3 Dividend Growth Stocks to Help Build Your Savings

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) and these two other dividend stocks would be great choices to put into your portfolio today.

| More on:

Dividend stocks sound ideal for people who are on fixed incomes, but for young people looking to save for retirement, investing in dividend-growth stocks is a very powerful way to accelerate that process. The benefit of investing in a growing dividend is that not only do you earn a percentage on your investment every year, but there’s a good possibility that those payouts will increase over time.

Not every dividend stock hikes its dividend, and there’s no guarantee that a dividend will even continue. But for investors looking to grow their savings, dividend-growth stocks are a great option and an easy way to strengthen your portfolio.

Below are three stocks that offer a good yield and that could generate significant dividends for years to come.

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is an easy choice to pick for any portfolio because it’ll be hard to find a safer stock on the TSX, and you also get a great dividend in the process. Currently, TD’s stock pays investors a dividend of over 3.5% and it has hiked its payouts within the past year.

The company has a strong track record of increasing its payouts, and we could see another increase happen soon. Over the years, TD has hiked its dividend by around 10%, with the most recent increase being over 11%. Prior to that, the company raised its payout by 9%.

Either way, with the bank stock continuing to do well and having great opportunities for growth south of the border, there’s little reason to expect to see any problems that would hinder the company’s ability to continue paying and increasing its payouts.

Suncor Energy Inc (TSX:SU)(NYSE:SU) is one oil and gas stock that just might be safe to invest in. Despite the downturn in the industry over the past several years, Suncor remains a pillar and a strong investment option. The stock has been doing well over the past year and currently pays shareholders a dividend of 3%.

Even amid struggling industry conditions, Suncor has still been able to grow its dividend. In five years, dividend payments have risen from $0.20 per quarter to $0.36 for an increase of 80% and a compounded annual growth rate (CAGR) of 12.5%.

Suncor continues to look for ways to improve its operations, and that will help to ensure the company remains profitable and a safe investment option.

Emera Inc (TSX:EMA) has struggled this year, with its stock down around 15% in 2018 despite continuing to produce strong results in 2018. The utility provider has a strong business model that can offer investors with a lot of growth and stability over the long term.

The company recently increased its payouts, and Emera now pays its investors a dividend of 6% per year, the highest on this list. In five years, the company has increased its dividend payments by 62% for a CAGR of just over 10%. While it may not be as high of an increase as Suncor has averaged, it would take Suncor’s stock a very long time to catch up to Emera’s yield, assuming, of course, that no significant changes were to happen along the way.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor David Jagielski has no position in any of the stocks mentioned.

More on Dividend Stocks

ETF stands for Exchange Traded Fund
Dividend Stocks

How to Earn $2,000 in Passive Income in 2025 With Less Than $51,000 in Savings

You can invest in Canadian high yield stocks via the Vanguard FTSE Canadian High Yield Dividend ETF (TSX:VDY).

Read more »

monthly desk calendar
Dividend Stocks

This 7.8% Dividend Stock Pays Out Every Month

Not all monthly dividend stocks are created equal. And this top stock is certainly a strong choice for passive income.

Read more »

A worker gives a business presentation.
Dividend Stocks

Is TMX Group Stock a Buy, Sell, or Hold for 2025?

TMX Group (TSX:X) stock has been a consistent wealth-builder, generating 4,630% in total returns since 2002. Should you buy, sell,…

Read more »

Man data analyze
Dividend Stocks

2 Deeply Undervalued Dividend Stocks to Buy in November

Here are two stocks that I view as deeply undervalued this November.

Read more »

Dividend Stocks

The 2 Best Canadian Blue-Chip Stocks to Buy Now

Blue-chip stocks can be some of the best stocks to have in any portfolio. But when they're trending upwards, investors…

Read more »

Canadian dollars in a magnifying glass
Dividend Stocks

Here Are My Top 3 Dividend Stocks to Buy Now

These top dividends stocks have consistently paid and increased their dividends. Further, this trend will continue.

Read more »

dividends can compound over time
Dividend Stocks

Want a 7% Yield? The 3 TSX Stocks to Buy Today

These TSX stocks are offering high yields of over 7%, making them attractive for investors seeking steady passive income.

Read more »

how to save money
Dividend Stocks

The Smartest Dividend Stocks to Buy With $200 Right Now

These smartest dividend stocks can consistently pay and increase their dividends in the coming years, irrespective of the macro uncertainty.

Read more »