Making a million dollars seems like a challenging prospect, but through the right investments and with time on your side, growing a million dollars is certainly very possible. If the growth is dependable and consistent, the more time you give your investments, the higher your chances of making millions.
A communication company
Quebecor (TSX:QBR.B) is a media and communication company based in Quebec. It has been around long enough to be considered part of the heritage of the province. Its business can be broken down into three major avenues: telecom, media, and sports and entertainment. These business sections are further divided into subsidiaries like Videotron and TVA Group.
The company recently joined the rest of the Dividend Aristocrats by growing its dividends over 10 times in the past five years. The yield is a modest 2.78%, and the payout is safely at 24.2%. While its dividend-growth rate might also entice investors, a better reason to choose it might be its consistent growth over the past decade. The company’s 10-year CAGR comes out to about 13.75%.
So, if you use only a fraction of your fully stocked TFSA or adequately stocked RRSP, e.g, $20,000, to invest in Quebecor, and it keeps growing at 13.75% per year, you would be sitting at $263,000 in 20 years.
A waste management company
Waste management is one of the least recognized “essential services.” But it’s an ever-present and ever-growing business. As evident by the growth of North America’s third-largest waste management company Waste Connections. This $23.73 billion market cap company primarily operates in Canada and the U.S.
It’s also an Aristocrat with a decade of increasing dividends under its belt and a very non-flattering yield of 0.81%. But its dividend-growth rate is decent enough. The payouts have grown by 91% in the past five years. The stock is still trading 7% below its pre-crash value, but it has shown relatively swift recovery compared to others. Its 10-year CAGR is at 16.5%.
That means with $20,000 in this company growing at such an amazing rate, your capital gains will be about $424,000 in 20 years.
An equipment and refrigeration company
Completing the trio is another Aristocrat, significantly older than the others, with three decades of consistent dividend growth. Toromont Industries has two major segments: heavy-duty equipment and refrigeration. And despite the nature of its business, Toromont hasn’t got as much debt on its books as you might expect — only about $766 million.
The company is still trading at about 12% down from its start-of-the-year value, making it a bargain. Its consistent growth over the decade has resulted in a 16% CAGR, capable of turning $20,000 investment into $389,000.
With $60,000 invested in these three companies, provided that they keep growing at the same or better rate every year, you will be able to earn $1,076,000 in 20 years. This seems like a decent enough sum and a sizeable nest egg for a comfy retirement. But if you can defer breaking your nest egg for just one more decade, in 30 years, the investments can grow well over $4.6 million.
Time and great companies together have the potential to make you millions. The rest of it is up to your risk appetite. With safer stocks, the growth might be a bit slower. With aggressively growing stocks, your chances of reaching millions before 20 years will get higher. With a well-diversified portfolio, you can mitigate your risks and maximize growth in a reasonable ratio.
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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 Adam Othman has no position in any of the stocks mentioned.