2 Dividend Stocks That Also Offer Capital Gains

Are you looking for dividend stocks that also offer wealth growth through capital gains? Here are two top picks to consider.

| More on:
Canadian Dollars

Image source: Getty Images

Stock market investing presents plenty of opportunities for investors to grow their wealth and enjoy success. You can take several possible approaches while investing to achieve your long- and short-term financial goals. Dividend investing is an excellent method for investors to enjoy long-term wealth growth or to supplement their primary revenue stream with some passive income.

Many Canadian investors believe that investing in dividend stocks means sacrificing growth potential through capital gains in their investment portfolios. It is true that many dividend-paying stocks do not offer plenty of exciting growth through capital gains. However, there are many dividend stocks that can outperform broader markets.

Today, I will discuss two dividend stocks that could provide you with a passive-income stream without sacrificing growth.

Brookfield Asset Management

Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) is an excellent stock to consider if you are looking for equity securities that offer shareholder dividends without compromising on growth. Brookfield is a massive $113.65 billion market capitalization alternative investment management company. With over US$600 billion of assets under management, its portfolio provides the company with heavily diversified exposure to a wide range of industries.

The stock might not offer the most exciting growth all the time, but it has its moments that lead to higher profit margins, and it can outperform the broader market. Brookfield has recently entered a partnership with Tesla to create a large-scale and sustainable neighborhood in the United States. Provided that it’s successful, the project could provide a significant boost to the stock.

At writing, Brookfield Asset Management stock is trading for $72.46 per share, and it boasts a low but reliable 0.91% dividend yield.

goeasy

goeasy (TSX:GSY) is a slightly riskier proposition for dividend-seeking investors who do not want to compromise on growth. The $2.78 billion market capitalization alternative financial company based in Mississauga operates three business units to derive its revenues. goeasy offers high-interest loans to subprime borrowers through its businesses, providing an essential service to consumers who cannot qualify for loans from traditional lenders.

The company’s revenues spiked during the pandemic due to the nature of its business. Despite its rapid growth in recent years, the company has maintained its track record for paying rising shareholder dividends. It has increased its dividend payouts for the last six years, and its payouts have grown six-fold in that time.

At writing, goeasy stock is trading for $167.90 per share, and it boasts a 1.57% dividend yield.

Foolish takeaway

Reinvesting the shareholder dividends that you receive from dividend stocks to purchase more shares in the company can help you unlock the power of compounding to accelerate your long-term wealth growth. Combined with the potential for significant long-term upside, the right dividend stocks could help you become a far wealthier investor in the long run.

Brookfield Asset Management stock and goeasy stock do not offer very high dividend yields, but the two companies have a great track record for consistent payouts to their investors. Between reliable shareholder dividends and growth potential, these two stocks could be excellent additions to your investment portfolio.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Asset Management Inc. CL.A LV and Tesla.

More on Dividend Stocks

A close up image of Canadian $20 Dollar bills
Dividend Stocks

Passive Income: How to Make $106 Per Month Tax Free

Holding quality, high-yield dividend stocks such as Freehold Royalties in a TFSA can help you earn tax-free income for life.

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How to Earn a TFSA Paycheque Every Month and Pay No Taxes on it

Stocks like First National Financial (TSX:FN) pay you monthly. You can also earn monthly dividends through portfolio diversification.

Read more »

stock analysis
Dividend Stocks

1 Dividend Superstar I’d Buy Over TD Bank Stock

TD (TSX:TD) stock may look undervalued, but there are reasons for the price drop. Meanwhile, this dividend superstar has more…

Read more »

A steel grain silo storage tank with solar panel in a yellow canola field in bloom in Alberta, Canada.
Dividend Stocks

Down by 26.77%: Now Might Be the Perfect Time to Buy Nutrien Stock

This TSX stock has seen share prices fall by over 26% from its 52-week highs, but it might be the…

Read more »

Woman has an idea
Dividend Stocks

2 No-Brainer Stocks to Buy Now With $7,000

Two relatively cheap cash cows are no-brainer buys for investors with $7,000 to invest.

Read more »

dividends grow over time
Dividend Stocks

Buy This High-Yield Dividend Stock in July 2024

Buy this high-yielding dividend stock to lock in inflated yield into your portfolio to generate solid passive income for years.

Read more »

Double exposure of a businessman and stairs - Business Success Concept
Dividend Stocks

Where Will Dollarama Stock Be in 3 Years?

Dollarama stock has done incredibly well during economic uncertainty, but what about when the markets recover in the next three…

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

TFSA – 2 Canadian Stocks to Buy and Hold for Tax-Free Gains

Canadian stocks like Brookfield Corp (TSX:BN) can make wise TFSA holdings.

Read more »