When you are looking to get in shape, most trainers will tell you that you first should strengthen your core. Your core is the source of your strength. Without a strong core, you will be vulnerable to all sorts of crippling injuries.
Strengthening the financial core of your portfolio is equally important. The base of your portfolio should be full of strong, dividend-producing companies that you can hold onto through both good and bad times. A portfolio with these stocks will give you the income you need to buy stocks when prices are reasonable and will protect your wealth by growing slowly over time.
If you are looking to pump some cash into your portfolio with these core stocks, Canada is a great place to be. This article will give you three core holdings you can buy to strengthen your financial core.
Oil investing has been a bit of a downer lately, but the oil pipelines are still pumping out dividends year after year. One of the best holdings in this space is Pembina Pipeline. Based in western Canada, Pembina is the toll road for oil. The company’s income comes primarily from long-term, pay-for-service contracts that are locked in for years at a time. Pipelines are difficult to build, so these should be in high demand for years.
Pembina offers investors a dividend of 5.12% at the time of this writing, a nice sum for income-hungry individuals. The dividend has gone up regularly for years. This year, Pembina once again increased its payout by 5.3%. That level of increases will give you inflation-beating returns for years to come.
Another core holding is Telus (TSX:T)(NYSE:TU), one of Canada’s main telecom companies. This company serves communities across the country. As we all know, demand for wireless services is increasing, not decreasing, as time goes on. We all love our cell phones and smart homes, meaning there will be a lot of wireless demand coming in the years to come.
Now that people are embedding IoT technology in their homes, wireless demand is even more sticky than it was a few years ago. Subscriber growth was up 33% in the second quarter of 2019 year over year, which is encouraging.
The stock currently yields about 4.76%, not bad for one of the most secure stocks in Canada. This yield has grown consistently for years, with the last increase coming in at 3.5%. The company is targeting annual dividend growth of 10% until at least 2022.
The final stock on the list comes from one of the best-run companies in Canada. Brookfield Property Partners gives investors the opportunity to invest in residential, commercial, and industrial properties on a global scale.
The yield on this stock sits at a jaw-dropping nearly 7% payout. Brookfield has stated that it intends to raise the payout on this company by 5% each and every year, once again giving investors inflation-beating power in their income portfolios.
Work that core
These three stocks will give you the income you will need through good and challenging investment times. Buy these three stocks to give you a combination of yield, dividend growth, and stability so that your portfolio won’t collapse as you continue to build wealth for years to come.
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Fool contributor Kris Knutson owns shares of Brookfield Property Partners LP, PEMBINA PIPELINE CORPORATION and TELUS CORPORATION. The Motley Fool recommends Brookfield Property Partners LP and PEMBINA PIPELINE CORPORATION.