TFSA Blueprint: 4 Canadian Stocks to Secure Your Future

Dividend stocks like Fortis Inc (TSX:FTS) can help you secure a wealthy retirement.

| More on:
Dollar symbol and Canadian flag on keyboard

Image source: Getty Images

Is it possible to identify four stocks that are enough to secure a person’s financial future? According to finance textbooks, the answer is “no.” The more diversified the portfolio, the better — that’s what the professors say. In fact, the Motley Fool recommends that portfolios consist of at least 25 stocks on the low end. However, it is possible to invest profitably in portfolios that are on the smaller side of the acceptable range.

With that in mind, here are four Canadian stocks that could help you secure a prosperous future.

CN Railway

Canadian National Railway (TSX:CNR) is Canada’s biggest railroad company. It transports $250 billion worth of goods each and every year and has a massive rail network that touches three coasts.

CN Railway is an indispensable part of North America’s economic infrastructure. It ships high percentages of the grain, oil and timber consumed on the continent. It has only one competitor in Canada, and, as you’d expect based on that, it earns high margins, with a 35% net margin in the trailing 12-month period.

CNR is a dividend stock with a 2% yield. 2% might not sound like much, but CNR’s yield has grown over time. Over the last five years, it has grown by 10.4% per year. At that rate of growth, the dividend doubles in about seven years. If CNR keeps up the good work, today’s investors will have a higher yield on cost in the future.

TD Bank

Toronto-Dominion Bank (TSX:TD) is a Canadian bank stock with a 5.4% dividend yield. The stock’s current yield beats the yields on Canadian treasuries and Guaranteed Investment Certificates. It is the second-cheapest Big Six bank stock after Scotiabank, trading at 9.5 times earnings.

The reason why TD stock is cheap is because the company is being investigated for money laundering in the United States. Analysts expect TD to take $2 billion in fines related to the investigation. If the fines stop there then TD’s dividends will keep coming in no problem. There could be issues with regulators holding back the bank’s expansion efforts, although the investment banking segment is not subject to this risk.

Alimentation Couche-Tard

Alimentation Couche-Tard (TSX:ATD) is a Canadian gas station chain company. It got beaten down this year because it posted a few quarters of declining fuel sales. In the first half of 2024, oil prices went down, so that’s not surprising. However, ATD’s long-term trend is a good one.

The company expands by re-investing money into its own business. It does not borrow heavily, so it grows without uglying-up its balance sheet with debt. It stands to gain from increases in the price of oil (because it operates gas stations), but it will not suffer as much as a pure-play oil and gas company if oil prices go south. Overall, it’s a good business.

Fortis

Fortis (TSX:FTS) is a Canadian utility stock with a 4.4% dividend yield. It is a Dividend King, with 50 consecutive dividend increases under its belt. As a utility, Fortis enjoys stable revenue that comes in month after month. It is focused on growth, having spent several decades buying up utilities across Canada, the U.S. and the Caribbean. Finally, the company has a relatively modest amount of debt for a utility. Overall, it’s a safe and sound company that investors can depend on.

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 has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends Canadian National Railway and Fortis. The Motley Fool has a disclosure policy.

More on Dividend Stocks

A plant grows from coins.
Dividend Stocks

2 High-Yield Dividend Stocks to Buy as They Bounce

These two high-yielding dividend stocks are an excellent addition to your portfolio at these discounted stock prices.

Read more »

Pixelated acronym REIT made from cubes, mosaic pattern
Dividend Stocks

This 8% Dividend Stock Pays Cash Every Month

Investors can earn $154 in monthly cash by investing in this 8% dividend stock.

Read more »

Glass piggy bank
Dividend Stocks

Prediction: These 2 Canadian Bank Stocks Are Next in Line to Pop

These two Canadian banks are climbing, but still have so much more room to run. And with the highest dividend…

Read more »

Canada day banner background design of flag
Dividend Stocks

If You’d Invested $1,000 in Canadian Tire Stock in 2014, Here’s How Much You’d Have Today

Canadian Tire stock (TSX:CTC.A) is the ultimate Canadian stock. And yet it hasn't been the ultimate stock in terms of…

Read more »

hot air balloon in a blue sky
Dividend Stocks

3 Roaring Stocks to Hold for the Next 20 Years

Sure, there are stocks roaring upwards in the last year, but these three can claim doing it for decades.

Read more »

Canada Day fireworks over two Adirondack chairs on the wooden dock in Ontario, Canada
Dividend Stocks

The Dividend Kings: Stocks Every Canadian Investor Should Own

Fortis Inc (TSX:FTS) is a true dividend King.

Read more »

Golden crown on a red velvet background
Dividend Stocks

3 Dividend Aristocrats That Could Turbocharge Your Investments

Dividend investors can turbocharge their investments to ensure uninterrupted income streams by owning dividend aristocrats.

Read more »

RRSP Canadian Registered Retirement Savings Plan concept
Dividend Stocks

2 Stocks I’ll Be Adding to My RRSP – Even With the S&P 500 at All-Time Highs

Canadian stocks like the Toronto-Dominion Bank (TSX:TD) are looking cheap in 2024.

Read more »