Here are two top Canadian dividend stocks you should invest in if you have an investment horizon of more than 10 years. It’ll give plenty of time for these growth-oriented dividend stocks to appreciate.
A core dividend stock to own
Don’t be fooled by Brookfield Asset Management’s (TSX:BAM.A)(NYSE:BAM) small yield of less than 1%. It is one of the best large-cap, core dividend stocks to own for the long haul. Last week, David Baskin gave the following comments on the growth stock.
“It’s the best company in Canada with the best managers. It manages tens of billions of dollars in limited-partnership agreements, and they get a piece of those profits. This is something that few realize. Any weakness like this is a buying opportunity. Their assets are long-lived with steady revenues over the long term.”
David Baskin, president of Baskin Wealth Management
BAM is a top-notch alternative asset manager with more than US$650 billion of assets under management across real estate, infrastructure, renewable power, private equity, and credit. It earns management fees as well as performance fees.
In September 2021, management highlighted the following:
“Our 20-year compound annualized return is ±20%. Going forward, we should be able to achieve the same performance. Growth in our new strategies could enable us to outperform that range. Our conservative balance sheet provides downside protection.”
Brookfield Asset Management Investor Day Presentation, Slide 5
The growth stock pays an increasing dividend. Its five-year dividend-growth rate is 8.4%. If you like Brookfield Asset Management, you should consider the following growth stock as well.
A growth stock to buy on market corrections
goeasy (TSX:GSY) has outperformed BAM in the last one, three, five, and 10 years. No growth stock moves upward all the time. This growth stock has been under correction since October 2021. Ryan Bushell was right on about waiting on the stock back in October on BNN.
“The stock is pulling back for good reason. COVID turned out positive for them, as government relief helped lower-income folks. The stockpiling of savings is starting to reverse. Interest rates could have an impact. Don’t get greedy despite the dip. Wait another couple of quarters.”
Ryan Bushell, president and portfolio manager at Newhaven Asset Management
It is a fabulous opportunity to ease into the alternative lender after the 30% correction from goeasy’s 52-week high. According to Yahoo Finance, eight analysts have a 12-month average price target that suggests the stock trades at a discount of 33% at under $153 per share.
However, there’s no need to rush into the growth stock, as it’s just reverting to its long-term normal valuation. In other words, the stock is fairly valued from a long-term perspective. It trades at a low P/E for its growth potential, though. Currently, it trades at a blended P/E of about 14.5 for a projected five-year earnings-per-share growth rate of 18%.
goeasy yields 1.7% today and has quadrupled its dividend over the last 15 years, which equates to growth of about 17% per year.
Be patient with these growth-oriented dividend stocks. Accumulate shares on dips at good valuations, and you should find your money growing at an above-average rate versus the market in the long run.
