Picking the right stocks for your portfolio early on can help to create a wealth-building dividend portfolio that will provide income for years.
Fortunately, the market is full of great wealth-building dividend stocks for investors to consider, and here’s a look at two great picks.
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You can’t ignore the opportunity
First up is Bank of Nova Scotia (TSX: BNS). It would be nearly impossible to mention wealth-building dividend stocks without noting at least one of Canada’s big bank stocks.
Scotiabank is not the largest of the big banks, but it is the most international bank. The bank has a presence in approximately 30 countries on 5 continents.
And it’s that international presence that fuels growth and sets Scotiabank apart from its big bank peers. That’s because those international markets offer geographical exposure to targeted, higher-growth markets outside of Canada.
More recently, the bank has also become focused on expanding its presence in more mature markets, such as the U.S. and Mexico.
That unique growth mix helps Scotiabank to invest in additional growth opportunities and pay out one of the best quarterly dividends among the banks. As of the time of writing, that dividend works out to an impressive 5.6% yield.
For those wealth-building dividend investors, that means a $1,000 investment in Scotiabank today will generate just under 1 share through reinvestments. If that $1,000 investment is repeated next year, investors can then expect to generate additional shares each year through reinvestments alone.
In other words, any eventual income will continue to grow on its own through those reinvestments.
Prospective investors should also note one final point around this wealth-building dividend stock. Scotiabank has paid out that dividend without fail for nearly two centuries.
That fact alone makes this a great buy-and-forget option for any portfolio.
Buy now and hold for decades
Another great option for wealth-building dividend investors to consider is Enbridge (TSX: ENB). Enbridge is one of the largest energy infrastructure companies on the planet.
The company generates the bulk of its revenue from its well-known pipeline business. That pipeline operation, which contains both natural gas and crude elements, is the largest and most complex pipeline system on the planet.
Enbridge charges for use of that network independently of commodity prices, which adds a defensive moat appeal (beyond the sheer volume it hauls) to the segment.
The revenue generated from the segment helps Enbridge to pay out its juicy quarterly dividend and fund growth from its multi-billion-dollar backlog.
Incredibly, Enbridge also operates several other revenue-producing segments that further its overall defensive appeal. That includes a growing renewable energy business and one of the largest natural gas utility companies in North America.
Turning to dividends, Enbridge is, in a word, impressive. The company offers a quarterly dividend that pays out an appetizing 5.8% yield. Using that same $1,000 example from above, prospective investors can expect to generate shares through reinvestments starting from that second-year investment.
Finally, wealth-building dividend investors should note that Enbridge has an established cadence of providing annual dividend increases going back three decades without fail.
That fact alone makes this a must-have for any wealth-building dividend portfolio.
Build your wealth-building dividend stock list
Both Enbridge and Scotiabank offer investors a strong defensive moat, reliable revenue generation, growth appeal, and a juicy dividend.
In my opinion, one or both should be core holdings in any well-diversified portfolio.
Buy them, hold them, and watch your (future) income grow.
