Canada Stock Market Investors: 2 Profitable Dividend Payers

Canadians should find companies with strong revenue growth and solid dividend histories like Aecon Group Inc (TSX:ARE) to add to their stock market positions.

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Editor’s Note: The original version of this article stated that Airboss’ revenue for the first three quarters of 2019 was $318.85 million. That was, in fact, its Trailing Twelve Month revenue. It’s year-to-date revenue for 2019 has been updated to $242.4 million.


Canadians maintain around 80% of their savings in low-yield cash rather than profitable, dividend stocks. For most investors, the stock market seems too risky to dip their savings.

The majority of these Canadians could earn higher returns in their Tax-Free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs) with only 15 minutes per day devoted to stock market research.

It isn’t difficult for most educated Canadians to learn how to tell whether a company is profitable. Companies publish that information in press releases and mandatory reports filed with the Canadian Securities Administrators. Moreover, many websites like also have this information available for free.

Most Canadians interested in building a robust retirement portfolio will want to purchase dividend stocks with stable price histories. Finding safe, dividend payers for a long-term investment is easier than you think!

In 25 years, when you retire, you’ll be happy that you spent a little extra time researching dependable stocks for your retirement portfolio.

In Canada, the materials and capital goods market is running strong, unlike many of the oil and natural gas companies. Aecon Group Inc (TSX:ARE) and Airboss of America Corp (TSX:BOS) are two undervalued materials stocks with growing earnings.

Dividend track records drive shareholder loyalty

Aecon Group develops construction and infrastructure for private and public sector projects throughout North America. It may not be the most fashionable of industries, but that’s also a reason why the stock is undervalued. Many of the best stocks to buy are in industries overshadowed by technology and cannabis stocks.

Last year, Canada’s building industry picked up on the Toronto Stock Exchange. Aecon Group’s stock price performed well on the TSX, maintaining the previous five-year gain of around 72%.

It’s no wonder that the stock did so well given the reliable dividend yield of 3.3% at the current market value of $17.80 at the time of writing.

Aecon Group has treated shareholders fairly in the company’s dividend payouts. The quarterly dividend issuance remained stable at around $0.05 per share during the 2007 financial crisis.

Stable dividend payments in difficult economic times is a critical indication of investment quality.

In 2012, the company began declaring growing dividends. As of the most recent dividend issuance in September, PFB returned to shareholders $0.145 per share for the quarter. Canadian savers should note the quick reaction to begin growing dividends once again during the economic recovery.

Revenue growth crucial for stock price performance

Airboss of America Corp manufactures rubber materials for the military, automotive companies, and industrial markets in North America.

The company is profitable with high projected revenue growth, meaning that the stock price should perform well next year. Experienced investors like to see revenue growth from companies, as it indicates that management is strategizing ways to gain market share.

Shareholders like to see revenue growth along with high margins. Airboss reported revenue of $316.60 million for the year 2018, up from $267.63 million in 2016.

For the first three quarters of 2019, Airboss has announced revenue up to $$242.4 million for this year, already exceeding last year’s results. In a few months, shareholders can expect the company to announce up to $400 million in annual revenue.

Revenue growth means that the annual shareholder’s conference for the year ended December 2019 should bring in additional stock market volume and increased attention from analysts. The added trading volume and focus will likely boost the market value of the stock.

Airboss would be a great stock to add to your TFSA or RRSP. Not only can you feel confident in stable price performance, but the dividend yield is also a decent 3.5% of the current $8 share price.

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 Debra Ray has no position in any of the stocks mentioned.

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