Want a Chance at Getting Rich? Invest in Dividend Aristocrats

Are you looking for long-term, compounding growth? That’s what it’ll take to get rich. Yet it doesn’t mean investing in risky stocks.

| More on:
dividends grow over time

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Do you want to get rich? The key is compound interest. Compound interest is a powerful tool for building wealth through investing, and even small contributions can grow significantly over time. For example, if you invest $1,000 at an annual return of 7%, that amount will double in about 10 years without you adding anything further! The more time your money has to grow, the more it will compound, allowing Canadians to maximize long-term wealth with relatively small investments over time. Do you want even more? That’ll require some smart investments in safe companies like Dividend Aristocrats.

How it works

When investing, compound interest works by reinvesting your returns, allowing your original investment to grow alongside the returns themselves. For example, if you earn $50 on an initial $1,000 investment, reinvesting that $50 means your next round of returns will be calculated on $1,050, not just the original $1,000. This continuous reinvestment snowballs over time, growing your portfolio exponentially the longer you leave it untouched.

The key to maximizing compound interest is patience. The longer you leave your investments in the market, the greater the growth potential. For Canadians, the best way to achieve this is through consistent investing and reinvesting dividends. Dividend Aristocrats, or companies that have increased their dividends for five years or more, are excellent choices because they provide reliable income that can be reinvested. Reinvesting dividends from these companies further accelerates the power of compound interest, making them ideal for long-term growth.

Dividend Aristocrats are especially powerful for building wealth through compound interest because dividends are reliable and steadily growing. When you reinvest these dividends, not only does your initial investment grow, but each reinvested dividend also earns its own returns. This snowball effect can lead to substantial gains over time, making dividend aristocrats one of the best strategies for Canadians seeking consistent and reliable long-term growth.

Consider Manulife

Created with Highcharts 11.4.3Manulife Financial PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Manulife Financial (TSX:MFC) on the TSX is a great and safe investment choice for Canadians, especially for those seeking both growth and dividend income. MFC has seen a strong 52-week performance, with its stock up 45.04% year over year as of writing, and it currently offers a forward dividend yield of 4.31%. With a solid price-to-earnings ratio (P/E) of 9.28 and quarterly revenue growth of 12.8% year over year, the company is financially sound and well-positioned for continued success.

MFC’s consistent performance and earnings momentum make it a strong choice for conservative investors looking for reliable dividends. One analyst noted, “Manulife’s steady dividend payout, coupled with its strong balance sheet, makes it an attractive option for those seeking long-term income and growth potential.” With $27.7 billion in cash and a well-managed debt load, Manulife offers both financial stability and consistent dividend payouts, making it an excellent choice for long-term Canadian investors.

Bottom line

Compound interest is the secret sauce for growing wealth, especially when reinvesting dividends from reliable companies like Dividend Aristocrats. Manulife stands out as a great option on the TSX, offering solid earnings momentum and a strong dividend yield of 4.31%. With a 45% stock increase over the past year and a solid financial foundation, MFC is an excellent choice for Canadians looking for both growth and long-term, stable returns!

Should you invest $1,000 in Docebo right now?

Before you buy stock in Docebo, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Docebo wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

I’d Put $15,000 in These 3 Dividend-Growth Champions for Increasing Income Potential

Want to offset some volatility? Here are three defensive dividend-growth champions that can generate a juicy yield right now.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Transform Your TFSA Into a Cash-Creating Machine With $7,000

Discover how the Tax-Free Savings Account can be your golden goose for generating cash without losing your investment.

Read more »

monthly desk calendar
Dividend Stocks

How I’d Invest $10,000 in Canadian Value Stocks for Monthly Dividend Income

A $10,000-diversified portfolio of value stocks focusing on dividend safety, yield, growth, and payment schedules can provide a reliable source…

Read more »

a person watches a downward arrow crash through the floor
Dividend Stocks

Is This Correction Your Chance? Top 4 Canadian Dividend Stocks on Sale

Stocks may be down, but now is your chance to get some of these top dividend stocks on sale.

Read more »

Confused person shrugging
Dividend Stocks

Where to Invest $2,500 in the TSX Today

These TSX stocks offer attractive dividends and a shot at decent upside on a rebound.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Invest $25,000 in These Dividend Stocks for $1,956.66 in Annual Passive Income

Dividends stocks can make a huge difference, even if shares don't move an inch. And these might be the best.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Got $5,000? 5 Income Stocks to Buy and Hold Forever

These income stocks have a solid dividend-payout history that can help you earn stress-free passive income.

Read more »

grow money, wealth build
Dividend Stocks

Why I’d Invest $10,000 in This Undervalued Dividend-Growth Stock for Decades of Income

This undervalued dividend stock offers a high yield of over 8% and can help you earn more than $200 in…

Read more »