Kalkine Media - Dividend-growth investors should focus on the best dividend-growth opportunities in the market. While diversification is important, too much of it can dilute returns, especially if managing a large portfolio becomes challenging. While mutual funds, index funds, and ETFs offer instant diversification, focusing on individual stocks can provide opportunities to outperform the market. In the context of TSX dividend stocks, selecting individual dividend-paying stocks allows investors to tailor their portfolio to specific dividend-growth opportunities, potentially maximizing returns while managing risk.
In the Canadian market, particularly the TSX Index, young investors have the potential to beat the market without taking excessive risks. The TSX Index's heavy sector weighting in financials and energy makes it susceptible to sector-based risks, such as fluctuations in oil prices. Thus, prioritizing less cyclical stocks in a TFSA portfolio can be beneficial for long-term growth.
Two standout dividend-growth stocks worth considering for TFSA portfolios are Restaurant Brands International (TSX:QSR) (TSX:QSR) and Rogers Communications (TSX:RCIa) (TSX:RCI.B).
Restaurant Brands (TSX:QSP_u) International, despite recent challenges in the fast-food industry due to inflation and price hikes, remains poised for growth. With iconic brands like Burger King and Tim Hortons, strategic investments, and a dividend yield of 2.75%, QSR stock presents an attractive opportunity for investors. As the company continues its growth trajectory, its dividend is likely to increase over time, making it a compelling long-term investment option.
Similarly, Rogers Communications, following its acquisition of Shaw Communications (TSX:SJRb), is positioned for significant growth. Despite a dividend yield of 3.14%, which may be lower compared to other telecom companies, Rogers has strong growth prospects. Momentum has been building since the market bottomed in recent months, making it an opportune time to consider averaging into a full position. With the potential to outpace its peers in the coming years, Rogers presents an appealing opportunity for dividend-focused investors.
In conclusion, focusing on dividend-growth rockstars like Restaurant Brands International and Rogers Communications can be a prudent strategy for building a TFSA growth portfolio. As these companies continue to expand and increase their dividends, investors stand to benefit from long-term capital appreciation and income generation.