Investing regularly in top-quality TSX stocks, even with a small budget can help you accumulate a considerable amount of wealth over time. Notably, a $500/month investment in a low-risk and high-quality stock like Fortis (which has delivered an average annual total shareholder return of 13%) could help you accumulate $573,000 in 20 years.
So if you can spare $500 a month and plan to invest for the long-term, consider buying these fundamentally strong TSX stocks right now.
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Enbridge
Enbridge (TSX: ENB)(NYSE: ENB) has consistently delivered stellar total shareholder returns (TSR). Its average annual TSR stands at about 16% from 1995 to 2019, implying that an investment of $500 per month in Enbridge stock during that period would now be worth $1,685,670.
Looking ahead, Enbridge remains on track to handily deliver an annual TSR of over 13%. Currently, it is yielding about 7%. Meanwhile, the longevity and resiliency of its cash flows, strong balance sheet, utility-like business model, and low-risk growth pipeline suggest that Enbridge could continue to generate superior returns.
I expect Enbridge’s earnings and cash flows to benefit significantly from the recovery in mainline throughput and new assets placed into service. Furthermore, rate escalation and new customer additions in the gas distribution and storage business will likely drive future growth. Its $16 billion secured capital program backed by take-or-pay or cost of service commercial arrangements, growth opportunities in renewable power, and cost containment measures are likely to drive stellar growth in its earnings and cash flows and support higher dividend payments.
Algonquin Power & Utilities
Algonquin Power & Utilities (TSX: AQN)(NYSE: AQN) has consistently delivered stellar returns over the past several years. Meanwhile, it has uninterruptedly increased its dividends by a compound annual growth rate (CAGR) of 10% in the last 10 years.
The company owns a solid portfolio of regulated and contracted assets that deliver robust cash flows and fuel its growth. Notably, the average life of its long-term contracts is about 13 years, implying that Algonquin Power & Utilities could consistently increase its future dividends at a decent pace. Furthermore, its rate base and adjusted earnings are projected to grow by the double digits rate in the next five years.
I believe the company’s conservative business mix, stellar balance sheet, and strong earnings outlook make it a top growth and income stock. It projects 10% growth in its annual dividends for 2021 and offers a yield of 4%.
Goodfood Market
Shares of Goodfood Market (TSX: FOOD) have consistently delivered sky-high returns and outperformed the broader markets by a significant margin. The growing demand for online grocery services and Goodfood Market’s strong delivery capabilities continue to drive its active subscriber base, in turn, its stock.
Goodfood Market’s revenues are growing at a breakneck pace, and momentum is likely to sustain on the back of favourable industry trends and its investments in growth initiatives. Its growing footprint, expansion of product offerings, fast delivery, and targeted marketing are expected to drive order frequency and basket size.
Meanwhile, lower shipping and packaging unit costs and favourable agreements with suppliers are likely to cushion its margins and support the uptrend in Goodfood Market stock.
