Long-Term Investing: 2 Top Dividend-Growth Stocks to Power Your Portfolio

While many growth stocks remain under pressure in this environment, here are two top dividend-growth stocks to buy now and hold forever.

| More on:
Growing plant shoots on coins

Image source: Getty Images

When it comes to investing your hard-earned capital, there’s no question that the best strategy to consider is long-term investing. And especially in the current market environment, if you can find top dividend-growth stocks to buy and hold for the long haul, these can be some of the best investments that you make.

High-quality stocks have the ability to grow consistently for years, compounding your capital significantly.

But not all growth stocks will be rapidly growing companies in the early stages. That’s why owning high-quality dividend-growth stocks is also crucial, particularly to help grow your portfolio through downturns in the economy and stock market, as we’re seeing today.

In fact, while many stocks have sold off this year, growth stocks, particularly early-stage growth stocks that aren’t yet profitable, have been some of the biggest underperformers.

Therefore, owning high-quality, dividend-growth stocks for the long run that have well-established businesses will be crucial to investors’ long-term success.

If you’ve got cash to invest today, here are two top dividend-growth stocks — one that’s been extremely resilient in this environment and one that you can buy at a significant discount today.

One of the best dividend-growth stocks to buy today

If you’ve got cash to put to work today and are looking for highly reliable dividend-growth stocks to buy, Emera (TSX:EMA), the utility stock, is certainly a top choice.

Utility stocks make excellent dividend-growth stocks due to their robust business operations and highly predictable revenue and cash flow. In fact, Emera is in the midst of a multi-year capital program, where it plans to increase its dividend by 4-5% each year through 2024. It also expects its rate base to grow between 7% and 8% a year through 2024.

Plus, in addition to its current dividend-growth plan, Emera has a lengthy 15-year dividend-growth streak showing what a high-quality and consistent investment it can be. Furthermore, since 2000, the dividend, which now yields roughly 4.4%, has increased at a compounded annual growth rate of 5%.

And now, with the stock trading near the bottom of its 52-week range, it’s certainly one of the top dividend-growth stocks you can buy. However, it’s worth noting that even near the bottom of its 52-week range, Emera trades just 10% off its high.

So, while the discount it offers is not that significant, it’s also a reminder of what a reliable and resilient stock Emera is that can protect your capital, as the market sells off, while continuing to pay an attractive dividend.

A top TSX stock to buy and hold for the long haul

If you’re an investor looking for a high-quality dividend-growth stock but are looking for more of a discount, I’d recommend Granite REIT (TSX:GRT.UN)(NYSE:GRP.U).

Granite is an industrial real estate stock with assets in North America and Europe. It, too, is a resilient business and a reliable investment with a dividend-growth streak of 11 years.

The reason why it’s sold off much more than Emera this year (down over 30% from its 52-week high) is that it’s much more of a growth stock and, prior to the selloff, was trading with a well-deserved premium.

So, the fact that it’s sold off doesn’t necessarily make it any less reliable of an investment. In fact, there’s now much less downside risk, plus investors have the opportunity to buy at a discount and with an elevated yield that now sits at 4.3%.

Industrial real estate is one of the best subsectors to invest in due to all the long-term tailwinds and strong demand that the industry has seen in recent years.

Therefore, if you’re looking for top dividend-growth stocks to buy now, Granite REIT is easily one of the best to consider.

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 Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool recommends EMERA INCORPORATED and GRANITE REAL ESTATE INVESTMENT TRUST. The Motley Fool has a disclosure policy.

More on Dividend Stocks

analyze data
Dividend Stocks

The Best Dividend Stocks in Canada Right Now

Earn worry-free income from these best Canadian dividend stocks.

Read more »

Value for money
Dividend Stocks

3 Top Canadian Value Stocks in December 2023

Not all undervalued stocks are worth buying. You should look into the fundamental strengths of the stocks and reconcile value…

Read more »

Growing plant shoots on coins
Dividend Stocks

2 Under-the-Radar Dividend Payers With Solid Growth Prospects in 2024

These under the radar monthly dividend payers could provide good growth prospects in 2024 and beyond.

Read more »

Question marks in a pile
Dividend Stocks

Should You Buy BMO Stock for its 5.2% Dividend Yield?

BMO stock has outpaced the broader markets in the past two decades. But is this blue-chip TSX bank stock a…

Read more »

data analyze research
Dividend Stocks

Better Dividend Stock for Passive Income: NorthWest REIT or Nexus REIT?

These two dividend stocks offer passive income above 8%, but which is the better (and safer) buy on the TSX…

Read more »

Dividend Stocks

Is Enbridge Stock a Buy Just for the 7.7% Dividend Yield?

Enbridge is moving higher after a prolonged pullback. Has the stock bottomed?

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

3 Top Canadian Royalty Stocks With Dividend Yields Averaging 5%

Canadian royalty stocks can provide a lucrative income for investors. Here are three great options to consider buying right now.

Read more »

Man considering whether to sell or buy
Dividend Stocks

TD Stock: Buy, Sell, or Hold?

TD stock (TSX:TD) plunged as the company looks to have more expenses on the books for the next year. So…

Read more »