Companies with multi-decade dividend streaks show the capability in rewarding investors with dividends for an indefinite period. It’s the ideal investment if you’re growing your retirement savings or building a multi-million nest egg. The firms that have these excellent track records are known as Dividend Aristocrats.
ATCO (TSX:ACO.X) and Canadian Western (TSX:CWB) are flying under the radar, but both are Dividend Aristocrats with multi-decade streaks. If you’re preparing a portfolio of purely income stocks for 2020, you should consider the pair.
One-stop solutions provider
ATCO is a $5.78 billion company that offer comprehensive, sustainable solutions. The diverse products and services that the company provides in industries such as agriculture, energy, housing, real estate, transportation, and water are fundamental to global growth.
This age-old company is a one-stop solutions provider of big and small challenges facing global customers. The scope and scale of ATCO’s operations are global. It delivers electricity and natural gas to communities throughout Alberta and northern Canada.
In Chile, the company manufactures workforce housing facilities for the mining industry. ATCO also develops highly efficient natural gas-fired power plants in the continent of Australia. Experience-wise, it has a 70-year history and works in more than 100 countries worldwide.
This year, ATCO expects revenue to top $5 billion, with a corresponding net income of $565 million. The 3.21% yield is decent for a utility stock that can protect your capital and sustain dividend payouts.
Standout regional bank
Edmonton-based Canadian Western provides specialized financial services through its business banking, personal banking, and wealth management divisions. The $3.1 billion regional bank started with a single branch in 1984 before transforming into a diversified financial services organization as it is today.
While Canadian Western is a dwarf in comparison to the Big Five banks in Canada, it has found the road to success. Over the last three years, revenue has increased by an average of 10%, while net income grew by 16.4% on the average.
Based on the current run rate, revenue and income growth will taper to 5.7% and 7%, respectively. It does not mean, however, that Canadian Western is losing ground.
Just like ATCO, the compelling reason to include this bank stock in your portfolio is investment protection and dividend safety. The 3.15% dividend isn’t high, but the peace of mind it offers is unquantifiable.
Tale of the tape
There’s no reason to doubt the viability of ATCO and Canadian Western as long-term investment options. You simply have to look at the history of dividend payments.
ATCO has a dividend-growth streak of 25 years. In terms of dividend growth, it has grown by 14.97% in the last five years and 7.5% in one year. The dividend-growth streak of Canadian Western is 27 years, with a dividend-growth rate of 7.21% and 8.5% over five years and one year, respectively.
Both companies haven’t missed a payout for such a long time. Also, the prospects of dividend growth are present, while the possibility of a dividend cut is a non-issue. Only your budget will dictate which Dividend Aristocrat you will pick. Both are endearing stocks that you can hold for decades.
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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 Christopher Liew has no position in any of the stocks mentioned.