2 TSX stocks that could make you rich
Some people find it unrealistic that you can get rich on the stock market. However, financial experts argue that you can accumulate wealth or create a small fortune by investing in dividends. Plus, the strategy is simple. Choose a company with a long history of consistent dividend payments.
Besides the choice of investment, the key to achieving the goal is the holding period. You need to be prepared to hold stocks for the long term, say 10 to 15 years or maybe longer. Sometimes it is enough to invest in one or two companies to realize the power of capitalization.
Manulife Financial (TSX: MFC) (NYSE: MFC) and TC Energy (TSX: TRP) (NYSE: TRP) are well-established dividend companies that Canadians may consider considering either in the third quarter of 2021. These companies are mainstays in industries that have seen booms. best and worst times. The life insurer is 134 years old, while the pipeline company has been around for seven decades.
Top 25 Global Insurance Brands
According to BrandFinance data, Manulife is ranked 25th in the Insurance 100 2021 ranking. The Toronto-based company was in 30th place in 2020. Its current market capitalization is $ 46.57 billion. The good news is that the life insurer got off to a good start this year.
In the first quarter of 2021 (quarter of March 31, 2021), the highlight of the quarter was the 67% increase in basic profit to $ 1.6 billion from the first quarter of 2020. However, net profit fell at $ 783 million versus $ 1.29 billion. Roy Gori, President and CEO of Manulife, said rising risk-free rates and the steepening of the yield curve in North America impacted net income for the quarter.
Phil Witherington, CFO of Manulife, highlighted New Business Value (VNB) in Asia and the United States. In addition, its Global Wealth and Asset Management business generated net inflows of $ 1.4 billion during the quarter. Asia is the engine of growth following the 32% increase in NBV compared to the same period in 2020.
A leading insurer like Manulife is risk averse and constantly pays attention to risk factors. This insurance share also belongs to the Dividend Aristocrat group of the TSX. At $ 23.98 per share, the dividend yield is a juicy 4.67% (payout ratio of 41.95%).
Long-lived infrastructure assets
TC Energy prided itself on having financial strength and high quality diversified assets. The core businesses of this $ 60.33 billion energy infrastructure company are pipelines, power plants and storage facilities. It supplies energy to end users in Canada, the United States and Mexico.
Management also claims 21 consecutive years of dividend increases since 2000 and an average annual return of 12%. As of July 16, 2021, the stock price was $ 61.63, while the dividend yield was 5.65%. Current investors are up 22.55% year-to-date.
The energy industry is volatile at times, although TC Energy’s business model is in fact low risk. Its long-term contracts are entered into with first-rate counterparties. Management expects EBITDA by 2024 to increase by a CAGR of 8%. According to OilPrice.com, TC Energy is one of the most valued energy companies in Canada. The action should benefit from the rapid recovery in oil prices and the absence of the threat of a price war.
Investing in dividends is a proven and reliable method of building wealth. Well-run, cash-generating companies like Manulife and TC Energy can help you build wealth over time. Keep inventory in your basket for years and reap the harvest on time.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We are straight! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer, so we post sometimes articles that may not conform to recommendations, rankings or other content. .
Foolish contributor Christopher Liew has no position on any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.