Stock market investing is not a race in which you’re competing with other investors to get the most returns in the shortest amount of time. Being successful as an investor requires patience alongside the ability to identify stability and growth on the TSX. Fortunately, there is no shortage of investment opportunities on the TSX that can offer reliable long-term returns.
Dividend stocks can be an excellent tool for investors with the patience and discipline to achieve long-term returns. Today, I will discuss a couple of high-quality dividend stocks that balance dividends, dividend growth, and long-term capital appreciation. These two are the kind of investments you can consider adding to your self-directed portfolio for the long haul.
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Canadian National Railway
Canadian National Railway Ltd. (TSX: CNR) is the owner and operator of the largest railway network in Canada, and a top dividend-paying stock on the TSX. The $102.1 billion market-cap railway operator has been in business since 1919 and maintains a dominant position in a largely consolidated industry with high barriers to entry.
The railway sector has struggled, with industry headwinds creating significant problems for CN Railway stock until its recent rebound. As of this writing, CNR stock trades for $167.94 per share, up by 33.2% from its 52-week low. CNR stock pays its investors $0.92 each quarter, translating to a 2.2% dividend yield.
While it might not offer high-yielding returns, CNR stock offers a dividend-growth streak that investors love. The stock has increased its payouts each year for the last 30 years, making it an attractive investment to consider for long-term dividend income seekers.
TC Energy
TC Energy (TSX: TRP) is a $99.8 billion market capitalization energy company that engages in providing energy infrastructure services to industry operators. The pipeline company’s extensive pipeline network is critical to the Canadian energy industry, especially amid rising demand for North American crude due to the US war against Iran and the subsequent closure of the Strait of Hormuz.
The year has been fantastic for TRP stock, which trades for $95.83 per share at writing. Up by 51.3% from its 52-week low, TRP stock has been hitting greater heights. While CNR stock is recovering to better levels, TRP stock is achieving new highs.
TRP stock pays its investors $0.88 per share each quarter, translating to a 3.7% dividend yield, and it has increased its payouts for the last 26 consecutive years. With AI-driven demand for natural gas rising high, there are plenty of chances that business will run well for pipeline operators. It can be a good investment for the long run at current levels.
Foolish takeaway
If you have contribution room available in a Tax-Free Savings Account (TFSA), a portfolio of income-generating assets like dividend stocks can be even better for your long-term goals. You can reinvest the dividends you earn to buy more shares of the stock, letting you use the power of compounding to accelerate your returns through tax-free growth. To this end, CNR stock and TRP stock can be good holdings to consider.
