Dividend income and long-term growth: new investors frequently set out to find both for their portfolios but are often forced to compromise one for the other. Fortunately, there are stocks on the market that can provide for investors seeking income and growth.
Here are some superb stocks to consider adding to your portfolio.
Toll-booth income and lucrative growth
Enbridge (TSX:ENB)(NYSE:ENB) is the first stock for investors seeking income and growth. Enbridge is the largest energy infrastructure company in North America, and for good reason, too. Enbridge’s massive pipeline network transports nearly a third of all crude in North America and one-fifth of the natural gas needs of the U.S.
Prospective investors should note that the use of the pipeline network is not charged by commodity prices. In other words, Enbridge generates a steady revenue stream irrespective of volatile oil prices.
That revenue stream is then augmented by other segments of the business, such as its utility and renewable energy businesses. The renewable energy segment should appeal to growth-minded investors.
Enbridge currently boasts 48 renewable energy assets located across four countries. Collectively, those assets provide 1.8 GW of contracted renewable energy. Further to that, Enbridge has an additional $2.6 billion worth of offshore wind construction slated to come online within the next two years.
That impressive revenue stream allows Enbridge to pay a generous dividend to investors. The current quarterly yield works out to an impressive 6.53%. If that sounds impressive, there’s still more. Enbridge has provided investors with annual upticks to that dividend for 27 consecutive years. That includes the 3% uptick announced recently.
Put your money in the (right) bank
Canada’s big banks are among the best long-term investments on the market. They offer superb growth and handsome dividends, backed by years (often decades) of annual or better dividend hikes.
But which bank is best for investors seeking income and growth?
One bank to consider is Bank of Montreal (TSX:BMO)(NYSE:BMO). In terms of income, BMO’s dividend works out to a handsome yield of 3.63%, making it a great income addition. The bank has also provided annual bumps without fail to that dividend for decades.
Oh, and let’s not forget that BMO is a great growth pick, too.
In addition to its core domestic unit, BMO has a strong presence in the Chicago area through its BMO Harris operation. Late last year, BMO expanded its U.S. portfolio, by acquiring San Francisco-based Bank of the West. The massive US$16.3 billion deal will open the California market to BMO. In total, the deal will add 514 branches and 1.8 million new customers.
In other words, for those investors seeking income and growth, BMO is a superb pick for nearly any portfolio.
Sun, wind, and water could make you rich!
One segment that attracts a lot of attention from investors is renewable energy. There’s a good reason for that attention. The importance of transitioning to renewables in the near term is something that nearly all governments and locales have embraced.
This makes renewable energy stocks such as TransAlta Renewables (TSX:RNW) great candidates for investors seeking income and growth from a single stock.
TransAlta offers investors a growing portfolio of renewable facilities that are located across Canada, the U.S., and Australia. Apart from the global urgency in transitioning to renewables, another point to note is TransAlta’s business model.
In short, TransAlta follows a similar business model to that of traditional utilities. In other words, regulated long-term contracts provide TransAlta with a reliable and recurring source of revenue that spans decades.
Noteworthy is the fact that unlike those traditional utilities, TransAlta isn’t straddled with huge capital costs to transition to renewables. Instead, TransAlta can use that recurring revenue stream to invest in growth and provide a juicy dividend.
That dividend currently works out to an appetizing 5.72% and, unlike most income stocks, is paid out on a monthly basis.
Seeking income and growth? Don’t wait!
No stock is without risk. Fortunately, TransAlta, BMO, and Enbridge represent unique options in their respective fields where that risk is minimal. All are market leaders that have growth and income prospects that make them fine additions to any new investor’s portfolio.
Buy them, hold them, watch them grow, and earn a tasty income.
