Investing is never entirely free from stress, but you can build a dividend stock portfolio that does mitigate stress. When you retire, you want to think about the golf course (or whatever makes you happy), not your investments. So, an ideal strategy is to buy high-quality stocks that you can set and forget.
Look for steady earnings growth for reliable dividend growth
The key to this strategy is to look for stocks with sustainable, growing earnings that also support sustainable, growing dividends. A high dividend yield (+8%) might seem tempting. However, excessively high yields often indicate problems in a business and that the dividend is not sustainable.
That is why a lower dividend yield that is growing at an attractive pace can present a better risk/reward scenario. If you are looking for some lower-stress dividend investments, here are three to have on your radar.
A top real estate stock
Granite Real Estate Investment Trust (TSX:GRT.UN) is one of the most defensive real estate stocks you can buy. It owns 142 high-end industrial and logistic properties across North America and Europe. The properties have +99% occupancy, long-term lease (+6-year average lease term), and largely investment grade tenants (like Amazon, Walmart and Magna).
Granite stock earns a 4.4% distribution yield. It has grown its dividend annually for over 10 years. This dividend stock has a payout below 80%. That indicates that its current distribution is safe.
For a REIT, Granite has an excellent balance sheet with a debt-to-equity ratio around 30%. While interest rates are rising, Granite’s rents have been rising at an even faster pace. Investors could continue to enjoy mid- to high single-digit growth ahead.
A top transport stock for growing dividends
Canadian National Railway (TSX:CNR) has been delivering a steady stream of growing dividends and solid capital returns for decades. While economic worries have temporarily pulled the stock back, it may present an opportunity to buy this stock at a more attractive valuation.
Canadian National has an exceptional network that spans across Canada and down through America. It is a crucial engine for moving goods in the North American economy. Over long periods of time, it has persistent pricing power and strong competitive moat.
CNR stock only pays a 2% dividend. However, it has grown that dividend by a +12% annual pace. With a payout ratio of 40%, CNR can afford to invest in its network, steadily grow its dividend, and buyback stock. CNR stock has an attractive formula for long-term total returns.
We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if WELL Health made the list!
A health stock with a rising dividend
Jamieson Wellness (TSX:JWEL) is an intriguing healthcare stock for growth and income. Jamieson owns some of Canada’s largest vitamin and supplement brands.
Go to any grocery store and you will see its prominent position. After the COVID-19 pandemic, people are increasingly aware of preventative health and that should be a tailwind for Jamieson.
Jamieson recently made a major acquisition in the U.S., and it created several investment and distribution partnerships in China. These are some of the largest supplement markets in the world and could fuel longer-term growth opportunities.
Jamieson yields 2.25% today. Likewise, it trades with a price-to-earnings ratio of 20, which is the lowest it has been in five years.
It has grown its dividend by a 19% compounded annual growth rate since its initial public offering. It has a payout ratio of 40%, which indicates that it can afford to invest in growth and likely increase its dividend as well.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
