Outperform the TSX With This Lucrative Dividend Stock

Brookfield Asset Management (TSX:BAM) and another top dividend play could beat the TSX handsomely.

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It can be tough to beat the market consistently over the long term — that is, unless the market you seek to beat is the TSX Index. Undoubtedly, the TSX has been dragging its feet in the past five years, with just 30% in gains over the span. With a relative lack of technology exposure relative to the U.S. market, it should be no surprise to see the Canadian stock market making a slow and steady ascent.

The good news is that the TSX’s bull market may be a tad more sustainable. After all, explosive booms, like the one experienced by the Nasdaq 100 currently, tend to end painfully. Of course, just because big booms end in a correction or bear market does not mean that the index is to be avoided at all costs in the midst of a bullish surge.

In this piece, we’ll focus more on lucrative dividend stocks trading at fairly modest prices of admission. With such names, you won’t have to worry about when the S&P 500 is going to finally tumble. Depending on which talking head you listen to, the S&P 500 seems a bit toppy and perhaps ready to implode.

Indeed, market strategists and cautious tones may be good for the longer-term health of the rally. Regardless, value investors who are not all too comfortable with betting on tech now that it’s starting to show subtle signs of cracks do not have to make a move in the sector.

Without further ado, let’s check out two top TSX stocks that could continue inching higher steadily from here.

Alimentation Couche-Tard

Shares of the convenience store retailing giant behind Circle K Alimentation Couche-Tard (TSX:ATD) have been crushing the TSX Index for years. Year to date, however, ATD stock has been trailing, with shares currently flat since the year began, while the TSX Index has risen a modest 3.3%.

I think the tables could turn in the second half as Couche-Tard stock moves on from its latest correction. Last week, the stock got a Buy rating courtesy of analysts over at Jefferies alongside a $91 price target, which implies just under 20% worth of upside from here.

Specifically, Jefferies is a bull on the company’s ability to continue consolidating the industry. It can do mergers and acquisitions right, and with plenty of cash on hand, growth by acquisition could be the name of the game over the coming years. Jefferies is also confident that Couche-Tard can adapt to the electric vehicle age over the next few years. As for the dividend, it’s yielding a decent 0.91%. Though small, it’s very “growthy,” especially as earnings continue to surge from here.


Brookfield Asset Management (TSX:BAM) is another great stock to hang onto for the long haul while it’s going for $52 and change. The stock boasts a generous 4% dividend yield after correcting around 10% from all-time highs. I think the dip is buyable, especially for those seeking exposure to one of the best management teams in the alternative asset scene.

Should tech rollover and alternative assets begin to garner more interest, I think BAM stock could be in for a solid finish to the year. Between BAM stock and the TSX Index, I’d go with the former every day of the week.

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 Joey Frenette has positions in Alimentation Couche-Tard. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends Brookfield Asset Management. The Motley Fool has a disclosure policy.

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