Lazy Retirees: 3 Top Dividend Growth Stocks for 2020

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

| More on:
Hand arranging wood block stacking as step stair with arrow up.

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 3.7%. Thus, if you spread them out evenly in an average $250,000 RRSP account, the group will provide you with a growing $9,250 annual income stream. And it’s all completely passive.

Let’s get to it.

Bank on it

Leading things off is financial gorilla Bank of Nova Scotia (TSX:CM)(NYSE:CM), which has grown its dividend 40% over the past five years.

Scotiabank’s sheer scale (total assets of $597.1 billion), massive deposit base ($461 billion), and regulated banking environment should continue to support strong dividend growth for many years to come. In the most recent quarter, adjusted earnings improved 4% on strong performance in Canadian personal and small business banking.

“In the third quarter, we delivered solid results through the continued execution of our client-focused strategy,” said CEO Victor Dodig. “Our diversified growth on both sides of the border is a result of a highly connected, purpose-led team working together to meet the needs of our clients.”

Scotia shares currently yield a tasty 4.8%.

Electric opportunity

With dividend growth of 39% over the past five years, electric and gas utility Fortis (TSX:FTS)(NYSE:FTS) is next up on our list.

Fortis’ reliable dividend growth continues to be underpinned by massive scale ($52 billion in total assets), recurring cash flows (3.3 million customers), and a highly regulated operating environment. In the most recent quarter, EPS of $1.66 topped estimates as revenue inched up 1% to $2 billion.

“Fortis expects long-term sustainable growth in rate base to support continuing growth in earnings and dividends,” wrote the company. “Fortis is targeting average annual dividend growth of approximately 6% through 2023.”

Fortis shares are up an impressive 49% so far in 2019 and currently offer an attractive yield of 3.6%.

Park it here

Rounding out our list is oil and gas refiner Parkland Fuel (TSX:PKI), which has grown its dividend 12% over the past five years.

Parkland’s stable payout growth continues to be backed by its integrated supply chain, massive volumes (~22 billion litres of annual fuel volume), and diversified geographic reach. In the most recent quarter, EPS clocked in at $0.70 as revenue jumped 28% to $4.9 billion.

“The strength of Parkland’s diverse portfolio and integrated assets was on full display in the second quarter, driving outstanding results” said CEO Bob Espey. “Our International, USA and Supply segments underpinned our performance, and we also benefited from further synergy capture including early wins within Sol.”

Parkland shares are up 25% in 2019 and offer a solid dividend yield of 2.7%.

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.

Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool recommends BANK OF NOVA SCOTIA.

More on Dividend Stocks

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

think thought consider
Dividend Stocks

Down 10.88%: Is ATD Stock a Good Buy After Earnings?

Alimentation Couche-Tard (TSX:ATD) stock might not be the easy buy-case it once was. Here’s a look at what happened.

Read more »

money cash dividends
Dividend Stocks

TFSA Dividend Stocks: Earn $1,200/Year Tax-Free

Canadian stocks like Fortis are a must-have in your portfolio to earn tax-free yields for decades.

Read more »

sale discount best price
Dividend Stocks

1 Dividend Stock Down 11 Percent to Buy Right Now

Do you want a great dividend stock down 11% that can provide years of growth potential? Here's one heavily discounted…

Read more »

Growth from coins
Dividend Stocks

1 Grade A Dividend Stock Down 11% to Buy and Hold Forever 

If you're looking for the right dividend stock at the right price, you're going to want to consider this insurance…

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Are you looking for dividend stocks to buy right now? Here are two top picks!

Read more »

edit Taxes CRA
Dividend Stocks

Tax Time: How to Keep More of Your Money

Nearly everyone hates paying taxes, although Canadians can lessen the financial pain with the right tax strategies.

Read more »