Got $1,000? 3 Dividend Stocks to Buy and Hold Forever

Dividend stocks like Restaurant Brands International (TSX:QSR) can pay substantial amounts of passive income.

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Are you looking for investments to put $1,000 into?

If so, dividend stocks are a good bet. You can start growing your passive-income stream with as little as $1,000 with dividend stocks. The dividends on $1,000 aren’t that much initially — $50 per year with a 5% portfolio yield. However, you can grow your yield over time by adding to your initial position. By adding a few thousand a year, you may eventually find yourself with a diversified portfolio that pays you several thousand dollars per year by retirement.

In this article, I will explore three dividend stocks that could be added to a $1,000 dividend stock portfolio.

CN Railway

Canadian National Railway (TSX:CNR) is a Canadian dividend stock with a 1.9% dividend yield. The stock has risen 23% since November of last year, hitting a bottom at $144.12. Prior to the recent rally, the stock had been in a two-year-long sideways market. What happened was that the company’s earnings had been declining but improved and beat expectations in the most recent quarter.

Rail shipments were weak in 2023 for reasons that aren’t entirely clear. A briefing by Statistics Canada notes that labour disruptions affected carloads last year, but that doesn’t explain the fact that shipments were down at U.S. railroads as well. At any rate, carloads declined last year for one reason or another.

That was holding back earnings for a good long while, but in the fourth quarter, things started to turn around for CNR. In the quarter, the company delivered the following:

  • $4.47 billion in revenue, down 1.5%
  • $2.13B in net income, up 50%
  • $3.29 in diluted earnings per share (EPS), up 56%
  • A 47.6% net profit margin, up up 52.4%

It is a pretty good showing, indicating that CN Railway is still an indispensable part of the North American economy.

Restaurant Brands International

Restaurant Brands International (TSX:QSR) is a Canadian restaurant company that owns Tim Hortons, Popeyes Louisiana Kitchen, and Burger King. It owns thousands of restaurants across Canada and the United States. The company’s subsidiaries are widely known due to the ubiquity of their locations on city streets all over the world.

Restaurant Brands is doing well as a business. In its most recent quarter, it delivered:

  • $1.82 billion in revenue, up 7.8%.
  • $508 million in net income, up 122%.
  • $1.61 in diluted EPS, up 117.6%.
  • $492 million in operating income, up 0.61%.

Overall, it was a good showing and well ahead of what analysts had anticipated.

TD Bank

Toronto-Dominion Bank (TSX:TD) is a Canadian bank stock with a 5% dividend yield. It is one of the faster-growing Canadian banks, having grown its revenue by 7% per year over the last five years. It hasn’t grown its earnings quite as fast as its revenue because it had a number of one-time non-recurring costs that held earnings back this year.

Some were related to the cancellation of the bank’s much-derided First Horizon merger. The deal cancellation incurred some termination fees as well as some hedges that did not pay off. Fortunately, the bank’s stock fell after those issues were revealed, so now it can be bought more cheaply than before.

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 Andrew Button has positions in Toronto-Dominion Bank. The Motley Fool recommends Canadian National Railway and Restaurant Brands International. The Motley Fool has a disclosure policy.

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