Happy Thanksgiving, Canadian investors! While enjoying hearty meals, let’s be thankful for what we have. I’m grateful to be the owner of quality Canadian stocks, including Royal Bank of Canada (TSX: RY)(NYSE: RY), Brookfield Infrastructure Partners (TSX: BIP.UN)(NYSE: BIP), and Canadian Pacific Railway (TSX: CP)(NYSE: CP).
Royal Bank of Canada
I’m thankful that I had the opportunity to buy some RBC shares during the pandemic market crash. Despite not grabbing the shares at the lowest point, I still managed to lock in a nice yield of close to 4.6%. And the shares have appreciated by more than 35%.
There isn’t any more I could ask for from the big Canadian bank stock. It gives me peace of mind from holding it because of its stability. It’s the kind of quality business that can quickly recover its earnings after a down year. Therefore, RBC has been able to pay a solidly safe dividend for decades. Its 10-year dividend-growth rate is about 8%.
Currently, Royal Bank stock is fairly valued and offers a yield of about 3.4%. So, it’s a hold at the moment.
Brookfield Infrastructure
From the bottom of my heart, I’m grateful that Brookfield Infrastructure is one of my oldest stock holdings. Not once did I doubt about the business. Because of my high conviction in the dividend stock, I was able to add shares whenever it tanked.
Brookfield Infrastructure has increased its cash distribution year in year out since it was spun off from Brookfield Asset Management about 12 years ago. Specifically, in that period, it increased its cash distribution at a compound annual growth rate of approximately 10%.
The global infrastructure company has grown at an above-average pace, because it enjoys multiple competitive advantages. For example, it is a value investor who isn’t shy to sell mature assets to recycle the capital for higher returns elsewhere. It has the capability to invest globally for the best opportunities. Just in the last year, it sold three assets for proceeds of about $2 billion, equating to a weighted average rate of return of approximately 33%. In another perspective, BIP got total returns of approximately 390% from these investments.
The dividend stock trades at a slight discount today. So, interested investors can consider buying some shares. BIP currently offers a yield of roughly 3.6%. Furthermore, management is inclined to increase the cash distribution by 5-9% per year to continue attracting long-term investors.
Canadian Pacific Railway
The market has my gratitude. Thanks to the correction in CP stock recently, I was able to add it, as one of the newest holdings, to my diversified portfolio. The railroad stock is an essential business that transports goods, such as grain, fertilizer and potash, food, forest products, automotive, industrial products, and energy across Canada and the United States. CP is acquiring Kansas City Southern, which could make it more competitive with the expanded geographical reach to Mexico.
The railroad stock has historically expanded at a double-digit rate. Its 10-year dividend-growth rate is approximately 13%. Going forward, it can potentially grow by about 9% per year. The stock’s dip puts CP at a discount for investors interested in buying some shares today.
Food for thought
This Thanksgiving, which stocks are you grateful to have in your stock portfolio? They might be the candidates that can provide secure returns for the long haul!
