3 Canadian Dividend Stocks With Potential to Double Your Money

These three Canadian dividend stocks, including Canadian Natural Resources stock, could double your money in nine years.

| More on:
Dollar symbol and Canadian flag on keyboard

Image source: Getty Images

While looking at potential high-return TSX stock investment opportunities today, it strikes me how seemingly easy it can be for Canadian investors to steadily double their money through buying and holding dividend-paying stocks and reinvesting the payouts. Canadian dividend stocks can help investors build wealth and be happier in their golden retirement years.

How can Canadian dividend stocks double my money? Regular dividends provide a dependable “base” annual return on your investment. They do the heavy lifting. You will need a smaller change in stock prices each year to reach your desired total return goals on invested capital each year.

One golden rule of thumb, the Rule of 72, estimates how much return you need to double your money in a given period. An 8% yearly return could double your money in just nine years!

Three Canadian dividend stocks on my radar today could easily generate total returns above 8% per year over the next decade. They have the visible potential to double a patient investor’s money over the next decade. Let’s have a closer look.

CT REIT

CT Real Estate Investment Trust (TSX:CRT.UN) is a Canadian real estate investment trust (REIT) that should generate sizeable stable returns that may double your money in under a decade.

The trust pays well-covered and steadily growing monthly income distributions. Its recently raised distribution (by 3.5%) should yield nearly 6% annually. Equity units thus need to rise by just over 2% per year to achieve the 8% total annual return needed to double your money in nine years.

CT REIT owns more than 370 retail properties in Canada. Its properties are fully occupied with a strong 99.2% occupancy rate by March 31, 2023. New development projects are fully leased out with a 99.4% committed occupancy.

The trust has a robust real estate portfolio that should support recurring dividends and attract high valuation multiples once the Canadian real estate market recovers again.

Distributions remain well covered given a low adjusted funds from operations (AFFO) payout rate of 72.8% during the first quarter. CT REIT has raised its distributions every year for more than a decade. It’s a Dividend Aristocrat you can trust to grow your capital.

Dream Industrial REIT

Dream Industrial Real Estate Investment Trust (TSX:DIR.UN) is another Canadian REIT that could make dividend stock investors’ dreams of doubling their money come true.

It owns 321 properties fully occupied properties with 70.4 million square feet of gross leasable area. Dream Industrial REIT is capitalizing on rapid rent growth on highly sought industrial assets to grow its rental income.

The trust signed new leases and lease renewals at an average spread of 41% over expiring rents during the first quarter. Net rental income increased by 24.7% for the first quarter to $81.5 million.

How to double your money? The trust pays a monthly distribution that yields 5% annually. Distributions are safe given a payout rate of 68% of funds from operations. Unit prices need only rise by 3% every year during your holding period to double your investment. And that’s doable because they are already undervalued.

Dream Industrial units had a net asset value (NAV) of $17.03 per unit by March 31, 2023. They trade at a discount to NAV and have a 24% upside potential, as the Canadian real estate market roars back to life.

Canadian Natural Resources stock

Canadian Natural Resources (TSX:CNQ) is an $80 billion oil and gas giant that recently committed to distributing 100% of its growing free cash flow during the current oil super cycle. The Canadian dividend stock could easily double your money in under a decade if oil prices continue to cooperate.

How CNQ stock can double your money? The energy stock’s quarterly dividend yields 4.8% annually. It has raised its dividend for 23 consecutive years. The dividend is well covered and may be sustained, even if oil prices fall towards CNQ’s breakeven West Texas Intermediate benchmark price in the mid-US$30s.

After reducing its net debt level by $10.7 billion in two short years to $10.5 billion, CNQ intends to pay out all its free cash flow to investors through dividends and share repurchases going forward.

Share repurchases will be a strong driver of total shareholder returns in the future. The remaining shareholders will own a growing stake in CNQ stock without lifting a finger.

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 Brian Paradza has no positions in any of the stocks mentioned. The Motley Fool recommends Canadian Natural Resources and Dream Industrial Real Estate Investment Trust. The Motley Fool has a disclosure policy.

More on Dividend Stocks

stock research, analyze data
Dividend Stocks

How Much to Invest to Get $500 in Dividends Every Month

TSX dividend stocks such as Enbridge, TD Bank, and Telus, can help you earn $500 in monthly dividend payments.

Read more »

Golden crown on a red velvet background
Dividend Stocks

Dividend Powerhouses: Canadian Stocks to Fuel Your Portfolio

These two top Canadian dividend aristocrats are some of the top stocks on the TSX to buy now and hold…

Read more »

Dial moving from 4G to 5G
Dividend Stocks

This Undervalued Dividend Stock is Worth Buying Right Now

Want an undervalued dividend stock with long-term potential and a juicy yield? Here's an option you may regret not buying…

Read more »

A worker gives a business presentation.
Dividend Stocks

1 Stock I’m Buying Hand Over Fist in July Despite the Market’s Pessimism

This top dividend stock is going through a rough patch, but don't let that count out all the growth we've…

Read more »

person on phone leaning against outside wall with scenic view at airbnb rental property
Dividend Stocks

2 TSX Stocks Poised to Have a Big Summer

Restaurant Brands International (TSX:QSR) stock and another darling that could be too cheap to ignore this summer.

Read more »

HIGH VOLTAGE ELECRICITY TOWERS
Dividend Stocks

Forget Fortis Stock: Buy This Magnificent Utilities Stock Instead

Looking for high dividends and returns? Then I'm sorry, but Fortis (TSX:FTS) stock probably isn't for you.

Read more »

Increasing yield
Dividend Stocks

2 High-Yield (But Slightly Risky) Stocks to Keep Your Eye on

Have these top TSX dividend stocks finally bottomed?

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks I’d Buy if They Fall a Bit

Any near-term decline in these two top Canadian dividend stocks will make them look even more attractive.

Read more »