Dividend fortunes are up for grabs! You can get your share of the millions of dividends that are paid out by companies every year. Here are some Canadian stocks that can help lead your way to retirement wealth.
Brookfield Infrastructure Partners
Last year, Brookfield Infrastructure Partners (TSX:BIP.UN) paid out US$1.4 billion in dividends. The global infrastructure company has been increasing its payout for about 15 consecutive years. Its cash distribution more than doubled from 10 years ago. If you received $1,000 per year of cash distributions a decade ago, you would be making about $2,220 of income this year from the same investment.
From 2012 to 2022, the dividend stock sustainably increased its cash distribution by about 9% per year, while increasing its funds from operations (FFO) per unit at a rate of 11%. In other words, it reduced its FFO payout ratio in this period, which is a good trend to see.
BIP.UN, XIU, and XUT Total Return Level data by YCharts
The top utility stock targets to deliver total returns of 12-15%, over the long term, for its investors. Indeed, it has outperformed the Canadian stock market and the utility sector in the last 10 years by delivering a rate of return of about 17%. As shown in the graph above, it turned an initial $10,000 investment into about $48,460 in a decade.
It is also set up to continue increasing its cash distribution by 5-9% per year. Its stable cash flows are approximately 90% contracted or regulated. As well, about 80% of its FFO is protected from inflation.
Brookfield Infrastructure has a well-laddered debt profile with an average term to maturity of around seven years. It can foresee much of its interest expense as about 90% is fixed rate.
At $44.62 per unit at writing, analysts believe the stock is undervalued by about 25%. It also offers a nice yield of about 4.6%, paid out as quarterly cash distributions.
goeasy stock
Some Canadians cannot easily borrow money. However, they could use financial services provided by non-prime consumer lender goeasy (TSX:GSY). A certain percentage of the population would always require goeasy’s products and services. This is how the top Canadian stock is able to pay out more than $51 million in dividends a year now.
In fact, like Brookfield Infrastructure Partners stock, goeasy stock has been an outperformer. GSY stock’s fabulous 10-year total return was a compound annual growth rate of 30%, essentially turning an initial $10,000 investment into about $141,050.
GSY and XIU Total Return Level data by YCharts
Of course, it would be scary to have bought the stock at the last peak when it was trading at its bubble valuation. At $126.63 per share at writing, the stock is much more reasonably valued at about 10 times adjusted earnings. Importantly, despite regulation on capping the maximum allowable annual interest rate at 35%, management continues to forecast a high return on equity of around 21% through 2025. So, a reasonable valuation and high returns on equity should help drive solid returns over the next few years. The stock also offers a dividend yield of about 3%, which is paid out as quarterly dividends.
