Add an Easy $1,050 to Your 2020 (That the CRA Can’t Touch) — Here’s How

This group of dividend-growth streakers, including BCE (TSX:BCE)(NYSE:BCE), can help build your wealth in 2020.

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Happy New Year, 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 $30K TFSA account, the group will provide you with a growing tax-free income stream of $1,050.

So, if you’re looking to add a big of chunk of income to your 2020 (that the CRA can’t touch), this is a good place to start.

Ringing in 2020

Leading off our list is telecom giant BCE, which has grown its dividend by 5% or better for 11 consecutive years.

BCE continues to use its massive scale, trusted brand name, and highly regulated operating environment to deliver the goods to shareholders. In the most recent quarter, earnings improved 6% to $922 million, while operating cash flows increased 10.5% to $2.26 billion.

Looking ahead, management still sees full-year 2019 EPS of $3.48-$3.58 and revenue growth of 1-3%.

“With exceptional execution by the Bell team in Q3, we achieved industry-leading subscriber growth — including record Q3 net wireless customer additions — improved customer satisfaction and a strong financial performance,” said CEO George Cope.

BCE shares currently offer a juicy dividend yield of 5.2%.

Cheers to that

With seven straight years of dividend growth, wine products specialist Andrew Peller is next on our list.

Peller’s roster of premium brands (including Peller Estates, Trius, Hillebrand, and Thirty Bench), stable cash flows, shareholder-friendly management team make it a solid income play. Over the first six months of fiscal 2019, Peller generated operating cash flow of $21.2 million on sales of $198.6 million.

More importantly, Peller’s gross margin continues to steadily expand, suggesting that its competitive position is strengthening.

“We continue to see strong performance across the majority of our well-established trade channels, driven by the introduction of new products and entering new categories, as well as our emphasis on higher-margin products,” said CEO John Peller.

Peller shares sport a decent dividend yield of 1.8%.

Electric situation

Rounding out our list is electric and gas utility Fortis (TSX:FTS)(NYSE:FTS), which has grown its dividend for a whopping 46 consecutive years.

Fortis continues to lean on its impressive network ($53 billion in assets serving over three million customers), stable fundamentals, and regulated operating environment to deliver steady income growth for shareholders. In the most recent quarter, adjusted earnings improved to $287 million as revenue increased slightly.

More importantly, management continues to target 6% annual dividend growth through 2024.

“We are optimistic about the trends occurring in our industry, including the move to cleaner energy and electrification,” said President and CEO Barry Perry. “Our focus on these areas along with our efforts to strengthen our energy networks is driving growth in our business as reflected in our new five-year $18.3 billion capital plan released in the third quarter.”

Fortis currently offers a healthy yield of 3.5%.

The bottom line

There you have it, Fools: three top dividend-growth stocks for 2020.

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.   

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