COVID-19 brought financial hardships in 2020. The specter of financial dislocation in the future frightens many who don’t have retirement savings. Younger Canadians are fortunate, because there’s sufficient time to build a nest egg. Retirement planners advise creating a financial plan that will make your future as predictable as possible.
Dividend investing is a sure-fire way to ensure financial stability in retirement. Bank of Montreal (TSX:BMO)(NYSE:BMO), BCE (TSX:BCE)(NYSE:BCE), and Imperial Oil (TSX:IMO)(NYSE:IMO) are income generators. All three haven’t missed a dividend payment for more than 100 years. Start with $10,000 to buy these stocks to kickstart your journey to wealth.
Most investor friendly
Canada’s fourth-largest bank is the most investor-friendly TSX stock. BMO was the first company ever to pay dividends. It pioneered the practice of sharing a portion of profits with shareholders. The track record stands at 192 years today and counting. At $99.70 per share, the dividend yield is 3.41%.
BMO was established in 1817 and served as the country’s central bank for 118 years until the creation of the Bank of Canada in 1935. In 1998, BMO and Royal Bank of Canada, Canada’s largest lender, planned to merge to create a big bank that could fare better internationally. However, the federal government nixed the plan, because fewer banks wouldn’t be in the public’s best interest.
BMO, a $64.54 billion bank, is a matured company, yet it remains on the radars of growth investors. World Finance Magazine recently named BMO as the Best Private Bank and Best Commercial Bank in Canada for the 11th and seventh consecutive years, respectively.
BCE is Canada’s largest telecommunications and media company. The dividend track record of this industry titan is equally impressive. Its first dividend payment was in 1881, or one year after it was established. BCE hasn’t skipped a payout for 140 years.
Today, BCE’s market capitalization stands at $56.08 billion. The telco stock trades at $61.99 per share with a corresponding dividend yield of 5.06%. BCE’s expansion is non-stop, as it has spent around $4 billion yearly in the last 10 years for broadband network infrastructure. Expect BCE’s rollouts of its fibre, wireless home internet, and mobile 5G networks to accelerate over the next two years. The company will invest $1.7 billion for the endeavour.
Imperial Oil, a subsidiary of U.S. giant Exxon Mobil, pays the smallest dividend (2.5% dividend), but its dividend track record is as extensive as BCE’s. The $26.12 billion integrated energy producer has been around since 1880. Canada was only 13 years old as a country when 16 oil refiners in Ontario formed Imperial Oil. The company basically grew alongside the country.
The business of this key petroleum producer is enduring. Besides refining petrochemicals, Imperial Oil boasts coast-to-coast supply and retail networks and Esso-brand service stations. In Q1 2021 (quarter ended March 31, 2021), the company reported its highest quarterly earnings since Q3 2019 and the highest first quarter since 2018. Imperial Oil’s turnaround is at hand. Its current share price is $35.59 (+49.5% year to date).
Sound financial plan
If you have nothing stashed for retirement, start saving now. An initial $10,000 investment in reliable dividend payers and continuous accumulation of shares is a sound financial plan. It should result in substantial retirement savings in the future from a zero base today.
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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.