Is your portfolio diversified against recent volatility? One of the benefits to establishing a set and forget portfolio is in the name itself – setting it up to run without worrying about it each week.
And if you’re looking for a fine example of a set and forget portfolio, here are some prime examples that can cater to both new and established investors alike.
Keep the power on and the income coming
Adding one or more defensive stocks to your portfolio is always a sound foundation. And at the top of any defensive stock list is Fortis (TSX: FTS)(NYSE: FTS).
Fortis is one of the largest utilities on the continent. The company has a sprawling portfolio that includes facilities in Canada, the U.S., and the Caribbean. Fortis also boasts over 3.4 million utility customers across its network.
Utility stocks are great additions to any set and forget portfolio. This is thanks to the stable and recurring revenue stream that utilities like Fortis generate. That stability comes thanks to long-term regulatory contracts that keep that revenue stream coming in.
That recurring revenue stream also means that Fortis can provide a stable (and growing) quarterly dividend. The dividend currently works out to a handsome 3.51% yield. As juicy as that sounds, there’s also dividend growth to consider.
Fortis has provided annual bumps to that dividend going back an incredible 48 consecutive years. Additionally, the company plans to continue that cadence with 6% annual bumps through the next few years.
That factor alone qualifies Fortis as a great set and forget option.
Banking on growth
It’s hard to mention a list of set and forget stocks without noting at least one of Canada’s big banks. The banks generate piles of cash and pay some of the best and most stable dividends on the market.
But which bank should you buy?
Let’s look at Canadian Imperial Bank of Commerce (TSX: CM)(NYSE: CM). CIBC is neither the largest nor most well-known of Canada’s big banks. But it does offer a compelling investment case.
That opportunity comes in the form of both income and growth. On the growth front, CIBC has expanded in recent years into the U.S. market. This not only added a diversification aspect to the stock to offset its domestic holdings but also set the bank up for growth.
That growth has been instrumental in the stock surging since the pandemic started. In fact, over the trailing two-year period the stock has surged from near $100 per share to its current level north of $157.
If that wasn’t enough, the bank recently started talking about a 2-for-1 stock split. Stock splits don’t add value, but they do attract value-based investors.
Turning to dividends, CIBC offers a quarterly payout that carries a yield of 4.06%.
A modern necessity you may not realize
Another area of the market that deserves attention from set and forget investors are Canada’s telecoms. When talking about Canada’s telecoms, the one to look closer at is BCE (TSX: BCE)(NYSE: BCE).
BCE is one of, or the largest telecom in the country, depending on your metric. Suffice to say that the company is huge and offers a coast-to-coast network for its subscribers. That subscriber network includes wired, internet, wireless, and TV services.
If that isn’t enough, BCE also operates a huge media arm that owns TV and radio stations across the country. That media arm is complementary to its core subscription business and provides yet another revenue stream to the company.
Across all those segments, the wireless and internet segments warrant a unique callout.
Since the pandemic started, more people are working and learning from home. That trend isn’t going to revert fully even when offices fully re-open. This means that the need for constant, high-speed service at home is now firmly a necessity of modern society.
On the wireless front, the insatiable demand for data keeps allowances and subscriber bills growing. Throw in the growing adoption of mobile commerce and you have another necessity of our modern world.
Turning to dividends, BCE offers a quarterly distribution of 5.44%. The company has been paying out dividends for over a century with annual or better bumps for over a decade.
