These Dividend Aristocrats Have Much More Going for Them Than Just Their Yields

Choosing the right combination of dividend growth stocks can be challenging but deliver substantial long-term wealth growth.

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The Canadian stock market presents plenty of opportunities for investors to grow their wealth. Among the different approaches, dividend investing can be a stellar way to put your money to work in the market and generate returns in the long run. Fortunately, some Canadian dividend stocks increase distributions every year.

If you want your passive income stream to keep pace with or beat inflation, investing in Canadian Dividend Aristocrats can be a fantastic strategy. These dividend payers are likely to keep growing dividend payouts, consequently increasing how much you can earn regularly by remaining invested in these publicly traded companies over the years.

Today, I will discuss three Canadian dividend stocks you can invest in for this purpose.

Dollarama

Dollarama Inc. (TSX:DOL) can be a great example of a dividend-growth stock that also offers wealth growth potential through capital gains. Dollarama is a $24.5 billion market capitalization Canadian dollar store chain. Headquartered in Mount Royal, it has been Canada’s biggest retailer of items for five dollars or less since 2009.

The company’s business model has allowed it to thrive in the past decade, catering to consumers embattled with rising living costs. By offering various products at low fixed-price points, it manages to drive traffic and support its financials regardless of the broader economic environment. Besides value pricing, its store base expansion also supports its top-line growth.

As of this writing, it trades for $86.87 per share, paying its shareholders a 0.33% dividend yield. Between its growing dividends and capital gains, it can be an excellent long-term investment.

Waste Connections

Waste Connections Inc. (TSX:WCN) is a $48.2 billion market capitalization giant in the waste disposal industry. It is the third-largest integrated provider of traditional solid waste and recycling services in North America. Operating 91 active landfills, 132 transfer stations, and 68 recycling operations in the region, it serves residential, commercial, industrial, and energy end markets.

Due to the essential nature of its services, the company is well-positioned to continue generating solid income for decades to come. Driven by a sound management strategy and smart acquisitions, it also possesses strong long-term growth potential. As of this writing, the Canadian Dividend Aristocrat trades at $187.29 per share, paying its investors their shareholder dividends at a 0.74% dividend yield.

Alimentation Couche-Tard

Alimentation Couche-Tard Inc. (TSX:ATD) is a $69.6 billion market capitalization multinational convenience store chain operator. With over 14,300 stores across Canada, the US, Mexico, Ireland, Sweden, China, Poland, and several other international markets, it has a vastly geographically diversified presence.

Generating income through the sale of various products and services, the convenience retailer generates solid cash flows that it can use to comfortably fund growing its dividend payouts.

As of this writing, Alimentation Couche-Tard stock trades at $71.26 per share, paying its shareholders their dividends at a 0.78% dividend yield. While its payouts might not be as notable as many other dividend-paying stocks, it offers immense long-term growth potential through capital gains.

  • We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if Alimentation Couche-Tard Inc. made the list!

Foolish takeaway

When done right, dividend investing can be a great way to achieve financial freedom. Identifying and investing in high-quality dividend stocks like some of the top Canadian Dividend Aristocrats is a solid strategy.

Coupled with capital gains potential, the right investments can make you much wealthier down the line. To this end, Dollarama, Waste Connections, and Alimentation Couche-Tard stock warrant a place on your radar. If I were to pick one of the three, I would go with Dollarama stock for its ability to generate solid cash flows regardless of market circumstances.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool has a disclosure policy.

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