There are several ways to approach stock market investing to become successful. However, dividend investing is one of the best strategies you can use to build lasting wealth. Investing in a portfolio of high-quality dividend stocks can be a great way to make the most of your investment capital.
Dividend stocks provide wealth growth potential through more than just capital gains. While you wait for the value of your investment to grow over time, dividend stocks also provide returns through quarterly or monthly distributions. These are distributions that many well-established stocks with strong underlying businesses give to investors for simply owning shares in their companies.
You can use the dividends to line your account balance with extra cash or reinvest them to use the power of compounding and accelerate your wealth growth. Today, I will discuss two TSX dividend stocks that you can consider investing in for the long run.
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Monthly dividend stock
Most TSX stocks pay investors their shareholder dividends on a quarterly schedule, but there are those that pay each month, effectively letting investors earn like lazy landlords. If you’re interested in investing in the real estate sector without the cash outlay required to buy a property or the hassle of managing the rental, real estate investment trusts (REITs) can be a good bet. To this end, Dream REIT (TSX: DIR.UN) can be an excellent holding to consider.
Dream REIT is a $3.49 billion market capitalization open-ended REIT that focuses on investing in industrial properties in key markets across the U.S. and Canada. REITs pay investors monthly distributions, which sort of works like getting rent from the company’s tenants based on the number of shares of the REIT you own.
As of this writing, Dream Industrial REIT trades for $11.93 per share and offers $0.058 in monthly distributions, translating to a 5.87% annualized dividend yield.
Quarterly dividend stock
While monthly dividend stocks are great, it doesn’t mean quarterly dividends are a bad thing. One of the top picks for quarterly dividends might be a blue-chip giant in the Canadian telecom space: BCE (TSX: BCE).
BCE is a $28.09 billion market-cap telecom provider in Canada. It is one of the Big Three telcos in the country, offering wireless and broadband internet, TV, and landline phone services throughout the country. It is one of the leading forces behind 5G infrastructure in the country. BCE also boasts an extensive media segment.
In an age when people need to stay connected with the world, telecoms are now as essential as any utility business. As of this writing, BCE stock trades for $30.79 per share and pays its investors $0.4375 per share each quarter, translating to a 5.68% annualized dividend yield.
Foolish takeaway
Dividend investing works best when you have a long investment horizon and can remain invested for years without worrying about short-term losses. It requires a lot of discipline and patience, but even the smallest investments can deliver huge returns down the line. If you seek solid investments to kickstart your dividend investing journey, Dream REIT and BCE stock can be excellent picks to consider.
