Investing in a portfolio of solid dividend-paying stocks can help you achieve significant income in your account balance by letting your money do the work for you. If you can find the right companies, you can become a wealthy investor without needing a high initial investment capital. All you need is the right stocks and discipline to remain invested.
I will discuss Fortis (TSX:FTS)(NYSE:FTS) and Telus (TSX:T)(NYSE:TU). The two companies can be excellent foundations for a dividend-income portfolio that you can hold onto for decades to retire wealthy.
Fortis is always going to be one of my favourite Canadian stocks. It is a safe and reliable stock that you can hold forever in any type of portfolio. It is a reputable name in Canada, and it is one of the most reliable investments you can make on the TSX. The company generates a highly predictable revenue due to the regulated nature of the market.
It provides utilities to its customers throughout the country. The essential nature of its business means that Fortis can continue generating revenue regardless of the state of the economy. No matter how many expenses people need to cut down on, they will need their electricity and natural gas supply running. Fortis can make a virtually guaranteed income that it can use to finance its increasing dividends.
Fortis is also a Canadian Dividend Aristocrat with a 47-year dividend-growth streak. It is one of the top Canadian Dividend Aristocrats that does not show any signs that it will break its healthy streak. Fortis is trading for $54.51 per share at writing, and it has a decent 3.71% dividend yield that you can lock in right now.
Telus is not a company operating in the utility sector. However, it does provide an essential service that we cannot imagine living without. Telecom is an essential sector, as it allows people to communicate with each other and stay updated on everything that is happening around the world. Canadian telecoms might not be the most exciting growth prospects. Still, Telus is a reliable stock that can provide you with stable returns through its dividends.
Telus has also increased its dividends over the last few years. Telus might not have a 47-year streak like Fortis, but it has increased its dividends over the previous five years. The company has increased its dividend payouts by 39% in the previous five years. The stock is trading for $24.01 per share at writing. It pays at a juicy 4.85% dividend yield.
Telus can continue to benefit investors as the rollout of 5G across Canada can increase its income. The telecom sector will remain critical to Canada for a long time, and Telus is among the industry’s top operators.
Creating a successful dividend-income portfolio requires having a solid foundation. I think that both Fortis and Telus are excellent companies for providing a strong base for your investment portfolio. Fortis is a stable company with immense potential for providing you with reliable dividends. Telus also provides an essential service, and it has the potential for increasing your wealth through capital gains and dividends as the company grows.
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 FORTIS INC.