How 152 Shares of 1 TSX Stock Could Grow Into $1 Million in Savings

Even if there is modest growth, this TSX stock can bring you to over $1 million over time by reinvesting dividends and adding to your portfolio.

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Investors oftentimes create lofty goals when it comes to their investment plans. “I want to be rich,” could certainly be a goal, but what exactly does being rich mean? Does it mean making $1 million? Or does that turn into $2 million with inflation?

That’s why when it comes to creating goals, you need to get specific. Meet with a financial advisor who can help you do the calculations – one who can figure out what you will actually need and when, while also helping you pay down debt before you get there.

That being said, it’s important to see the potential of what a stock could do. Which is why today I’m looking at a strong TSX stock that could bring in substantial income in the next few decades. Even $1 million.

Scotiabank stock

The TSX stock I would consider one of the best options right this minute is the Bank of Nova Scotia (TSX:BNS). To be clear, TSX stocks in the banking industry are pretty impressive here in Canada. Each has provisions for loan losses, with the Big Six Banks enjoying an oligopoly in the banking industry. Less competition leads to more funds.

So why Scotiabank stock? During a downturn such as this one, there is worry about United States exposure. Scotiabank stock is a TSX stock focused on the emerging markets of Latin and Central America.

That’s not to say everything has been perfect. Scotiabank stock recently fell below analyst estimates. Even so, it will bounce back just as it has done during every downturn. When it does, you could create massive returns and dividends.

How much are we talking here?

Scotiabank stock is currently down 18% in the last year. It now holds a dividend yield at 6.19%, the highest yield of the banks right now. So should shares turn around and dividends continue growing as they have, you could be looking at a huge deal right now. Especially while it trades at 9.2 times earnings.

To figure out how to make $1 million, let’s look at the near- and long-term future performance. Shares of Scotiabank stock could recover to former 52-week highs this year. So that’s 30% returns in a year as of writing. Then, you’ve locked up a 6.19% dividend yield.

In the last decade, shares have grown at a compound annual growth rate (CAGR) of 4.2% in the last 20 years. The dividend has increased by a CAGR of 8.03% in that time for the TSX stock. Using this, let’s see how long it would take to reach $1 million, and how much.

Bottom line

Investors can put in $10,000 towards this TSX stock as of writing, then see it increase by 30%. Going forward, continue to add $6,000 each year, assuming the CAGR continues as normal. Here is what that investment could look like as it grows to reach $1 million.

Shares OwnedAnnual Dividend Per ShareAnnual DividendAfter DRIP ValueYear End Shares OwnedYear End Stock PriceNew Balance
152$4.13$628.13$10,790.38244.11$72.12$17,605.23
244.11$4.45$1,086.24$18,716.85335.39$77.91$26,130.55
335.39$4.63$1,552.41$27,717.88425.53$84.17$35,816.17
425.53$4.81$2,048.85$37,909.38514.54$90.93$46,785.42
514.54$5.01$2,576.99$49,416.13602.41$98.23$59,173.00
602.41$5.21$3,138.33$62,374.30689.12$106.12$73,125.90
689.12$5.42$3,734.38$76,932.40774.66$114.64$88,804.41
774.66$5.64$4,366.71$93,252.31859.03$123.84$106,383.30
859.03$5.86$5,036.93$111,510.37942.2$133.79$126,052.95
942.2$6.10$5,746.69$131,898.641024.16$144.53$148,020.69
1024.16$6.34$6,497.70$154,626.141104.89$156.13$172,512.20
1104.89$6.60$7,291.72$179,920.311184.39$168.67$199,773.04
1184.39$6.86$8,130.54$208,028.511262.62$182.22$230,070.28
1262.62$7.14$9,016.03$239,219.681339.58$196.85$263,694.32
1339.58$7.43$9,950.11$273,786.121415.25$212.66$300,960.77
1415.25$7.73$10,934.77$312,045.431489.62$229.73$342,212.58
1489.62$8.04$11,972.04$354,342.611562.67$248.18$387,822.28
1562.67$8.36$13,064.04$401,052.271634.39$268.11$438,194.40
1634.39$8.70$14,212.94$452,581.151704.78$289.64$493,768.16
1704.78$9.05$15,421.01$509,370.721773.82$312.90$555,020.31
1773.82$9.41$16,690.56$571,900.031841.51$338.02$622,468.17
1841.51$9.79$18,024.02$640,688.851907.84$365.16$696,673.04
1907.84$10.18$19,423.89$716,300.961972.8$394.49$778,243.80
1972.8$10.59$20,892.73$799,347.812036.4$426.16$867,840.79
2036.4$11.02$22,433.25$890,492.432098.64$460.38$966,180.04
2098.64$11.46$24,048.20$990,453.642159.51$497.35$1,074,037.89

In the end, it would take 26 years to reach over $1 million with this TSX stock.

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Bank of Nova Scotia. The Motley Fool has a disclosure policy.

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