4 Stocks Is All You’ll Need to Retire Wealthy
The Motley Fool
Published Oct 22, 2021 05:23
Updated Oct 22, 2021 05:45
4 Stocks Is All You’ll Need to Retire Wealthy
Some Canadians retire wealthy because of inheritance or transfer of wealth by parents or relatives. Unfortunately, the majority have to work at it to have ample resources besides the pension when they retire. However, retiring wealthy on a normal person’s income is possible.
If you’ve been setting aside a portion of income, pay yourself forward. Start the journey to riches by investing the money to earn more and retire with a fortune. You need only four dividend stocks for money growth and a steady income stream in retirement.
Big bank stock Canada’s Big Banks are among the preferred investment choices of income investors. The Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM), the country’s fifth-largest bank, is a superb choice today. Apart from its 153-year dividend track record, this $66.92 billion bank pays a 3.95% dividend.
The total return in the last 48.88 years is 19,966.51% (11.27% compound annual growth rate). Thus far, in 2021, CIBC outperforms the broader market year-to-date, +41.16% versus +21.54%. Moreover, the stock’s performance mirrors the bank’s financial performance in fiscal 2021.
CIBC’s net income after three quarters (nine months ended July 31, 2021) grew 80% to $5 billion versus the same period in fiscal 2020. Similarly, it’s the only Big Bank that reported more than 300% net income growth in Q2 fiscal 2021 versus Q2 fiscal 2020.
Energy sector Imperial Oil (TSX:IMO) pays a modest 2.31% dividend, but the payouts should be safe for decades. The dividend track record is over one century too (140 years), and management has increased the dividends for 26 consecutive years. Energy is the top-performing sector on the TSX this year, with its +73.01% gain.
At $42.97 per share, IMO is up 81.92% year to date. In Q2 2021, the $30 billion oilsands producer recorded the highest second-quarter production ever in 25 years. Management’s planned turnaround activities were successful, as evidenced by the $758 million net income in the first half of 2021. Its net loss in the same period last year was $714 million.
Well-entrenched food retailer North West Company (TSX:NWC) is a reliable income provider. Performance-wise, the stock’s total return in the last two decades is 4,768.12% (21.42% CAGR). The share price is $33.61, while the dividend yield is 4.36% if you invest today.
Furthermore, the $1.63 billion company is 353 years old and well-entrenched in hard-to-reach communities and urban neighbourhoods in Canada, Alaska, the South Pacific, and the Caribbean. This food retailer also offers general merchandise, financial, air-based transportation, and virtual pharmacy services.
Consumer staple Sugar is a low-growth business, but since it’s a consumer staple, it’s an enduring one. With this competitive advantage, Rogers Sugar (TSX:RSI) is a buy-and-hold income stock. Its share price ($5.61) is the cheapest ($5.61 per share) among the dividend stocks in focus. The dividend yield, however, is the highest (6.44%).
Get The App
Rogers experienced a downturn in 2020 due to lower consumer retail volume (sugar and maple). In 2021, sales have vastly improved. After three quarters, revenue, volume, and net earnings growth were 6%, 5%, and 40%, respectively, compared to the same period in 2021.
A $500,000 nest egg The starting point to building retirement wealth is setting aside money early on. Use the accumulated savings to purchase four dividend stocks to form a well-diversified portfolio. A $217,200 investment equally distributed will compound over half a million dollars in 20 years.
The post 4 Stocks Is All You’ll Need to Retire Wealthy appeared first on The Motley Fool Canada.
Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends THE NORTH WEST COMPANY INC.
This Article Was First Published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.