3 boring but fantastic dividend stocks to buy
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While volatile and exciting stocks can have the potential to get you rich quick, the chances are relatively slim. On the flip side, boring but reliable dividend stocks could indeed make you rich if you invest a decent amount and give them enough time. There are many such boring but fantastic dividend stocks. Here are three that you may want to consider before the others.
An energy giant
Enbridge (TSX: ENB) (NYSE: ENB) is not just a energy store; it’s the energy stock in Canada and the largest energy company in the country that operates an extensive network of pipelines across North America. But investors love Enbridge for more than just its leadership position in the energy industry and relatively secure pipeline operations.
Enbridge is popular with its investors primarily because of its dividends. The generous 6.6% return is more an effect of its large payout increases and less a by-product of the valuation declines, which is about 5% away from its pre-pandemic peak. The long-term dividend aristocrat not only supported, but also increased his payouts during one of the worst years for the energy industry (2020).
Thanks to the oligopoly, giants like AEC (TSX: BCE) (NYSE: BCE) faces relatively little competition in the telecommunications industry. This promises relatively stable revenues and steady growth opportunities, which have only increased since the rollout of 5G. The 5G technology is expected to be the next big event in the global telecom industry and is expected to be linked to other breakthrough technologies such as the Internet of Things (IoT).
This stability is one of the reasons why the ECB did not fall too much during the stock market crash. The stock has fallen by around 26% and is already 2.8% above its pre-pandemic peak. But even the impressive 40% growth since the crash did not affect the return too much, which is still 5.4%. And since BCE is also a dividend aristocrat, you can expect your payments to continue to grow for the foreseeable future.
An asset management company
Brookfield Asset Management (TSX: BAM.A) (NYSE: BAM), with its market capitalization of $ 107 billion, is one of the largest companies currently trading on the TSX. And it’s also a more attractive dividend-paying stock because of its potential for capital growth than its dividends. The company is offering a very low return of 0.76%, which is too low to tip the scales in its favor.
The boring aspect of this action stems from its potential for reliable capital growth. The stock has grown fairly steadily over the past decade and offers a 10-year compound annual growth rate (CAGR) of 21%, which is a pretty appealing number, especially when compared to the paltry return. And while the stock is a bit overpriced, it’s a steal at its current value if it manages to maintain its growth rate for the next two or three decades.
The two Dividend Aristocrats, Enbridge and BCE, are typical boring aristocrats who currently offer surprisingly high returns. And if you buy now, you can lock in those current returns. While the two may not offer significant growth potential, you can balance it with Brookfield Asset Management, a dividend stock that is a better buy for its growth than dividends.