MFC:CC - Yield Today Growth Tomorrow: 3 Stocks to Keep Building Your Wealth

2024-06-21 17:00:00 ET

For investors looking for top dividend stocks to buy for their yield today, and their growth prospects moving forward, the good news is that there are plenty of options to choose from. The Canadian market is one that’s chock full of top options in high-yielding sectors, making the list of opportunities a potentially daunting one for income investors.

That said, some opportunities are better than others. The three companies I’ve highlighted below each provide what I think are some of the best yields in the market, supported by some of the best long-term outlooks out there.

Without further ado, let’s dive into three top dividend stocks long-term investors may want to consider to grow their wealth.

Dream Industrial REIT

Among the top dividend stocks I think could provide the best upside in this current environment is Dream Industrial REIT ( TSX:DIR.UN ). As its name suggests, this top Canada-based REIT focuses on industrial real estate. You know, the warehouses and distribution centres that run the North American economy.

The trust owns and operates some of the best industrial properties situated in prime locations across Canada and the U.S. If we do see a real estate slowdown, many sectors of the economy and real estate market could suffer. But I do think industrial real estate will hold up much better than other asset classes, due to the strong secular tailwinds supporting these assets.

Dream Industrial’s recent Q1 results were strong, with the company seeing net operating income grow 7.7% year-over-year and rental income tick up 5.4% over the same time frame. With a yield of 5.7%, this is a top real estate option I think investors can buy and sleep soundly at night. That’s not so easy to find in the real estate sector these days.

Enbridge

For investors seeking a lot more yield, Enbridge ( TSX:ENB ) remains my top high-yield option to consider right now. With a dividend yield of 7.7% , this top North American pipeline operator seems well-positioned to see continued growth long term, as a heightened focus on energy security becomes even more prescient in this geopolitical climate.

As Canada and the U.S. seek to solidify their energy-independent model, Enbridge’s network of existing pipelines stand to benefit. Additionally, various expansion projects may come under less scrutiny moving forward, providing the additional capacity that could drive continued cash flow growth over time.

On the financials front, Enbridge continues to perform well, bringing in US$0.67 per share in GAAP earnings during Q1. As the company continues to see strong cash flow growth (growing 9% year-over-year this past quarter), I expect its yield to drop over time as investors pile in. Thus, this could be a top buying opportunity many investors are overlooking right now.

Manulife Financial

Moving onto the insurance space, Manulife ( TSX:MFC ) continues to remain a top pick of mine for dividend investors seeking a company trading at a reasonable valuation. In addition to its core life insurance business, Manulife is also a top provider of wealth management products and has seen strong uptake in global markets in recent years, particularly in China.

One of the big three insurance companies in Canada, Manulife serves more than 35 million customers, generating strong cash flow growth. And while Manulife’s cash from operating activities did decrease on a year-over-year basis this past quarter, strong annualized premium equivalent growth of 21% this past quarter should support a renewed growth outlook in the coming quarters as comps improve.

It’s my view that these three dividend stocks are top options for long-term investors looking to grow their wealth long term. For those taking a medium- to long-term approach to building their portfolios, these Canadian dividend stocks provide the potential for portfolio outperformance.

The post Yield Today, Growth Tomorrow: 3 Stocks to Keep Building Your Wealth appeared first on The Motley Fool Canada .

Fool contributor Chris MacDonald has positions in Enbridge. The Motley Fool recommends Dream Industrial Real Estate Investment Trust and Enbridge. The Motley Fool has a disclosure policy .

2024