The stock market can turn regular investors into self-made millionaires. It won’t happen overnight, although you must make sound decisions today to hit your financial goals in the future. Beginners can start with small investments and build wealth over time.
A market pullback in 2021 is possible given the present threats, particularly the resurgence of COVID cases. If the TSX retreats, it will open buying opportunities. You can scoop established income stocks at reasonable, if not lower-than-usual prices. Dividend payers like North West Company (TSX: NWC) and Fiera Capital (TSX: FSZ) can help you achieve millionaire status in due course.
Niche and dividend play
North West Company is excellent for long-term investors. This $1.78 billion company is a leading retailer in hard-to-reach regions. It caters to the underserved communities in northern and western Canada. The operations likewise extend to rural Alaska, the Caribbean, and the South Pacific islands.
The total return of the consumer-defensive stock over the last 20 years is 6,866.92% (23.61% CAGR). If you were to invest today, the share price is $36.53, while the dividend yield is 3.94%. A $200,000 investment will compound to $525.530.56 in 25 years, including reinvestment of dividends.
Food sales comprise 75% of total revenues, and the balance of 25% comes from general merchandise and others. The products and services are wide-ranging, including food, appliances, housewares, postal, and even income tax preparations. Currently, the leading retailer to rural and remote communities has stores in strategic locations.
North West’s cash flows should be stable and resilient for years. It derives more than 90% of its annual revenue from people’s everyday needs. There’s hardly competition too.
Investment management science
The shares of Fiera Capital trade at a 3.23% discount. However, at only $10.12 per share, the dividend offer is an ultra-high 8.43%. A $100,000 position today will swell to $504,608.70 in 20 years. The $1.05 billion independent asset management firm has a dividend-growth clip of over 13% in the last decade.
Clients across asset types and geographies converge at Fiera’s integrated platform. The company offers diversified investment strategies to institutional, financial intermediaries, and private wealth customers. The services are available in North America, Europe, and key markets in Asia, although the chunk of revenues (80%) come from the U.S. and Canada.
The Canadian firm aligns its multiple investment strategies with the evolving landscape. Its recurring and predictable fees prove the global operating model works. Most of the business dealings are subject to contractual agreements.
Fiera Capital ended year-end 2020 with approximately $180.2 billion in asset under management. The key takeaway is that it’s one of the select few independent investment firms that provide extensive expertise in active and structured fixed income. The team also invests in Canadian and foreign equity and offers non-traditional investment solutions.
Irrational market
Canada’s primary stock market is holding up well, despite the persistent threats of the global pandemic. The TSX is close to topping the 19,000 threshold after finishing a record 18,990.30 on April 1, 2021. Some market observers believe global stock markets are in a bubble. Should the index display irrational behaviour or correct soon, you know what cheap dividend stocks to buy.
