When it comes to investing, one of the biggest tradeoffs many investors face when buying Canadian stocks is deciding whether to prioritize long-term growth or immediate income through dividends.
Traditionally, younger investors or those with a higher risk tolerance have tended to favour growth stocks. Conversely, investors who are older, closer to retirement, or simply looking to prioritize capital preservation and passive income have often preferred dividend-paying stocks.
And while many stocks tend to offer more of one than the other, some of the best long-term investments can deliver both.
In fact, companies that consistently grow their earnings and cash flow are often in the best position to increase their dividends year after year, especially well-established businesses operating in industries that are essential to the economy.
That’s what gives investors the opportunity to benefit from both long-term capital appreciation and a growing stream of passive income.
So, if you’re looking to build a portfolio that can provide reliable income today while still offering consistent long-term growth potential, here are two Canadian stocks that continue to deliver both.
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One of the best Canadian real estate stocks to buy for both dividends and growth
If you’re looking for a reliable long-term investment that can grow both its operations and distributions consistently for years to come, Granite REIT (TSX:GRT.UN) is easily one of the top stocks I’d consider first.
Granite has built one of the highest-quality industrial real estate portfolios in North America and Europe, making it an excellent long-term investment for investors looking for both growth and income.
In fact, real estate has long been one of the best industries for generating passive income, while industrial properties continue to benefit from long-term trends like e-commerce growth, supply chain modernization, and increasing demand for distribution and logistics space.
That’s why Granite has been able to steadily expand its portfolio while generating reliable rental income from a diversified group of tenants.
At the same time, Granite has maintained a strong balance sheet and disciplined approach to growth, allowing it to continue investing in new opportunities without sacrificing financial flexibility.
In fact, over the last five years, as it has continued to increase its dividend each year, its payout ratio has fallen substantially, from 80% of adjusted funds from operations (AFFO) in 2021 to just 65% this year. At the same time, its dividend has increased by nearly 20% over that stretch, highlighting just how well Granite’s business has continued to expand.
So, if you’re looking for a reliable Canadian dividend growth stock to buy now and hold for years, Granite, with its current 3.6% dividend yield, is unquestionably one of the top stocks to consider.
One of the best long-term investments on the TSX
In addition to Granite, another high-quality Canadian stock to buy and hold long term if you’re looking for significant dividend income and consistent growth potential is Brookfield Asset Management (TSX:BAM).
Brookfield is one of the best long-term investments to buy because it continues to expand into markets and industries that have decades of growth potential.
For example, as one of the world’s largest alternative asset managers, Brookfield continues to benefit from rising demand for infrastructure, renewable power, private equity, real estate, and more.
Therefore, as more institutional investors allocate capital to these asset classes, Brookfield continues growing the assets it manages, helping drive higher fee-related earnings over time.
Furthermore, because much of its revenue comes from long-term management fees, the business generates predictable cash flow that management can reinvest back into the company while continuing to reward shareholders through a growing dividend.
In addition, because much of its growth comes from raising new capital, Brookfield can afford to pay an attractive dividend without sacrificing as much long-term growth potential as more capital-intensive businesses.
That business model creates a powerful combination and is a major reason why Brookfield, with its current dividend yield of 4.3%, is one of the best dividend growth stocks Canadian investors can buy right now.
