Y:CC - Beyond Enbridge: 2 Stealthy Wealth-Building Stocks
2023-10-10 17:00:00 ET
Blue-chip or large-cap stocks are typical investment options for wealth creation or building a sizeable nest egg. Enbridge ( TSX:ENB ) is a no-brainer buy in Canada’s oil & gas midstream industry . Besides the high 8.2% yield, the $92.5 billion pipeline operator and industry heavyweight has raised its dividend for 27 consecutive years.
While the top-tier energy stock is an ideal core holding for long-term investors, Superior Plus ( TSX:SPB ) and Yellow Pages ( TSX:Y ) are excellent second-liners . Both stocks fly under the radar but are wealth builders like Enbridge for their attractive yields and safe dividend payouts. Also, the share prices are less than $12.
Established distribution businesses
Superior Plus is a leading distributor of propane and compressed natural gas in North America, serving residential, commercial, utility, agricultural, and industrial customers. The $2.48 billion company also provides renewable energy and related products and services. In the U.S., Superior Plus is the fourth-largest retail propane distributor.
At $10.07 per share, you can partake in the juicy 7.2% dividend yield. With the annualized dividend per common share of $0.72, 1,000 shares will produce $180 in passive income quarterly. The operating model provides stable free cash flow, and the stock sustained dividend payments since 2009.
Superior Plus is well positioned for future organic growth after acquiring low-carbon energy solutions provider Certarus on May 31, 2023. According to management, the transformative acquisition complements the energy distribution platform.
In the first half of 2023, net earnings increased $51.3 million or 91.6% year over year to $107.3 million. Superior Plus’s president and chief executive officer (CEO) Allan MacDonald expects the propane-distribution businesses to continue delivering good results with solid contributions from the Certarus team.
Profitable digital and marketing business
Don’t mistake the business directory business to be old school or obsolete. Yellow Pages Limited continues to foster business relationships by leveraging the power of digital marketing solutions and networks. Its suite of apps, websites, and print media helps businesses engage their customers, reach new audiences, and attract more clients.
The $219.98 digital media and marketing company takes pride in NetSync. It built the automated listing information syndication service specifically for small businesses. The single-point-of-entry design or self-serve portal enables businesses to update their business information, opening hours, contact info, and rich content such as photos and videos.
NetSync’s partner network comprises all company-owned properties, including over 40 digital properties. Approximately 40 million people visit the network monthly. The online, mobile and print advertising products help businesses capture more leads and rise above competition.
Notably, Yellow Pages is profitable, as evidenced by the average net income of $149.5 million in the last four years. If you invest today, the share price is $11.79, while the dividend yield is 6.84%. You only need to invest $5,895 (500 shares) to generate $101.25 every quarter. Your dividend earning is tax-free if you hold the stock in a Tax-Free Savings Account.
Wealth builders
A Dividend Aristocrat like Enbridge is a no-brainer buy for long-term investors and dividend earners, including retirees. However, either Superior Plus or Yellow Pages can be backup wealth builders. The respective businesses are stable and could sustain the hefty quarterly payouts.
The post Beyond Enbridge: 2 Stealthy, Wealth-Building Stocks appeared first on The Motley Fool Canada .
Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge, Superior Plus, and Yellow Pages. The Motley Fool has a disclosure policy .
2023