One of the best pieces of advice when investing is to start early and invest for the long term. This means that instead of desperately searching for a 10-bagger, young investors should focus on strong companies with a long track record of increasing shareholder value.

This is exactly what Bank of Montreal (TSX: BMO)(NYSE: BMO) and Potash Corp./Saskatchewan (TSX: POT)(NYSE: POT) offer. They pay a steady dividend, operate in industries with plenty of potential, and possess high barriers to entry.

Let me explain why I think that both belong in every young investor’s portfolio.

Healthy dividend

Even with the market at an all-time high, both companies currently have a dividend yield of more than 3.5%. This is great income when you compare it to the 2.19% that you get for holding on to a 10-year Canadian government bond.

Neither has missed a dividend payment in the last 10 years and, in Bank of Montreal’s case, it hasn’t missed a payment since 1829! Imagine that just in the last 100 years, we had two World Wars and two market crashes — one of which brought on a worldwide depression — yet Bank of Montreal still paid its shareholders their due sum every three months.

This is the kind of track record young investors want in their portfolio.

Potash Corp. is not as old as Bank of Montreal, but it has faced challenges in recent years — specifically, the collapse of the Eastern Europe cartel in the summer of 2012, which brought potash prices down dramatically. Rather than cut the dividend and make long-term shareholders pay, management got to work to reorganise the company’s cost structure in order to maintain profitability and secure the dividend.

It is easy for a management team to claim the importance of the dividend payment, but it speaks volumes about its intent when it keeps paying during times of hardship. Like the saying goes, “Actions speak louder than words.”

A bright and secure future ahead

Both companies operate industries that won’t disappear anytime soon. Indeed, banking will become more and more essential, with the rise of the emerging market middle class, and potash remains a necessity in order to feed the world’s growing population on limited land.

There are also significant barriers to entry in these industries. Bank of Montreal, for example, is one of the few charter banks allowed to operate in Canada, and there is no indication that the federal government will allow any competitor to enter the market anytime soon.

Potash Corp.’s barriers to entry lie in the economies of scale that the company generates thanks to its size. As of 2013, its operations represented 15% of the global production of potash fertilizer. Such a size represents a distinct advantage and helps the company prevent smaller players from entering the market.

It might sound silly, but regardless of what happens techwise, we will still need a safe place to keep our money as well as food on our tables.

Adopt a long-term vision

Neither company is exciting, and looking at their stock price on a daily basis will be as entertaining as watching grass grow. Fast-forward 10 years, though, and you’ll see firsthand the benefit of starting early with robust companies that pay steady dividends. Now, imagine owning five or 10 of those great companies in your portfolio.

The post 2 Stocks With Decades of Growth Potential for the Young Investor appeared first on The Motley Fool Canada.

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So far in 2014, many hedge fund managers from John Paulson to George Soros have made bets on gold. While hedge fund holdings should be taken with a grain of salt — SEC regulation only requires them to disclose long positions — it is always interesting to see where the smart money is heading.

And if it’s going into gold, which should you invest in: Barrick Gold Corporation (TSX: ABX)(NYSE: ABX) or Goldcorp Inc. (TSX: G)(NYSE: GG)?

Below are three criteria I think are necessary to analyse before making a decision.

Historical performance

The market may be forward-looking, but that does not mean investors should completely disregard past performance especially in an industry driven by supply and demand such as gold mining. Indeed, a rigorous look at the way management operated in a full cycle can shed light on which company is operating with shareholders in mind.

Back in 2011, when an ounce of gold was selling for more than $1,600, Barrick Gold was talking about expansion programs left and right. Never mind the increase in cash cost per ounce on the newly acquired mines, because in management’s mind, the rally was not over and gold was destined to go ever higher. In retrospect, this strategy backfired immensely on the company, culminating in a massive writedown of $8.7 billion in 2013.

Meanwhile, Goldcorp was more disciplined with its investments during those years. Profitability seemed more important to management than top-line growth. The result was a much less dramatic writedown of only $1.96 billion in 2013

Balance sheet strength

The balance sheet is a snapshot of the company’s health at a certain point in time. For investors, it allows us to evaluate the strength of the company going forward. For gold miners, net debt — that is, all debt minus cash and cash equivalents — is an important metric to follow because it tells us how resilient the company is during periods of a market downturn.

As of the last quarter, Barrick Gold had $10 billion in net debt despite all the assets the company has sold since 2012. Goldcorp, on the other hand, had only $2 billion of net debt.

It is easy to see which of the two is the stronger company going forward.

Valuation

As of last Friday, Goldcorp was selling at 42 times its current earnings while Barrick Gold was selling at 34 times. On an absolute basis, neither is cheap so why bother investing?

Personally, I prefer to look at the price-to-book ratio when evaluating gold miners. Since so much of the value of these companies lies in the assets that they own rather than on the product that they sell — it is hard to differentiate an ounce of gold from another — I find that evaluating them on their assets makes more sense. Price-to-book ratio as of the last quarter was 1.04 for Goldcorp and 1.45 for Barrick Gold. In this case, Goldcorp is again the better company.

The clear winner: Goldcorp 

Judging by its historical performance, balance sheet, and valuation, it is obvious that Goldcorp is a better-run company and that it is better positioned to profit from an eventual rise in gold prices.

That being said, investing in gold miners is risky and anyone interested should avoid devoting a substantial portion of their portfolio to that sector.

The post Barrick Gold Corporation vs. Goldcorp Inc.: Which Should You Buy? appeared first on The Motley Fool Canada.

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For as long as I can remember, Canadians looking for dividend income in the telecommunication sector have always been directed to the same company: BCE Inc. (TSX: BCE)(NYSE: BCE), or Bell for those of us with a bit of grey hair.

While the 5% that BCE is currently yielding for shareholders is indeed very attractive, Telus Corporation (TSX: T)(NYSE: TU) is a much stronger dividend stock to own for the next 10 years and here’s why.

Market share gaina

The Canadian telecommunication sector is a government-made oligopoly. Indeed, the CRTC through its laws makes it almost impossible for any other big players to enter the market. This dynamic has its ups and downs.

On the one hand, consumers are faced with fewer alternatives and often end up paying more than their fair share for services. On the other hand, investors reap the juicy benefit of such little competition with increased profitability from the big three operators.

That being said, in order for any of the telecom giants to increase their revenues, they have to steal market share from each other and Telus is the clear winner. In the last quarter, the company managed to acquire 78,000 new postpaid wireless customers, leaving the rest to both BCE and Roger Communications Inc. (TSX: RCI.B)(NYSE: RCI). Those numbers are equivalent to 43% of the new business that went straight to Telus!

Best-in-class customer service

So how did Telus manage to get such a big piece of the pie last quarter? Many factors, of course, but the one that caught my eye is the low churn rate for the period — that is, lost subscribers divided by gained subscribers — of 0.90%. In the telecom world, like in any business, it is much easier and cheaper to retain existing customers than it is to gain new ones. A low churn rate helps ensure steady cash flow and stable margins, both positive for future dividend payments.

Shareholder value creation

Currently, out of three big telecom players Telus is the one with the lowest dividend yield at only 3.9%. At first glance, it might sound contradicting with the basis of this article, but a closer look shows that with an investment horizon of 10 years or more, Telus is definitely the one we want.

In the past three years, Telus increased its dividend by 11% while competitor BCE Inc. managed a 7% increase for the same period. Given the fact that Telus is taking market share from its competitors, we can anticipate a faster increase in the dividend compared to both Rogers and BCE. What is 3.9% right now may well be 6% in a couple of years.

Bottom line

Income investors should look for companies operating in sectors with strong barriers of entry and minimal potential for disruption from external factors. Telus is indeed an amazing dividend-paying stock fitting all the required criteria enumerated above, and in my view, should be a part of any dividend-focused portfolio. That being said, every investor should diversify his holdings in order to mitigate any unforeseen industry catalyst.

The post Why Telus Corporation Is a Must-Have for Dividend Investors appeared first on The Motley Fool Canada.

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Fool contributor François Denault has no position in any stocks mentioned.

Back in 2010, Canadian Pacific Railway Limited (TSX: CP)(NYSE: CP) was one of the worst run railway companies in North America. Then hedge fund investor Bill Ackman bought a substantial stake and started putting pressure for changes at the helm. He ousted board members and helped to hire a new CEO, who with the support of the new board of directors, got to work to fix the company.

That was in 2012 and since then Canadian Pacific has cut costs left and right, bringing its operating ratio closer to industry standards. Management is now comfortable enough with the level of operating expenses that it can ease off on cost cutting and focus its energy more on top-line growth.

This is good news for long-term investors and below are two reasons why I think that even at a price level close to its 52-week high, Canadian Pacific is still a solid long-term investment.

Industrywide boom

Since 2008, the demand for railcars from energy companies to car manufacturer to farmers has surged. All of these businesses want to move their goods trough rail since it is so cheap to do so. The problem, if we want to call it that, is that building additional railways or railcars cannot be done overnight. Right now, the dynamic is one where demand is much stronger than supply, but that is great news for companies like Canadian Pacific and Canadian National Railway (TSX: CNR) (NYSE: CNI) since they can charge much more for each available slot on their network.

The numbers are there to prove it, with Canadian Pacific’s revenue up 23% since 2010 while Canadian National’s is up 27%. Even better, estimates from both companies are not showing any signs of a slowdown in revenue growth in the coming years. That is because the majority of that demand comes from North American oil producers, which in the past five years have increased their oil production, transforming the U.S. into the third-biggest oil-producing country in the world.

High barriers to entry

Unlike most industries, railways have very high barriers to entry. Any competitor interested in this market would need to invest a massive amount of money just to have a network on the same scale as Canadian Pacific’s. For example, just last year the company invested $1.2 billion in capital expenditures equivalent to 16% of its total revenue.

Then there are the regulatory barriers of entry. Even if a competitor had the necessary resources, it would still need to get approval from all the governments where it wants to build a network. The sheer time-consuming aspect of this process makes any viable competition entering the market almost null.

Such a limited possibility of new competition allows Canadian Pacific to have tremendous leverage when it negotiates pricing with its clients.

Bottom line

The railway business is a great one to invest in if your time horizon is 10 to twenty years. It has strong barriers to entry, won’t be replaced by new technology anytime soon, and is currently in high demand. Canadian Pacific Railway Limited, in particular, looks very promising for the long-term investor.

The post 2 Reasons to Add Canadian Pacific Railway Limited to Your Portfolio appeared first on The Motley Fool Canada.

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Fool contributor François Denault has no position in any stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway. Canadian National Railway is a recommendation of Stock Advisor Canada.

The U.S. oil revolution has caused a tremendous increase in demand for the rail business. Indeed, the transport of oil by rail has caused a surging demand for railcars, and the supply cannot keep up. High barriers to entry and long delays on pipeline projects are two of many reasons why I think Canadian National Railway Company (TSX: CNR)(NYSE: CNI) is a strong long-term investment.

Capital intensive

The rail transport sector is one where capital expenditure just for maintenance is extremely high. For example, last quarter Canadian National spent $442 million on capital expenditures while making $1.16 billion in operating cash flows.

Considering that we are in an environment where demand is extremely high for railcars—the company has added five hundred locomotives since the back end of the recession—we can expect capital expenditures to be in the high range of management guidance of 18% to 20% of revenues. This is good news for the consumers of that service, and it keeps on adding to the barriers of entry of the sector.

Few competitors

The rail business has high barriers of entry because of the massive capital investments that are needed to build a network and the regulations in place. The price-to-earnings ratio for Canadian National is at 23 as of today, and while it is not cheap on that metric, it is much cheaper than competitor Canadian Pacific Railway Limited (TSX: CP)(NYSE: CP) whose P/E ratio is over 33.

We have to remember that an industry with high barriers of entry will warrant a higher P/E ratio. I doubt we’ll see both companies trading at a  P/E in the low teens anytime soon. Given such high valuation, both dividend yield for the moment is minuscule with Canadian National at 1.4% yield while Canadian Pacific’s dividend yields 0.7%.

Competition for crude by rail

Right now transporting oil by rail is the cheapest and fastest way in North America. The pipeline network currently in place is not built for the increases in production that the shale oil revolution brought. That being said, pipeline companies like Enbridge Inc. (TSX: ENB)(NYSE: ENB) and TransCanada Corporation (TSX: TRP)(NYSE: TRP) are busy building their network to accommodate the added supply and when completed it will take a lot of the demand away from rail cars. That is because pipelines, while being less versatile in where they can move oil, are much cheaper and much safer than using conventional rail cars.

A positive note with the added capacity of pipeline companies is that it will free up railcars for the agriculture industry, which at the moment is being left behind due to the high demand for oil. I do not think that both our railroad companies will have any trouble finding clients for their railcars in the future. At the end of the day, moving products using rails is one the cheapest methods for long cross country trips.

Dividend hike or additional share buyback?

On the last conference call, when asked about potential M&A, management reiterated that its plan is to grow the business organically. While this might be meaningless at first, with free cash flow estimated to be at $2 billion for 2014, organic growth will be easily paid for with that cash, leaving the company executives with significant cash on the balance sheet.

Considering that mergers and acquisitions are not in the works, we can anticipate either an increase in the dividend or a more aggressive completion of the share buyback program. Either way, shareholders will be rewarded.

The post Why Canadian National Railway Company Should Be in Your Portfolio appeared first on The Motley Fool Canada.

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Fool contributor François Denault has no position in any stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway. Canadian National Railway is a recommendation of Stock Advisor Canada.

In 2013, CGI Group Inc. (TSX: GIB.A)(NYSE: GIB) was in the news for all the wrong reasons. The Obamacare fiasco put the company in the middle of a heated debate with our neighbors in the south. Add to that the negative press of hedge fund investor Jim Chanos announcing his short position, and we can begin to understand why the stock is only up 12% so far this year.

Aside from that negative press, the underlying business is getting stronger and here are a couple of reasons why I like the company.

Logica restructuring

Back in 2012, CGI made its biggest acquisition in the company’s history by buying Logica PLC—a rival information technology company—and the merger is being implemented ahead of schedule. Management even announced on the last conference call that it was estimating the annualized cost synergies of the merger to meet or even exceed the $375 million target set at the beginning of the year.

European business

As of the last quarter, book-to-bill — the ratio of contracts signed divided by the contracts completed — was 108%. Anything over 100% is good because it indicates that the company can sign orders faster than it can complete them. When you take into account that in its history the company had almost all of its revenue coming from North America, having a more balanced revenue stream can only help mitigate any future economic downturn.

Additional acquisitions

During the last conference call management stated they were looking for additional acquisition. They mentioned that with the Logica merger behind them, cash flows should return to a normal level, giving the company a lot more resources. The company also took advantage of the low level of interest rates to refinance a portion of its debt with a longer maturity, strengthening its balance sheet in the event of an acquisition that would require near term resources.

As I stated in my introduction, this is not an investment for the income investor. The company is not ready to pay a dividend, and the share buyback program is not the principal focal point of management. CGI Group is a complete play on capital growth and with the stock currently trading at a 2014 forward P/E of 14, it is not overly expensive.

The post Why You Should Consider Investing in CGI Group Inc. for Capital Growth appeared first on The Motley Fool Canada.

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Fool contributor François Denault has no position in any stocks mentioned.

Here at the Motley Fool Canada, we are strong believers in investing for the long term. So here are three stocks that I believe will serve you well in the next 10 years.

They provide a mixture of both immediate income in the form of dividends and positive future prospects when it comes to increasing their earning power.

1. National Bank of Canada

National Bank of Canada (TSX: NA) has solid 3.8% dividend yield, which includes the 12% price increase the stock has had in 2014. Management seems confident about the future having increased the dividend 11% in the last three years.

Along with a good yield, National Bank is exposed to promising sectors with more than 75% of its revenues from financial markets and personal and commercial lending. In an economy where the Federal Reserve is ending its tapering program and looking to increase rates in 2015, the volatility that this will bring will be beneficial for the financial division of National Bank.

On the other hand, the increase in rates will help the personal and commercial division increase its net interest margin, which is the difference between the interest paid on deposits and received from loans.

2. Suncor Energy Inc.

Suncor Energy Inc. (TSX: SU)(NYSE: SU) is my second long-term investment prospect. This integrated oil company operates in the energy sector, giving us some diversification in our portfolio.

Suncor has a great management team that is deeply in tune with shareholder value creation, both with dividend increases and share repurchase programs. Instead of pouring money into a risky joint venture with Total SA, Suncor’s management decided to pull the plug on the project. Instead, it took the accounting impairment, increased the speed of its share buyback program and announced a dividend increase, which gives a current yield of 2.56%

For long-term shareholders, this is great news, especially coming from a company that hasn’t missed a dividend payment in the last 20 years.

3. Pan American Silver Corp.

My third and final investment prospect gives us exposure to the natural resource sector. Pan American Silver Corp. (TSX: PAA)(NASDAQ: PAAS) operates as a silver and gold mining company with operations mainly in South America.

Now, while precious metals might be more volatile than a financial institution or an oil company, the strength of Pan American Silver lies in its strong dividend culture. Throughout the cyclical downturn for the sector in 2012-2014, the company never stopped paying a dividend and at one point was yielding over 4%.

Since October 2013, the stock has rallied and the dividend yield is now at 3.62%, but that is still a great income generator. Management has often said on conference calls that the dividend payment was an important part of the culture of the company, and that operational decisions were taken accordingly to maintain the dividend payout.

The prospect of silver in the future is also quite promising given the amount of electronic devices we own. This is because silver is the best electrical conductor known to man.

The post 3 Dividend-Paying Stocks for Long-Term Investors appeared first on The Motley Fool Canada.

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Fool contributor François Denault has no position in any stocks mentioned.

It is no secret that in Canada, the majority of the high-dividend-paying companies come either from the telecommunications or financial sectors. Just like capital appreciation portfolios, diversification is important for income portfolios too.

That being said, here are two companies exposed to commodity resources that warrant a place in any income investor’s portfolio.

Suncor Energy Inc.

Disciplined investments, a shareholder-oriented culture, and high barriers to entry make this integrated oil company a strong contender for any income investor.

In the last five years, Suncor Energy Inc. (TSX: SU)(NYSE: SU) managed to increase its dividend by 34% to an estimated $1.02 per share in 2014. This is amid the lower capex announced by management last quarter and the decision to increase shareholder returns through both accelerated share buybacks and further dividend increases.

This is positive news, but not so positive for companies operating in sectors that are prone to intense competition, as their dividends might be at risk. This is not the case for Suncor, as its operations revolve mainly around the oil sands in Canada. Not only are there intense political barriers to entry given the regulation necessary to operate in those fields, but there are also natural barriers to entry in the shape of limited mines available for development. Technology is also a big factor in protecting the future income of the operating businesses already in the oil sands.

All these factors are enough to ensure there won’t be dozens of competitors in the future coming to exploit the oil sands where Suncor operates.

Agrium Inc.

The second commodity-exposed dividend income stock is Agrium Inc. (TSX: AGU)(NYSE: AGU). This company is involved in the production of fertilizers and other products for farmers. While not as robust in terms of barriers to entry as Suncor, throughout the years there has been an important consolidation of companies in this sector, as well as the creation of cartels like Canpotex Limited.

Like Suncor, Agrium’s management has increased the dividend substantially in the past five years. Indeed, the company’s dividend has increased 90% since 2009, giving investors a current yield of 3.22%. While this is nowhere near close to BCE Inc.’s 5% yield, we have to remember that just as in capital appreciation portfolios, income investors must diversify their income-generating companies. A 3.2% yield from a company operating in a cyclical business is excellent, and the underlying macro factors are promising for the future.

Indeed, the United Nations estimates that the world’s population will increase by three billion by 2045, which means that the world needs to double its food production. Add to that the ever-growing middle class in emerging markets that will require a diet closer to what we have in the developed world, and you can easily guess that the underlying economics of Agrium’s business are really healthy for the long term.

The bottom line

Just as investors looking for capital appreciation should not put all their money int0 the same stock, neither should those looking for income.

Instead, investors should focus on building a strong and properly diversified foundation consisting of dividend-yielding stocks spread out across many different sectors. That way you can mitigate the risk of volatile streams of income.

The post 2 Stocks for the Income Investor: Agrium Inc. and Suncor Energy Inc. appeared first on The Motley Fool Canada.

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Fool contributor François Denault has no position in any stocks mentioned. Agrium is a recommendation of Stock Advisor Canada.

Base metals were hardly the talk of the investing community in recent years due to a multiple of factors including diminishing demand. For the long-term investor, this lack of interest might present an opportunity to buy at an attractive price.

Listed below are three reasons why I think First Quantum Minerals Limited (TSX: FM) belongs in your portfolio.

1. Great operator

The recent headwinds for miners have been challenging to say the least. Companies have had to sell mines at substantial discounts to fair value just to keep their heads above water. This storm was caused by a mix of unsustainable price increases and undisciplined investments from certain miners.

However, First Quantum has been cautious and invested in great assets that should bear fruit in the future.

Rarely have its projects exceeded cost estimates — quite a feat in this industry — nor has management paid unreasonable prices for assets. This is demonstrated by the low net debt of $3.35 billion and $1.43 cash cost per lbs of copper as of 2013. Both of these metrics are expected to go up, albeit slightly for 2014 while still staying at the bottom range of its peers.

2. Exposure to the industrial sector *

While First Quantum produces the majority of its revenues from copper—producing 412 281 tonnes in 2013–it also has exposure to additional industrial metals like zinc and to a lesser extent silver.

Copper is renowned to be used in a myriad of industrial uses—mainly construction–silver is less known, but the application for silver will only go up in the future in part because it is the best electrical conductor known to man at the moment. You can find traces of silver in every smartphones, tablets, personal computers and even solar panels.

In 2013, the company acquired Inmet Mining Corporation and at the same time acquired the Cobre Panama project. Previously, Inmet Mining Corporation had struck a deal with Franco-Nevada Corporation (TSX: FNV)(NYSE: FNV) to sell the gold and silver extracted from the mine in exchange for financing. While not as substantial as the copper reserves the Cobre Panama project will bring to the company, having a well-diversified stream of income from different metals should be beneficial. The Cobre Panama mine is scheduled to become operational in the fourth quarter of 2017 if everything goes according to plan.

3. Haquira deposit

The Haquira deposit in Peru contains one of the largest unexploited copper deposits in the world. First Quantum began work in 2014, but mine development has been put on hold to better manage population relocation and environmental care.

The Haquira deposit is estimated to hold in excess of 2 billion tonnes of copper, so while news of the stoppage is not ideal, making sure that the local population is treated fairly is the right thing to do for the long term.

The bottom line

Base metal miners might not be the talk of the town right now, but the world’s economy is slowly getting back on its feet. Consumers around the developed world should start spending again while the emerging markets will need to continue investing in strategic infrastructure to keep up with the growth of their economies. Both of these factors will indirectly benefit the company.

There is value to be found in First Quantum Limited for the long-term investor.

* Editors note: A previous version of this post contained some erroneous production information in section 2. We apologize for any issues this may have caused.

The post Why First Quantum Minerals Limited Is a Solid Long-Term Investment appeared first on The Motley Fool Canada.

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Fool contributor François Denault has no position in any stocks mentioned.

Two weeks ago, the U.S. Department of Agriculture (USDA) published its world agricultural supply and demand estimates and record volumes of all types of crops are projected for 2014.

This growing supply of crops is great news for Agrium Inc. (TSX: AGU)(NYSE: AGU).

Let me explain…

1. Nutrients and crop protection

Unlike fellow Canadian company Potash Corp./Saskatchewan Inc. (TSX: POT)(NYSE: POT), Agrium is exposed to not only the fertilizer business, but also crop protection. This allows the company to deliver a more diversified stream of income and weather unplanned disruptions like the Uralkali-Belaruskali broken potash cartel back in the summer of 2013.

Having a company that is exposed to more than one sector is great for long-term investors since it allows us to sleep better at night knowing that our company’s diversification allows it to better manage events out of its control.

Agrium is also more exposed to nitrogen fertilizer than potash at the moment, though future mining projects should increase its potash production. Nitrogen production is deeply connected to natural gas, and with prices nearing an 11-year low, Agrium should be able to turn a good profit from this division.

On the crop protection side of the business, the acquisition of Viterra Inc.’s 210 retail outlets will allow the company to increase its retail presence in Canada and expose farmers to the benefits of its product line. Given the finite amount of land that farmers have, being able to diminish production losses due to bad seeding is essential.

2. Growing worldwide population

The world’s population has never been so high and it’s going to continue climbing. The United Nations estimates that the world’s population will increase by 3 billion by 2045, which means we need to roughly double the world’s current food production.

Add to that the growing middle class in emerging markets that will require a diet closer to what we have in the developed world and you can easily guess that the underlying economics of Agrium’s business are extremely healthy for the long term.

3. Healthy dividend

Not only are you getting exposure to a sector in full expansion, but Agrium will also pay you 3.2% to hold on to its stock. This is a great addition for income investors considering that the 10-year government bond is currently yielding 2%.

Granted on paper there is more risk in holding Agrium shares over a 10-year note from the Canadian government, but the company hasn’t missed a payment in the past 10 years.

Management seems confident in the future of the business, having increased the dividend by 90% in the last five years.

The post Three Reasons to Get Excited About Agrium Inc. appeared first on The Motley Fool Canada.

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Fool contributor François Denault has no position in any stocks mentioned. The Motley Fool owns shares of PotashCorp. Agrium is a recommendation of Stock Advisor Canada.