Spring cleaning doesn’t apply to just a closet, garage, or attic. It also represents an ideal time to rebalance your portfolio. This is especially true given the volatile year that 2023 has been. Fortunately, the market gives us plenty of options to consider, including some stellar long-term gems.
Here’s a look at two stocks that can help rebalance your portfolio today, while catering to both growth income.
Start with a lucrative business and a monster dividend
Most investors are familiar with Enbridge (TSX:ENB) which is best known for its pipeline network. That pipeline business is, in a word, massive. In fact, it’s the largest and most complex pipeline system on the planet.
Enbridge hauls nearly one-third of all North American crude and one-fifth of the natural gas needs of the United States. Perhaps best of all, Enbridge generates a stable and recurring revenue stream independent of the volatile oil prices.
In short, the segment generates the bulk of Enbridge’s revenue and helps fund its monster dividend. It’s easy to see why Enbridge is often seen as a great defensive pick. But there’s still much more to consider.
But that’s not all. Enbridge also operates a growing renewable energy business. The segment comprises a portfolio of over 40 renewable energy facilities across North America and Europe. Collectively, those facilities generate over 5,100 megawatts gross generating capacity.
Given the increasing importance of renewables, the segment will continue to see strong growth. Enbridge has already invested $8 billion over the past two decades into the segment.
Apart from the defensive appeal and growth prospects, there’s another all-important reason to rebalance your portfolio with Enbridge. That would be the lucrative dividend it offers.
Enbridge offers investors a tasty quarterly dividend with three decades of solid annual increases to that dividend. As of the time of writing, the yield on that dividend works out to an impressive 6.81%.
This means investors that drop $25,000 into the stock can expect to generate an income of $1,700 in just the first year.
And as with all income-producing stocks, investors not ready to draw on that income just yet can reinvest it until needed, boosting that eventual income further.
Banking on growth and a century of increases
If you’re looking to rebalance your portfolio, Canada’s big banks are another worthy option to consider right now. Banks may not sound like the best option to consider, given recent volatility and the failures we’ve seen in the U.S. market.
Fortunately, that volatility doesn’t extend to Canadian lenders as much as it does to U.S. banks. In fact, Canada’s big banks are well-known options that fare considerably better than their U.S. peers during times of volatility.
This is attributed to the more regulated, and generally more conservative approach adopted by the big banks. So, then, which big bank should investors consider right now?
The bank that investors should consider right now is Bank of Montreal (TSX:BMO)
Bank of Montreal isn’t the largest of Canada’s big banks, but it is the oldest in Canada. In fact, the bank has been paying out dividends to investors for nearly two centuries without fail. BMO has also provided investors with a generous annual uptick to that dividend for well over a decade. The one exception to that streak was during the pandemic.
Today, that dividend works out to an impressive 4.78%, making it one of the better-paying options on the market. Using that same $25,000 example noted above, investors can expect a first-year income to come in just shy of $1,190.
Turning to growth, BMO has a unique advantage over its big bank peers. BMO completed the acquisition of California-based Bank of the West earlier this year. The deal propelled BMO to become of one the largest banks in the U.S. market and is expected to fuel growth for years to come.
Rebalance your portfolio now for future growth
Both BMO and Enbridge are great stocks to consider as part of any portfolio. Both offer significant long-term growth prospects and a growing dividend. In my opinion, one or both should be core parts of any well-diversified portfolio.