Income investors: right now is a great time to be an investor. Yes, bond yields are increasing of late. However, the yields some top TSX equities are providing right now are extremely attractive.
These three top picks are for those seeking reliable income growth over time, along with great long-term capital appreciation potential. I would highly recommend income investors consider these three stocks right now, in this current economic environment.
A staple for any income portfolio has to be Fortis Inc. (TSX:FTS)(NYSE:FTS). Fortis provides investors with a healthy 4.1% dividend yield, which in and of itself is excellent given the yield fixed income investors are offered right now.
Additionally, this utilities player has one of the best dividend growth track records on the TSX. Fortis is not only a Dividend Aristocrat, but is also among the best-in-class for dividend growth over time. Fortis hasn’t missed an annual dividend increase for nearly five decades. Investors looking for growing income in retirement can’t go wrong owning this name now, or ever.
Another one of my top picks in the energy/utilities space is Algonquin Power & Utilities Corp. (TSX:AQN)(NYSE:AQN). This utilities player dishes out a handsome 4% yield, and is among the best growth plays in the utilities space, in my view.
The growth potential of Algonquin is directly related to the company’s renewable energy portfolio. Specifically, the attention renewable energy players such as Algonquin have received as a result of the Biden Administration’s environmental plan is likely to be a huge catalyst for companies like Algonquin. I see capital inflows into this sector exploding in the years to come. Accordingly, Algonquin stands to benefit as one of the best integrated renewables players on the TSX.
Algonquin’s renewables exposure enhances the overall return of the company’s core regulated utilities business. Algonquin’s cash flow stability and growth potential should allow for double-digit long-term total returns for investors over time.
Currently, shares of Restaurant Brands International (TSX:QSR)(NYSE:QSR) provide investors with a yield of 3.5%.
This yield lags the other top two picks. However, Restaurant Brands has proven itself to be one of the most defensive growth stocks on the TSX since its listing in 2014. In recent years, shares have traded sideways. That said, coming out of this pandemic, Restaurant Brands could really take off as pandemic-related restrictions are loosened.
Restaurant Brands is poised to continue opening new locations in growth markets such as China in years to come. Additionally, I expect to see same-store sales improve dramatically in the coming quarters, if we see vaccination efficacy remain high. There’s a lot to like about this income and growth play right now.