Is it a good time to buy growth stocks or dividend stocks? Both stocks serve different purposes. However, several tech-related growth stocks have been falling due to uncertainty around the impact of artificial intelligence (AI). Several dividend stocks, from real estate to energy to telcos, have been slashing dividends. In this topsy-turvy world, here are two dividend stocks that can ace your growth game.
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The dividend stock for your growth game
TC Energy (TSX:TRP) stock has surged 87% since October 2023. What happened? Is this growth sustainable? In these 16 months, a lot has happened on the macro, policy, and company’s structure front, all in sync for the growth symphony.
TC Energy’s biggest risk was the Keystone XL pipeline, which reported several oil spills until the company cancelled the project after being revoked by the Biden administration. The company then spun off its oil pipeline business and is now a pure gas pipeline company. It has been completing gas pipeline projects on time and under budget.
The company earns more than 50% of its revenue from US Gas transmission. However, US tariffs have increased the need for diversification. To tap the North American liquified natural gas (LNG) exports opportunity, Canada made its first LNG exports from the LNG Canada terminal. The Canadian government has made it a priority project to expand terminals to export more gas.
The growth angle of TC Energy
TC Energy’s biggest growth driver could be the Natural Gas Transmission Line (NGTL) pipeline, as it will be the key beneficiary of this changing supply chain. In addition, artificial intelligence (AI) data centres are using natural gas-fired power stations to meet their energy needs, which will increase natural gas demand. Cherry on top are the Canadian government’s policies to expedite major infrastructure projects. The gas pipeline is in a cyclical rally, which could drive growth for the next five years.
Manulife Financial
Another dividend stock that is on a growth spree is Manulife Financial (TSX:MFC). Its stock has doubled since October 2023 as the company expanded organically and through expansion. It acquired U.S.-based Comvest Credit Partners and PT Schroder Investment Management Indonesia and entered the Indian insurance market in partnership with Mahindra & Mahindra.
Between 2023 and 2025, Manulife’s core return on equity (ROE) increased from 15.9% to 16.5%, and remittances increased from $5.5 billion to $6.4 billion. The company aims to increase ROE to 18% by 2027. It has grown its dividend per share at an average annual rate of 10.7% in the last 13 years. The stock’s momentum has slowed, with the share price falling 6% in February. Now is a good time to lock in a 4% yield and future growth.
