2020 will be remembered for many things. Amid the pandemic, August 2020 was one of the best months for the stock market in recent history. September is historically one of the worst months for the stock market. However, September 2020 might give us a month to remember. With several stocks leading the charge for another bullish run, there are a few stocks that can make you super rich.
It is time to get your shopping shoes on for ideal stock market picks. Investing in the right companies right now could sign you up to become a wealthy investor in the future. To this end, I will discuss Constellation Software (TSX:CSU) and Enbridge (TSX:ENB)(NYSE:ENB).
The two companies give you a mixture of a growth stock that can build your wealth and a stock that can provide you with dividends to take care of living expenses.
The tech industry has shown remarkable resilience during the pandemic. Constellation is one of the organizations leading the charge with its diversified portfolio of 260 companies, 125,000 customer base, and access to over 100 niche markets worldwide.
Most of Constellation Software’s income comes from the public sector customers that are already resilient to the economic crisis. The company has made a diversified portfolio by buying small companies offering essential software for niche verticals. The companies it buys do not have much competition and offer high cash flows.
Constellation has a healthy 90% retention rate due to the mission-critical software it provides to businesses. At writing, CSU share prices are $1,505.77, and it has grown more than 167% in the last five years. It is a massive and low-risk growth stock that you can add to your portfolio.
The resilient energy company has been providing reliable dividend income to its investors each quarter. The owner and operator of one of the largest pipeline infrastructure in North America, Enbridge transports a quarter of all the crude oil produced on the continent. It also distributes a fifth of the natural gas consumed by the U.S.
The cash flow from its natural gas and crude oil transmission services provides a relatively stable cash flow. Energy demand has been volatile, and that has been rough on Enbridge. However, the company continues to use its cash to build more pipelines and generate more revenue. The company has paid its shareholders dividends for the last 25 years and increased it at a CAGR of 11%.
The pandemic took a toll on demand and decreased its earnings along with its share price. The stock is trading for $40.98 per share at writing, and it is down by almost 30% from its February 2020 high. The discounted share price means its distribution has a massive 7.91% dividend yield. The company recently increased its liquidity to continue building more pipelines and generating more revenue.
Suppose you have $4,000 that you can invest in each company. Both Enbridge and Constellation can earn you significant wealth through the investment.
If you’d invested $4,000 in September 2000, it would be worth almost $15,000 without dividends reinvested considering its growth in the last two decades.
A $4,000 investment in Constellation Software just 10 years ago would be worth more than $134,000 at writing due to its phenomenal growth.
The share prices for both companies are significantly higher now. However, Constellation still has the potential for further capital gains. Enbridge can continue paying reliable dividends with relatively slower growth. I think these companies could be valuable additions to your portfolio.
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Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Constellation Software and Enbridge.