People build long-term wealth to secure and sustain their financial futures. It starts with a plan followed by a long journey. If successful, the rewards are financial freedom, peace of mind, and a comfortable retirement life. Preserved wealth can be an inheritance to heirs.
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Build long-term wealth
Regular folks with savings or free money to invest can turn to stocks for wealth creation. Stock investing is a time-tested, proven method to earn higher returns, although you must commit the funds over an extended period, if not years.
Canadians have many choices, but three TSX leaders are the best options for accumulating wealth. You’d have a rock-solid dividend portfolio that can ride out market volatility, endure price fluctuations, and maximize the power of compounding.
Dividend pioneer
The Bank of Montreal (TSX: BMO), Canada’s oldest financial institution, will keep investors whole on dividend payments regardless of the economic environment. The testament is the 195-year dividend track record dating back to 1829. If you invest today, the Big Bank stock trades at $143.49 per share and pays a 4.6% dividend.
With its $105 billion market capitalization, BMO is North America’s eighth-largest bank today. Sustaining quarterly payouts is not a concern because of a solid, good earnings history. The acquisition of the Bank of the West in the U.S. two years ago would boost net income further in the coming years.
Energy titan
A dividend growth stock like Enbridge (TSX: ENB) is a no-brainer choice for income-focused investors. The $139.2 billion energy infrastructure company is a dividend aristocrat owing to 30 consecutive years of dividend hikes. At $65.01 per share, you can partake in the hefty 5.9% dividend yield. According to its President and CEO, Greg Ebel, Enbridge’s business model is designed to succeed and deliver reliable cash flow in all market cycles. “Consistent dividend growth is an important component of our investor value proposition and underpins our dividend aristocrat status,” he added.
Enbridge is well-positioned to meet the increasing demand for conventional and new energy in North America. Management expects to deploy $7 billion of capital in 2025. The four core businesses (liquids pipelines, gas transmission, gas distribution & storage, and renewable power) and secured growth projects ensure reliable growth.
Dividend king
Fortis (TSX: FTS) is one of two TSX stocks that wears a crown. The $30.2 billion electric and gas utility company is a dividend king. This utility stock has raised dividends for 51 consecutive years (50 years is the threshold). As of this writing, the share price is $61.03, while the dividend offer is 4.1%.
The impressive dividend growth streak reflects the defensive nature of this income-producing stock. In September last year, management announced a new five-year $26 billion capital plan. The expected 6.5% compound annual growth rate (CAGR) of the rate base should support the regulated growth strategy and 4% to 6% dividend growth guidance through 2029.
Financial wealth
BMO, Enbridge, and Fortis are quality stocks for their stable earnings, strong balance sheets, and enduring business models. Buy and hold them in your portfolio, reinvest the dividends, and enjoy financial wealth in due time.
