Want to Be a Millionaire? Invest $75,000 Into These 4 Phenomenal Stocks and Wait 20 Years

Here’s how these four fundamentally strong Canadian dividend stocks can make you a millionaire in the long term.

funds, money, nest egg

Image source: Getty Images

If you want to become a millionaire, you don’t need to risk your hard-earned savings by buying highly volatile growth stocks. If you start your investment journey early and have time to hold some fundamentally strong Canadian dividend stocks for about 20 years, you can become a millionaire without increasing your risk exposure.

In this article, I’ll discuss how you can get more than $1 million in return in 20 years by investing a sum of $75,000 (or $18,750 each) in the following four phenomenal dividend stocks in Canada. Let’s begin.

Enbridge stock

Enbridge (TSX:ENB) is arguably the most popular Canadian dividend stock. This Calgary-based energy transportation and infrastructure company has consistently increased dividends for the last 27 years. Apart from its thriving traditional energy business, Enbridge’s recent investments in renewable energy and crude oil export segments could help it accelerate its financial growth significantly in the long run.

This Canadian Dividend Aristocrat has a market cap of $103 billion, as its stock hovers at $51.10 per share with a 3% year-to-date gain. At the market price, ENB stock has an attractive dividend yield of 6.7%. Now, let me quickly give you an idea about the kind of returns you can expect by investing in it. If you’d invested $18,750 in its stock 20 years ago, your invested capital would have grown to around $224,865 by now with dividend reinvesting.

Royal Bank of Canada stock

Royal Bank of Canada (TSX:RY) is another great dividend stock that could help you become a millionaire in the long run. If you’d bought more of its shares with its dividends, an $18,750 investment in its stock 20 years ago would have grown into nearly $192,806 today, reflecting a solid 928% total return.

The largest Canadian bank has a well-diversified business model and currently focusing on its U.S. market expansion strategy. Moreover, Royal Bank’s resilient balance sheet and active risk management make it one of the most reliable dividend stocks to own in Canada. At the time of writing, its stock is trading at $122.02 per share with about 8% year-to-date losses and has a dividend yield of 4.2%.

Bank of Nova Scotia stock

Bank of Nova Scotia (TSX:BNS) is also among the most attractive Canadian dividend stocks from the banking sector. The broader market selloff has driven its stock down by 26% in 2022 so far to $65.87 per share, making it look undervalued. At this price, BNS stock has a dividend yield of 6.3%.

With dividend reinvesting, an $18,750 investment in its stock would have grown into around $182,140 in the last 20 years. While a grim economic outlook could lead to increased challenges for Scotiabank in the short term, its strong capital position, robust cash flows, and a key focus on organic growth should help it maintain a positive financial growth trend intact in the long run.

Canadian Natural stock

Canadian Natural Resources (TSX:CNQ) is another trustworthy dividend stock if you’re looking to earn outstanding returns on investments in the long run. Its stock currently trades at $75.16 per share with 43% year-to-date gains. At the market price, it offers a dividend yield of 4%. If you’d invested $18,750 in CNQ stock 20 years ago, it would have grown into $457,731 by now with dividend reinvesting.

In the five years between 2016 and 2021, Canadian Natural’s adjusted earnings jumped by 1125%. With the help of its balanced asset base, scale, and focus on operational efficiency, it could continue to deliver such solid financial growth and yield outstanding returns on your investments for decades to come.

Bottom line

With dividend reinvesting, an equally divided total investment of $75,000 in these four Canadian dividend stocks 20 years ago would have grown into about $1.06 million by now. While ongoing macroeconomic challenges might keep these large-cap stocks volatile in the near term, their long-term financial growth potential is likely to remain unaffected by these temporary challenges.

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.

The Motley Fool recommends BANK OF NOVA SCOTIA, CDN NATURAL RES, and Enbridge. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Dividend Stocks

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »