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Before opening a managed investing portfolio with Wealthsimple Invest, a robo advisor will ask about your investment objectives and risk tolerance. You can inquire from a human advisor or allow the process to be fully automated. Rebalancing portfolios and reinvesting dividends are automatic features.
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Wealthsimple recommends Great-West Lifeco (TSX: GWO) and Capital Power (TSX: CPX) if you’re into dividend investing. They are Dividend Aristocrats owing to eight and 10 consecutive years of dividend increases. Moreover, both have market-beating potential besides the attractive dividend yields.
Top-performing insurance stock
Great-West Lifeco engages in life and health insurance, asset management, investment and retirement savings, and reinsurance businesses. The client base of this $35.96 billion international financial services holding company includes individuals, families, businesses, and organizations. Its distribution partners (agents, brokers, etc.) cover Canada, the U.S., and Europe.
The insurance stock trades at $38.62 per share and pays a 5.44% dividend. Current investors enjoy a nearly 27% year-to-date gain. While base earnings in the second quarter (Q2) of 2023 barely grew (+2%) versus Q2 2022, its president and chief executive officer (CEO) Paul Mahon said management’s disciplined execution of GWO’s strategy drives momentum across the portfolio.
Mahon added, “Across our operating companies, we continue to make organic investments and execute on transactions that will help us deliver on our value-creation objectives.” Total base earnings were $920 million compared to $903 million a year ago.
Great-West Lifeco’s value creation priorities in 2023 and beyond will focus on three key value drivers: Workplace Solutions, Wealth & Asset Management, and Insurance & Risk Solutions. The company acknowledges the economic uncertainties but remains confident in the resiliency and flexibility of the business to navigate current market conditions and identify or pursue opportunities.
Clean and green investment
Capital Power underperforms in 2023, although the lucrative 6.04% dividend yield compensates for the temporary weakness. At $41.32 per share, the year-to-date loss is 8.31%. Still, expect the renewable energy stock to recover and break out soon.
The $4.83 billion growth-oriented wholesale power producer builds and operates utility-scale generation facilities (renewables and thermals). It also has several projects in advanced development and invests in carbon capture and utilization. The power-generation capacity of its 29 facilities is around 7,500 megawatts.
In Q2 2023, revenues and net income increased 23.5% and 10.4% to $881 million and $85 million versus Q2 2022. On August 1, 2023, the board of directors approved a 6% hike in annual dividends, payable on October 31, 2023. Management’s dividend-growth guidance through 2025 is also 6%.
The business outlook is bright as Capital Power secures long-term renewable contracts, produces ultra-low carbon solar technology and bids for gas expansion and battery energy storage projects.
Platform simplicity
Wealthsimple is famous for its investing platform’s simplicity and commission-free stocks. However, it charges fees for managed portfolios and does not allow fractional dividend reinvestments.
