When it comes to investing in dividend stocks, there are a lot of considerations at play. But perhaps the largest concern is whether or not that dividend can continue long term. Thatās why weāre focusing on a dividend stock investors can buy, and hold onto as long as they want!
Yet how do you even start? After looking at the industry, youāll need to then seek out the right stock offering growing dividends and value. Which is exactly what weāre going to do today.
The right industry
When it comes to investing in the right industry, one area where dividend stocks have seen success is in the insurance asset management sector. This sector provides stable cash flows as insurance companies typically regularly collect premiums. Furthermore, asset management companies also earn fees, providing consistent revenue streams as well. This all adds up to consistent dividends.
Whatās more, insurance and asset management companies also provide essential services, which can continue even during economic downturns. We need insurance coverage and asset management even during these hard times, helping keep your portfolio resilient.
These dividend stocks also provide a great long-term investment as their own investments tend to be long-term in nature. This can help create stable cash flow for you, allowing you to increase your dividends as you go. And whatās more, it also means the company focuses on increasing its dividends as well!
The right stock
There are a lot of insurance and asset management companies on the TSX today, and many of them are doing quite well. And honestly, Iām not going to say you shouldnāt consider these stocks. But if youāre looking for some value, there is one that provides this as itās still down from 2021 highs.
That stock is Power Corporation of Canada (TSX:POW), a diversified international management and holding company with a variety of interests. These include financial services, renewable energy, and communications. This huge diversification mitigates risks rather than relying on just one industry or market segment for dividend income.
Whatās more, the company operates in the stable insurance and asset management sectors. It has a long history of dividend payments and growth from this focus as well. Power stock offers a healthy balance sheet, strong financial position, and robust cash reserves. All this stability helps to enhance its ability as well to continue paying dividends.
The right price
Again, what makes Power stock the right choice comes down to the price. While Power stock is up 15% in the last year, look back and itās still down 11% from 2021 highs. While itās climbing back towards those prices, there is still time to latch on. Especially while it trades at just 15.5 times earnings as of writing.
As for the dividend, the dividend stock currently sits at a drool-worthy 5.35%, producing $2.10 per year in annual dividend income. So if youāre looking for a strong investment thatās only going to grow, while adding even more dividend income, consider this stock. While the sector is certainly one most investors should get into, Power stock simply provides the right stock, at the right price.
