There are a lot of different investment strategies that people employ to create their portfolios and, by extension, their wealth. Some rely heavily on growth stocks, while some stick with the stability of blue-chip dividend stocks. No matter what kind of investor you are, if you aim to build a well-balanced portfolio, it can benefit from the presence of Dividend Aristocrats.
Dividend-dependent portfolios and wealth-building strategies, especially ones that employ DRIP, capitalize on the power of compounding. That requires giving your investments ample time to grow. But if you are building an investment portfolio to start a passive-income stream, you have to look for higher yield, which is relatively hard to come by if you are shopping exclusively among Aristocrats.
But the current market crash has changed that.
A printing and media company
Transcontinental (TSX:TCL.A) is an 18-year-old Dividend Aristocrat. The company increased its dividends, even through the last recession, and it’s still on the growth spurt. The company is considered the country’s largest printing company, and it’s also one of the largest flexible packaging companies in North America.
Currently, the company is trading at 28% down from its pre-crash value at a price of $12.25 per share. The slump in the market price has pumped the yield up, and it’s now at a very lucrative 7.29%. If you allocate $20,000 from your TFSA to invest in this Aristocrat, you can expect over $120 a month in passive income. It increased its payouts by 21% in the past five years.
An international tape company
Intertape Polymer (TSX:ITP) is considered one of the global leaders in a niche product (i.e., tape). The company has operations in 22 manufacturing facilities in North America, four in India, and one in Germany. The product portfolio includes water-activated and pressure-sensitive tapes in addition to conventional products. The company has a market capitalization of $584 million.
Intertape increased its payouts for seven consecutive years, earning the title of an Aristocrat. The company is currently offering a mouthwatering yield of 8.27% at a highly discounted price of $9.9 per share. $20,000 in this company will earn you about $138 a month in passive income.
A bank that’s not in the Big Five
Laurentian Bank (TSX:LB) is one of the oldest Aristocrats in the financial sector. It increased its payouts for 12 consecutive years. The share price stayed relatively flat for the whole of 2019 and almost through the first quarter of 2020. But right now, the bank is trading at a 10-year low price of $29.4 per share.
The yield it’s offering right now is monstrous, especially for a Dividend Aristocrat. At 8.9%, you stand at a chance of earning almost $150 a month with a $20,000 investment in this bank.
For value investors and dividend lovers, now is the best time to load up their portfolios with amazing stocks. Everything is at a bargain price right now. If you can lock up the current high yields of a few Aristocrats, your payouts are likely to grow in the future, inflating your passive income.
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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends TRANSCONTINENTAL INC A.