2 Top Dividend-Growth Stocks to Buy in 2020

One of the surest paths to achieving investing success is to invest in high-quality stocks that have a long history of paying regularly growing dividends. This is because they typically have reliable earnings, possess wide economic moats, which protects them from competition, and operate in recession-resistant industries. Those companies also have solid balance sheets and are financially healthy, allowing them to consistently pay regularly growing dividends. Here are three attractively valued companies with long histories of paying steadily increasing dividends from growing earnings. Diversified infrastructure provider Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP) owns a globally diversified portfolio of infrastructure, including railroads, toll roads, energy utilities, and ports, which are crucial to economic activity. The partnership has hiked its distribution for the last 12 years to see it yielding a juicy 3.8%, and that payment is sustainable with signs that there are further increases ahead. Brookfield Infrastructure operates in oligopolistic markets with steep barriers to entry that are heavily regulated. This not only protects it from competition but allows it to operate to an extent as a price maker rather than price taker, enhancing Brookfield Infrastructure’s ability to grow earnings. Demand for most of the infrastructure that the partnership owns is relatively inelastic, which — along with the regulated and contracted nature of Brookfield Infrastructure’s earnings — makes it resistant to economic downturns. Brookfield Infrastructure reported some solid third-quarter 2019 numbers compared to the equivalent period in 2018, including a 16-fold increase in net income to US$82 million, and that funds from operations (FFO) had grown by 22% to US$338 million. The business’s earnings will continue to grow at a steady clip, because of recently completed transactions and two needle-moving deals currently underway, the US$2.6 billion purchase of Cincinnati Bell and US$8.4 billion acquisition of railroad operator Genesee & Wyoming. Those deals, along with Brookfield Infrastructure’s focus on capital recycling, where it sells mature assets and uses the proceeds to make accretive opportunistic acquisitions, will support its plans to expand its distribution by 5-9% annually. As the partnership’s earnings and distribution grow, its stock will rally further, making now the time to buy. Diversified renewable energy utility Renewable energy utility Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) performed strongly during 2019, gaining a healthy 36%, beating the 19% return generated by the S&P/TSX Composite Index. Like traditional electric utilities, Algonquin possesses a wide economic moat and is an ideal income-generating defensive stock. It has hiked…

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Shopify (TSX:SHOP): How Far Can This Stock Go in 2020?

There is no correlation between what analysts have in their models about the future price of Shopify (TSX:SHOP)(NYSE:SHOP) stock and where it’s trading now. According to analysts’ consensus price estimate for Shopify, the stock should be trading around $200 in the next 12 months. But when you look at the current price of Shopify stock, which hit $588 yesterday, you will realize that there is a big disparity, and analysts have a lot of catching up to do. So, what’s driving this massive rally in Shopify stock, which has soared 181% in the past 12 months and more than 40% in just two months? Let’s start with a broader picture in the e-commerce space. Shopify provides an e-commerce platform to both small and large companies to help set up their online shops. U.S. shoppers spent more online during this year’s holiday shopping season, a report by Mastercard showed last month, with e-commerce sales hitting a record high. E-commerce sales this year made up 14.6% of total retail and rose 18.8% from the 2018 period, according to Mastercard’s data tracking retail sales from Nov. 1 through Christmas Eve. That cyclical shift to online from mall-based shopping is helping almost all top technology companies whose stocks are hitting record highs. Shopify, with its platform strength and its global appeal, remains the top pick for investors who want to have a quality e-commerce stock in their portfolio. Shopify’s growth plans  Another factor that’s fuelling these gains is that the consumer spending remains strong in North America, and the future also looks bright after both the U.S. and China signed a deal for the first phase of their trade pact, removing a major drag that growth-oriented stocks were facing since last year. For the company’s future growth, investors are also quite bullish, especially about Shopify’s plan to set up a network of fulfilment centres in the U.S. to help merchants using its platform deliver products more quickly and cheaply. The Ottawa-based company, which processes millions of individual sales by hundreds of thousands of merchants every year, plans to pool shipments from different online stores together, making shipping cheaper and more efficient, just like Amazon does. That ecosystem will provide Shopify another strong revenue stream. The improvements have also helped attract new users to the platform, and Shopify said it now has more than one million merchants around the world. Bottom line Shopify stock is…

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Forget Pot Stocks: Buy These 2 Growth Companies Today

Over the last few years, for any investor that had a little play money and wanted to try and find a stock that would increase rapidly in a short period of time, pot stocks were your best bet. Now that the industry has been established and reality has set in, pot stocks present a quality long-term opportunity, but if you are looking for a short-term, super-growth stock, you’ll have to look elsewhere. There are a number of companies that seem like they could be the next great thing, but few make it. This is why the stocks offer such great value in the first place, because the risk is generally a lot higher than other companies you can buy. You can mitigate that risk by making sure the company you invest in has all the fundamentals and tools to be successful, and when you do find a winner, the profits can be substantial. Two of the top growth opportunities today, that have the best potential of being the next big thing, are Score Media and Gaming (TSXV:SCR) and Drone Delivery Canada (TSXV:FLT). Score Score Media and Gaming is an exciting opportunity, taking advantage of the newly legal sports gambling industry in a number of U.S. states. This isn’t just a simple start-up creating a company and going into the States. Score Media and Gaming has long had one of the top sports news apps in the world with it’s The Score sports app. This puts it in a unique position of being an established media company that’s decided to diversify into the sports betting industry. It continues to grow in popularity and, most recently, had nearly 275 million average monthly sessions in the last quarter, with each average user opening the app 75 times a month. Score has leveraged this major platform of customers it has and is using it to drive synergies with the sports betting industry. In addition, it’s also expanded its media business to find newer and creative ways to acquire more users. Gambling is an industry that’s stood the test of time, and now that you can bet on sports, also a growing segment of the entertainment industry, an investment in Score offers investors an extremely exciting opportunity. The stock had a major jump in 2019 and is up more than 175% in the last 12 months, but that’s just the tip of the iceberg, and, with Score’s massive customer reach,…

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2 Dividend Champions to Buy in 2020

An economic moat refers to a business’s ability to retain a competitive advantage, which allows it to remain dominant in its industry and protect its earnings from competition. Identifying companies with wide, almost insurmountable moats is a key aspect of dividend investing that many investors ignore to their detriment. Companies with wide moats possess many characteristics that indicate that they have strong businesses with consistently growing earnings, giving them the ability to reward investors through regular dividend hikes. That means they can deliver a return in excess of inflation and the risk-free rate of return. Here are three top dividend-paying stocks with wide, almost impregnable moats that have a long history of rewarding investors with regular dividend hikes and capital appreciation. Boring electric utility Utilities are perceived to be boring defensive stocks that are relatively immune to economic slumps. While this may be true, there is a lot to like about electric utility Fortis (TSX:FTS)(NYSE:FTS). It has hiked its dividend for an amazing 46 years straight to now have a 3.5% yield, and it has gained an impressive 21% over the last year. A payout ratio of just under 50% indicates that the dividend is not only sustainable, but there is room for further increases, even if earnings grow at a modest rate. Fortis possesses a multilayered economic moat that virtually guarantees its earnings. This includes demand for electricity being relatively inelastic, because it is an essential source of energy in modern society. There are also steep barriers to entry, including significant regulatory and capital requirements, for the electric utility industry. Most of Fortis’s income is generated from contracted or regulated sources, making its earnings highly reliable. These characteristics not only protect Fortis from competition but also economic downturns, making it an ideal defensive dividend stock for any income-focused portfolio. A $10,000 investment in Fortis 10 years ago would now be worth $28,000 if dividends were reinvested. This represents a return of 180%, or a compound annual growth rate (CAGR) of almost 11%, highlighting the solid returns that even a low-growth and less-volatile stock like Fortis can generate over the long term. That return is significantly higher than Canada’s annual average inflation rate for the last 10 years of just under 2%, indicating that Fortis is delivering considerable value for shareholders.  Integrated energy major Another dividend champion to consider is integrated energy company Suncor Energy (TSX:SU)(NYSE:SU), which has increased its dividend…

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2020 TFSA Contribution Room: Here Are the Best Stocks to Buy

Deciding what to do with your new TFSA contribution room is not always an easy decision, and it shouldn’t be. The amount of TFSA contribution room each investor gets is scarce and can play a major role in your investing future, whether you take full advantage of its tax-free nature or not. Because of this, investors should take their time deciding how to allocate their capital to put it to work to the best of your ability. There are a number of quality stocks you can consider depending on your investing timeline and existing portfolio weighting, but if it were me, I’d split my $6,000 and invest it in these two top companies: AltaGas (TSX:ALA) and Dollarama (TSX:DOL). Both companies offer investors significant growth potential over the coming years, while also being decent defensive companies in the case of a short-term market correction or recession. AltaGas is defensive because it’s a utility and a crucial company to the energy industry in Western Canada. Dollarama can be considered defensive because its entire business revolves around it selling inferior products to consumers, especially consumers incentivized to shop at its stores to save money. Despite both being quality, defensive plays that can protect your capital during a short-term downtrend, they each have major growth opportunities, which is a major reason why they are such great long-term investments. AltaGas just recently commenced exports at its Ridley Island Propane Export Terminal (RIPET), which is one of its most significant projects. The RIPET is expected to help bring Canadian energy to new markets in Asia, which will help producers realize considerably higher net backs on the energy they are producing, which will be key for the whole industry in addition to being a great growth project for AltaGas. Dollarama too has some exciting growth opportunities, with the number one opportunity being its stake in growing Latin American dollar store chain Dollar City. When looking at what each company has done over the past few years, it’s hard to decide which is more incredible. AltaGas has been selling off non-core assets to reduce its debt load. At the same time it’s been selling these assets, though, it’s actually been growing its EBITDA. This has helped it to reduce its net debt to EBITDA ratio twofold by decreasing its debt and increasing its EBITDA, which has resulted in AltaGas being in a much stronger financial position. For Dollarama,…

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Canadians: 3 Stocks That Will Help You Retire Rich

Back in the summer of 2019 I discussed several strategies that investors should pursue in order to guarantee a comfortable retirement. A recent Royal Bank survey revealed some interesting myths about retirement. For example, while many pre-retirees plan to work in retirement, less than 15% of actual retirees said that they had returned to part-time or full-time work. Today I want to look at three stocks that boast nice income and the potential for continued capital growth that can drive gains in a retirement portfolio for years to come. Let’s dive in. BCE BCE (TSX:BCE)(NYSE:BCE) is one of the top Canadian telecoms. The telecom sector offers stability for investors, but the trade-off tends to be limited growth. This expectation was subverted in 2019 as telecoms performed well. Shares of BCE have climbed 16% year over year as of early afternoon trading on January 17. Investors can expect to see BCE’s fourth-quarter and full-year results in early February. In the third quarter, BCE reported record wireless net additions of 204,067 which is up 14.8% from the previous year. Adjusted EBITDA rose 5.6% year over year and net earnings grew 6.3% to $922 million. The stock last paid out a quarterly dividend of $0.7925 per share. This represents a 5.1% yield. Fortis When the market turned in late 2018 I suggested that investors should pile into Fortis (TSX:FTS)(NYSE:FTS). Fortis stock has climbed 25% from the prior year. Like telecoms, utilities also enjoyed an impressive year in 2019. With low interest rates seemingly here to stay in the near term, I still love Fortis as a hold to start this decade. There is reason to get excited about Fortis in the front half of the 2020s. Its five-year capital expenditure plan of $18.3 billion will stretch from 2020 to 2024 and is expected to greatly expand Fortis’s rate base. This, in turn, will support annual dividend-growth of 6% through the end of the period. Fortis last increased its quarterly dividend to $0.4775 per share. This represents a 3.4% yield. It has delivered dividend-growth for 46 consecutive years. Canadian Imperial Bank of Commerce Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) stock suffered a retreat after the release of its fourth quarter results in December 2019. Earnings fell from the prior year in several key segments, although its U.S. segment continued to post strong growth. The stock had only climbed 5.8% year over year at the…

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1 Canadian Real Estate Stock to Buy in 2020 and Never Sell

If you are bullish on Canadian real estate today and would like to partake in the lucrative investment returns that the sector’s listed names have been rewarding investors with for decades, but you are conscious of the energy-draining exercise of trying to individually select the best sector names to pick on the TSX and the frequent hustle of having to update yourself on each ticker every other quarter, then you may want to consider this investment below. It’s a professionally managed exchange-traded fund (ETF), it’s diversified, it offers access to a wide selection of the best industry names, and it has historically performed very well. To top it all, it pays nice monthly distributions and an occasional capital gain distribution. Vanguard FTSE Canadian Capped REIT Index ETF (TSX:VRE) is a passively managed ETF that offers investors diversified exposure to some of Canada’s best-performing real estate management firms with its investments in large-cap, mid-cap, and small-cap entities. The fund passively tracks the FTSE Canada All Cap Real Estate Capped 25% Index, targeting full replication of the index. Due to it being passive managed, you don’t pay hefty management premiums. Resultantly, the fund has one of the lowest management expense ratios among the best ETF names. Vanguard’s management fee is as low as 0.35%, and the management expense ratio stands at just 0.39%. Management expenses don’t always come this low on similar high-performing investments. Since inception in November 2012, VRE has turned a $10,000 equity investment into a nice $17,758.08, and the unit price has grown an average of 9.4% annually, supported by the strong performance of its constituent securities, which have averaged an 11.2% earnings-growth rate over the past five years. Monthly distributions paid during the past 12 months yielded 5.15% through to December 31, 2019, but there can be some unusual payouts on top, like a hefty $0.75-per-unit distribution at year-end, which was mailed on January 8 this year. If the usual monthly distribution of $0.095 per unit, which was paid in 2019, is carried over into 2020, it could yield a respectable 3.1% before any capital gains distributions for the year. Despite what the fund’s name implies, it isn’t an all-REIT portfolio. The portfolio has investments in other places too. Under 80% of the portfolio holdings are actually REITs, and 11.6% is invested in real estate services firms, while another 9.2% is deployed in real estate holding and development…

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Forget Oil Stocks: Invest in Energy of the Future

For a long time, energy has been a crucial part of investors’ portfolios. Though most energy stocks can be quite risky due to the volatile price of commodities, the energy industry as a whole is a staple of the economy. Energy continues to be an important issue, but today the talk is regarding the sources of that energy. With more and more countries recognizing the very real effects of climate change, more is being done to grow renewables and rely less on fossil fuels. Naturally, the shift will take quite a long time, several decades, in fact, but positioning yourself now and starting to find the best green energy companies for the long run, could end up being highly profitable. Two of the most attractive green energy companies you can buy today are Northland Power (TSX:NPI) and Algonquin Power and Utilities (TSX:AQN)(NYSE:AQN). Northland Northland is a growing renewable energy company with nearly 2,500 megawatts of generating capacity located in Canada and Europe, though the majority of its assets are located in Ontario. The company has been bringing new projects online, which has helped it to grow its business considerably, as evidenced by its earnings before interest, taxes, depreciation, and amortization (EBITDA) growing rapidly over the last five years. Going forward, it has more than 1,300 megawatts of generating capacity in development, which is equal to more than 50% of its current capacity and will drive plenty of growth for the company, continuing to reward long-term shareholders. It will also improve the stability of its business operations with the addition of the Colombian Electric Utility it recently bought. Investors who have owned Northland in the past have been rewarded well, as the stock is up more than 80% in the last five years, or a nearly 13% compounded annual growth rate. With the outlook in the industry, and Northland trading for so cheap, this doesn’t look set to change, and investors in Northland can reasonable expect some solid gains over the next few years. The stock currently trades at a very attractive valuation: at an enterprise value to EBITDA below 10 times. On top of the gains you can make as its price grows, Northland also pays a stable dividend that yields approximately 4.25% and has a payout ratio that’s just over 70%. It’s clear that Northland is one of the top companies in the renewable industry, and with management owning roughly a…

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2 High-Growth 5G Stocks to Consider in 2020

It’s official: 5G is beginning to roll out in Canada. According to a recent Financial Post story, Rogers Communications (TSX:RCI.B)(NYSE:RCI) activated 5G in areas of Toronto, Ottawa, Vancouver, and Montreal this past Wednesday. While customers will not actually be able to access the network for some time, its activation has been touted as an important milestone toward 5G going mainstream. 5G is much faster than existing networks, allowing faster data transfer and greater bandwidth. Wireless providers that get in on the ground floor will stand to benefit from the new technology, adapting to it quicker than companies that lag behind. The following are two companies whose shares are worth considering in light of their strong position heading into the 5G era. Rogers Communications Rogers Communications is the obvious frontrunner in Canada’s race to 5G. Not only is it the first Canadian telecom provider to activate its 5G network, but it’s also reportedly working with hardware manufacturers to ensure their devices are compatible. According to the Financial Post, Rogers got a headstart on 5G by partnering with Ericsson to develop its network infrastructure. While other telcos began working with the cheaper supplier Huawei, those plans were thwarted, as national security experts raised concerns about potential network interference by Chinese actors. The end result was that Rogers got to roll out its 5G network much more quickly than its competitors did. That one factor alone makes Rogers a 5G stock worth considering. However, that’s not all the company has going for it. In addition to its enviable position in the “5G wars,” the company is also a strong grower, having increased its earnings from $835 million to $2 billion in just three years. The stock is also a solid dividend play, with a 3.09% yield as of this writing and a long track record of dividend increases. Quebecor Quebecor (TSX:QBR.B) is a Quebec-based communications conglomerate that has holdings in media production, sports, and telecommunications. Even with out considering 5G, this stock has a lot going for it. With an above-average ROE, a 14 P/E ratio, and market-beating historical returns, it’s a stock that has rewarded investors handsomely over the years. However, when we take 5G into account, this stock becomes even more appealing. Just recently, Samsung Electronics announced that it had scored a deal with Videotron, a Quebecor subsidiary, to supply its 5G network infrastructure. This puts Quebecor a safe distance away from the Huawei controversy that’s plaguing other Canadian telecommunications…

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Can This Cannabis Stock Sustain its Strong Start to 2020?

Shares of Canada-based cannabis company Charlotte’s Web Holdings (TSX:CWEB) have gained close to 18% since the start of 2020. Several cannabis stocks got a boost after Organigram reported its stellar quarterly report on January 14. Pot stocks have also gained momentum after the Ontario government announced plans to increase the number of cannabis stores in the next two years. However, this accelerated rollout will not positively impact the top line for CWEB, as it primarily focuses on the production and distribution of hemp-based cannabidiol (CBD). CWEB is engaged in the alternative medicine sector, and products are made from strains of hemp extracts that do not possess any psychoactive effects. It does not produce or sell medicinal or recreational marijuana products. While the stock has recently gained momentum, it is still trading 14% below its IPO price of $13.25. Strong financial metrics CWEB claims to be the top brand in the hemp-derived CBD market. It has managed to grow sales from $14.7 million in 2016 to $40 million in 2017 and $69.5 million in 2018. The company is vertically integrated, giving it opportunities to optimize the supply chain. CWEB gross margins have risen from 65% to 75% between 2016 and 2018, while adjusted EBITDA margin rose from 14% to 30% in the same period. In the last reported quarter, Charlotte’s Web Holdings reported sales of $25.1 million — a growth of 42% year over year with a gross margin of 71%. Over 50% of sales in the third quarter were from the e-commerce channel, while B2B sales were up 66.4%. CWEB has increased its total production area from 70 acres in 2017 to 862 acres in 2019. This will result in a significant jump in total hemp production for the firm. Increase in distribution network CWEB has expanded its distribution in 2019, which has driven sales higher. At the end of the third quarter, CWEB products have been available in 9,000 locations and are estimated to touch 10,000 by the end of the December quarter. The company is eyeing growth in the FDM (food/drug/mass) channel. During the earnings call, CWEB CEO Deanie Elsner stated, “Over the past several months, we’ve put substantial infrastructure in place to accommodate anticipated future growth driven by the FDM channel. This includes management team processes in addition to investment in expanded production, distribution, R&D and extraction capacity.” Elsner added, “We continue to progress our expansion plan…

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