3 Stocks With a Combined 54 Years of Dividend Growth for Steady Safety

Dividend Aristocrats that offer reasonably decent capital-appreciation potential can be considered safe buys for most investors.

| More on:
A plant grows from coins.

Source: Getty Images

How can you be sure that the dividend company you are investing in will continue paying its dividends or won’t slash the payout? That’s a question many novice investors might have, and the answer is that it’s impossible to be a 100% sure.

Even if you choose an established industry giant and a Dividend Aristocrat with a proven history of growing their payouts for many years, you may still experience a dividend cut. An example is Suncor.

However, that’s still the best way to be sure — i.e., choosing Dividend Aristocrats with an adequately long history of raising their dividends for consecutive years. There are three that have grown their payouts for at least a decade and also offer decent capital-appreciation potential.

The banking giant

Royal Bank of Canada (TSX:RY) is an incredibly safe bet and one of the most coveted bank stocks in the country, even if you don’t take its stellar dividend history into account. As one of the largest banks in North America and the largest in the country, it offers enormous stability.

It has also shown good resilience and recovery during several financial crises, the most recent ones being the Great Recession and the 2020 crash.

As a Dividend Aristocrat, the bank has grown its payouts for at least 11 consecutive years. It’s currently offering a decent 3.95% yield, and a payout ratio is quite solid as well, and even though it broke through the 50% “safe line” during COVID, it remained below 60%, indicating the financial strength backing up the dividends.

The bank also offered modest capital-appreciation potential, as it has seen its stock rise over 120% in the last decade.

An insurance giant

Another “largest-in-the-country” Aristocrat you may consider investing in is Intact Financial (TSX:IFC). It’s the largest property and casualty insurance company in the country and is growing its presence in multiple international markets, making it more secure against local headwinds.

In addition to the security it offers as a leader in its industry, the insurance company also offers decent dividend stability. It has been growing its payouts for 17 consecutive years and is inching closer to the more stringent U.S. threshold of measuring Aristocrats — i.e., 25 consecutive years of dividend growth.

A stable payout ratio of roughly 26% makes the stock quite attractive to investors, though the yield is not on par (1.9%). But what the stock lacks in dividends, it makes up for in its growth potential, as it has grown over 217% in the last decade.

The railway leader

Canadian National Railway (TSX:CNR) is one of the oldest Aristocrats in the country and has raised its payouts for 26 consecutive years, making it an Aristocrat across the border as well, where it trades on the NYSE. It’s also the larger of two railway giants in the country.

Canadian National Railway is a formidable entity in the local cargo/freight business. Its tracks connect three major ports in North America, and, in addition to offering affordable mass cargo transportation services to a variety of clients via its rail routes, the company also has a strong trucking wing.

It’s currently offering a 1.7% yield, but the dividends are quite secure (financially), and the stock’s potential as an investment is substantiated by its growth history. It saw a rise in the market value of about 280% in the last 10 years.

Foolish takeaway

The three blue-chip stocks are steady and safe growers, offering reliable dividends and an impressive combined dividend-growth streak of over 54 years. Assuming they remain true to their stellar growth and dividend histories, you may hold them for decades and experience steady wealth building over the years.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Canadian National Railway and Intact Financial. The Motley Fool has a disclosure policy.

More on Dividend Stocks

edit Person using calculator next to charts and graphs
Dividend Stocks

Better Buy: Fortis Stock vs Enbridge

Fortis stock and Enbridge are top dividend stocks on the TSX today. Which stock is better buy for safe dividend…

Read more »

Canadian Dollars
Dividend Stocks

How to Make $1,500 in Passive Income 4 Times a Year

Blue-chip TSX stocks such as Enbridge can enable investors to create game-changing wealth over the long term.

Read more »

Dividend Stocks

TFSA: How to Easily Turn $10,000 Into $500/Year of Passive Income

You don't need to be a stock market expert to turn $10,000 into a $500 of tax-free passive income. Here's…

Read more »

protect, safe, trust
Dividend Stocks

Worried About a Recession? 2 TSX Blue-Chip Stocks to Protect Your Capital

If you fear a recession coming on soon, here are two blue-chip Canadian stocks to add to your portfolio for…

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

New TFSA Investors: 2 Top TSX Stock to Create a Self-Directed Retirement Fund

Top TSX dividend stocks are now on sale for new TFSA investors.

Read more »

money while you sleep
Dividend Stocks

Worried About the Market? 2 Dividend Stocks That Let You Sleep at Night

Here's why Restaurant Brands (TSX:QSR) and Enbridge (TSX:ENB) are two top dividend stocks to buy in this uncertain market right…

Read more »

money cash dividends
Dividend Stocks

How 1 Absurdly Cheap Stock Can Generate $100 in Monthly Passive Income

You can generate $100 or more in monthly passive income from one high-yield stock trading at an absurdly cheap price…

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

How I’d Invest $1000 in February to Make Easy Passive Income

Looking to earn some extra passive income in February but don't have much cash? Build an easy portfolio with these…

Read more »