Dividend Powerhouses: Canadian Stocks to Fuel Your Portfolio

These two top Canadian dividend aristocrats are some of the top stocks on the TSX to buy now and hold…

Read more »

Dial moving from 4G to 5G
Dividend Stocks

This Undervalued Dividend Stock is Worth Buying Right Now

Want an undervalued dividend stock with long-term potential and a juicy yield? Here's an option you may regret not buying…

Read more »

A worker gives a business presentation.
Dividend Stocks

1 Stock I’m Buying Hand Over Fist in July Despite the Market’s Pessimism

This top dividend stock is going through a rough patch, but don't let that count out all the growth we've…

Read more »

person on phone leaning against outside wall with scenic view at airbnb rental property
Dividend Stocks

2 TSX Stocks Poised to Have a Big Summer

Restaurant Brands International (TSX:QSR) stock and another darling that could be too cheap to ignore this summer.

Read more »

Dividend Stocks

Forget Fortis Stock: Buy This Magnificent Utilities Stock Instead

Looking for high dividends and returns? Then I'm sorry, but Fortis (TSX:FTS) stock probably isn't for you.

Read more »

Increasing yield
Dividend Stocks

2 High-Yield (But Slightly Risky) Stocks to Keep Your Eye on

Have these top TSX dividend stocks finally bottomed?

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks I’d Buy if They Fall a Bit

Any near-term decline in these two top Canadian dividend stocks will make them look even more attractive.

Read more »