Do you want peace of mind and to not worry about a bear market ever? Buy three Dividend Aristocrats this month and hold them for life.
A rare feat in 2022?
Canadian Utilities (TSX:CU) is close to achieving a rare feat in 2022. It could become TSX’s first Dividend King — a stock with a 50-year dividend-growth streak. As of September 2021, the utility stock has increased its dividends for 49 years. The $9.55 billion infrastructure company belongs to the ATCO group and operates globally.
The core business is utility assets that consist of electricity transmission & distribution, natural gas transmission & distribution, and international electricity operations. Canadian Utilities also engages in energy infrastructure that includes electricity generation, energy storage, and industrial water solutions. The third segment is retail energy for electricity and natural gas retail sales.
The highly contracted and regulated earnings base is why cash flows are stable and predictable. Hence, Canadian Utilities grows its dividends in tandem with earnings growth. Expect rock-steady dividends but not so much in capital gains. The share price is $35.15, while the dividend yield is 5% if you invest today.
Enbridge (TSX:ENB)(NYSE:ENB) considers its five operating segments as best-in-class franchises. Business segments like the liquids pipelines, gas transmission & midstream, and gas distribution & storage contribute significantly to revenues. Its renewable power generation segment has an 1,800 MW capacity and is growing.
The business of Enbridge is enduring and critical to North America. Its pipeline network transports 25% of the region’s oil needs. The gas transmission business is transporting 20% of America’s natural gas consumption. Its natural gas distribution segment is the largest utility in terms of volume.
The top-tier energy stock isn’t a high flyer, despite the sector’s red-hot performance in 2021. However, Enbridge outperforms the TSX with its 30.98% year-to-date gain. Moreover, at $49.79 per share, you can partake of the generous 6.71% dividend.
Expect growing dividends if you own Enbridge shares. The $102.64 billion energy infrastructure company has raised its dividends for 26 straight calendar years. Your capital should compound faster if you reinvest the quarterly dividends.
Multiple growth drivers
Telus (TSX:T)(NYSE:TU) is the hands-down choice if you want to own a 5G stock. Besides the core telecommunications business, it has three more growth drivers in Telus International, Telus Health, and Telus Agriculture. The $39.95 billion is a Dividend Aristocrat owing to 18 consecutive years of dividend increases.
Expect Canada’s second-largest telco to deliver increasing profits as the years roll on. In Q3 2021, year-over-year revenue growth was 30% due to solid organic growth plus contributions from strategic acquisitions. Because of the strong, sustained performance, management hopes to end 2021 with robust double-digit growth.
Performance-wise, telco stock is stable, if not resilient, throughout the pandemic environment. At $29.36 per share, Telus is up 20.45% year to date. The dividend yield is a juicy 4.46%. In 2019 or before the pandemic, management announced the plan to increase dividends by 7-10% annually through year-end 2022.
Regarding the return potential, market analysts project the price to appreciate between 7.1% (average) and 22.6% (maximum) in 12 months. Your overall return should be higher if you include the dividend.
Forget the market noise
Passive income for life is possible with only three Dividend Aristocrats. Take positions in them today and forget the market noise.