3 Dividend Aristocrats to Buy and Hold for 20 Years

Long-term investors want nothing more than a band of dividend-payers in their portfolios. However, you might need to sell some…

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Long-term investors want nothing more than a band of dividend-payers in their portfolios. However, you might need to sell some and buy replacements from time to time. You can simplify and minimize the effort by investing in only three Dividend Aristocrats. Buy them today and stay put for 20 years.  

High-flying large-cap stock

Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ) deserves serious consideration because not only does it boast a dividend growth streak of 20 years, but it yields a decent 3.49%. Performance-wise, it has delivered 26,202.79% (13.03% compound annual growth rate) total return in the last 45.5 years. This energy stock also outperforms the broader market in 2021. At $52.58 per share, the year-to-date gain is an impressive 77.67%.

The $50.29 billion company is an independent crude oil and natural gas producer. It offers light & medium crude oil, synthetic crude oil, primary heavy crude oil, and thermal oil (bitumen). As with most industry players, 2021 is a breakout year. In the first half of the year, product sales grew 86.2% to $14.14 billion versus the same period in 2020.

From a net loss of $1.59 billion, management reported net earnings of $2.92 billion. Moreover, the company generated $5.47 billion from operating activities. In the six months ended June 30, 2020, it was only $1.37 billion. The energy stock carries a buy rating from market analysts who forecast a climb to between $60 and $70 in 12 months.

More than a century of dividend payments

Imperial Oil (TSX:IMO) is a well-loved income stock even if the dividend yield is a modest 2.49%. The attraction or charm of this energy stock is the 140 years of dividend track record. It earned Dividend Aristocrat status for the 26 consecutive years of dividend increases.

Like CNQ, IMO is a high-flyer in 2021 with its 76.37% year-to-date gain. At $41.66 per share, the trailing one-year price return is 123.38%. The $29.52 billion integrated oil company is a subsidiary of ExxonMobil, the American oil giant. It’s older than most Canadian oil majors, and it commenced operations in 1880 when the country was only 13 years old.

The business is back on track after the global pandemic crushed it. IMO’s net income was $1.66 billion after three quarters in 2021 versus the $711 million net loss in the same period in 2020. The rebound was 2,377%. The thing to look forward to is the IMO’s Strathcona Project, which will produce around 20,000 barrels of renewable diesel daily by 2024.

A Top-Performing Big Bank

The 11-year dividend growth streak of the National Bank of Canada (TSX:NA) isn’t as extensive as that of Canadian Natural Resources and Imperial. However, the $35.21 billion lender is a Canadian Big Bank and belongs in an industry many describe as a bedrock of stability.

Believe it or not, but National Bank outperforms its bigger counterparts on the TSX in 2021. It’s the top performer with a 49.01% year-to-date gain. The Canadian Imperial Bank of Commerce is the next-best bank (+44.55%). The share price is $104.32, while the dividend yield is 2.74% if you invest today. NA’s total return in the last 41.71 years is 12,460.96% (12.29% compound annual growth rate).

Forget and reap

Certainly, 20 years is enough time to build a large nest egg for retirement. You can purchase the three Dividend Aristocrats today to form your income portfolio. Forget about it and reap the rewards in 2041.

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.

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