Whether you are a new or a seasoned investor, finding that right mix of stocks can be an overwhelming task. Fortunately, the market gives us plenty of options to choose from, including some great options. New investors in particular should consider these super stocks as a good place to start.
New investors want a juicy income, but don’t wait until you retire…
Securing a juicy income stream in retirement is one of the core objectives of every investor. Unfortunately, new investors often dismiss what that income stream can do for your portfolio right now — even if you’re decades out from retirement.
So, what can new investors do today? Reinvesting those dividends until you need to draw on that income can provide a huge boost to your retirement income potential. Let the market take care of itself; set and forget those stocks, and let them grow! That’s exactly the thinking behind this first super stock to consider.
Supercharge tomorrow’s income today
The first stock to note is Enbridge (TSX: ENB)(NYSE: ENB), which should be a name that is familiar to most investors. What most may not know, however, is just how big and far-reaching Enbridge is and what that can mean to your portfolio.
Enbridge is a true energy behemoth. The company operates one of the largest pipeline networks on the planet. That pipeline network transports a whopping one-fifth of all Canadian-bound crude to U.S. markets. Enbridge also moves a quarter of all the natural gas consumed in the U.S.
What does that mean to investors? Enbridge charges for the use of its network, and those fees are independent of commodity prices. In other words, Enbridge’s pipeline network operates like a toll-booth network, generating massive amounts of revenue irrespective of oil prices. That can be a huge bonus for new investors looking for a super stock.
That recurring revenue stream allows Enbridge to branch out, which, lately, means investing heavily into renewables. So far, the company boasts a network of facilities which are predominately wind and solar sites, with a gross capacity of over five gigawatts.
The growing importance of renewables represents a huge opportunity for investors. Thankfully, Enbridge’s investments today will pay dividends tomorrow.
Speaking of dividends, Enbridge offers investors a quarterly dividend with a juicy 5.84% yield. On an initial $20,000 investment, that works out to over $1,150 in just the first year. Keep in mind that reinvesting those dividends until needed will drive that income potential up further.
Oh, and let’s not forget that Enbridge has an established precedent of providing a generous annual uptick to that dividend going back over two decades.
Passive income from a defensive stock can be great
New investors should also seek out one or more defensive stocks to shore up their portfolios. These investments offer something to counter volatility, which does exist and needs to be considered. But what stock can provide that defensive appeal while also continuing to grow your nest egg?
That defensive stock to consider is BCE (TSX: BCE)(NYSE: BCE). BCE is one of the largest telecoms in Canada. More importantly, the company has also paid out dividends for well over a century without fail.
As a telecom, BCE’s business is reliable, recurring, and relatively low risk. If anything, the company is enjoying a unique change in the marketplace due to the impact of COVID.
Specifically, there are more people that remain remote workers, today. This elevates the need for a fast and reliable home internet connection to one of necessity. By extension, the pandemic also pushed other users to fully embrace the simplicity of mobile-based commerce. This brought welcome attention to the wireless segment, and the data service BCE offers. This and more make BCE a must-have stock for your portfolio.
As a dividend stock, BCE’s quarterly dividend currently pays out a juicy yield of 5.25%. Allocating a $20,000 initial investment towards BCE will provide new investors with a first-year income of $1,050.
New investors: Are you ready to put your portfolio on autopilot?
Both Enbridge and BCE offer investors attractive dividends wrapped up in a defensive package. Both stocks also provide annual bumps to the dividends and growth prospects.
To put it another way, both stocks are great set-and-forget stocks to let those reinvested dividends work for you.
In my opinion, both are great investments for new investors to help build a well-diversified portfolio.
