These 3 “Boring” Stocks Turned $10,000 Into $100,000

A small investment in Toronto-Dominion Bank (TSX:TD)(NYSE:TD), Fortis Inc. (TSX:FTS)(NYSE:FTS), and Richelieu Hardware Ltd. (TSX:RCH) turned into some pretty serious money.

| More on:

Investing is funny sometimes.

Although you’d think the sexy companies in new and exciting industries would create the most wealth, oftentimes the exact opposite thing happens. These companies crash and burn while blue-chip stock in boring sectors continue to chug along.

Some of these boring stocks generate serious wealth. Here are three that turned an initial $10,000 investment into something worth at least six figures.

Richelieu Hardware

Many Canadian investors haven’t even heard of Richelieu Hardware (TSX:RCH), despite the stock being one of the best growth stories out there over the last decade.

Richelieu supplies contractors and different hardware stores with a vast array of products it either sources from third parties or owns itself. It has steadily grown the business by acquiring competitors or buying companies that make interesting products. This two-pronged expansion approach has served it quite well.

Both revenue and operating income have more than doubled since 2009, and that’s with the bottom falling out of the U.S. housing market. Further growth is still very possible, since Richelieu only does approximately $1 billion in annual revenue.

A $10,000 investment in the stock 20 years ago would be worth nearly $214,000 today assuming an investor reinvested their dividends. That’s the kind of performance that can make or break a portfolio.

Toronto-Dominion Bank

I remember when I first started investing back in 2002, and Toronto-Dominion Bank (TSX:TD)(NYSE:TD) was widely viewed as the weakest of the so-called Big Five banks.

Things sure have changed in the last 17 years. TD has turned that reputation completely around and is known as the cream of the crop nowadays thanks to its impressive growth in Canada, its successful U.S. expansion, and various shrewd acquisitions in the credit card space. It also has a large stake in TD Ameritrade, an asset everyone in Canada seemingly forgets about.

Canada’s bank stocks have sunk lately, and most of us at Fool Canada agree they’re good buys today. TD is no exception. Investors who get in today are locking in a 3.9% dividend and are picking up shares at less than 10 times forward earnings expectations. TD shares haven’t been this cheap in years.

Even accounting for this recent weakness, TD has been a wonderful long-term investment; $10,000 invested in the stock 21 years ago would be worth $103,731 today, assuming you’d reinvested all the dividends.

Fortis

Fortis (TSX:FTS)(NYSE:FTS) has quietly grown into one of North America’s premier utilities. It owns both power and natural gas assets across Canada, power assets in the United States, and even a sprinkling of exposure to the Caribbean. Approximately 60% of income comes from the United States.

These days, Fortis is more focused on organic growth. It plans to spend $17.3 billion on capital projects over the next five years to help grow its current utility businesses. This plan should support solid dividend growth; management says investors can expect an average of 6% dividend growth during that time. Not bad for a stock that yields 3.8% currently.

Fortis has long been one of the TSX’s top-performing stocks, despite it being in a somewhat lackluster industry. A $10,000 investment in the stock 22 years ago would be worth just over $127,000 today if dividends were reinvested. That’s an annual return north of 12%.

The bottom line

As you can see, it doesn’t take risky stocks to turn moderate investments into big money. It comes down to finding great companies with ample growth opportunities ahead of them. Richelieu Hardware, Toronto-Dominion Bank, and Fortis still fit that description today. All three would make great long-term additions to any portfolio.

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 Nelson Smith has no position in any of the stocks mentioned.

More on Dividend Stocks

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »

Tractor spraying a field of wheat
Dividend Stocks

Is Nutrien Stock a Buy for its Dividend Yield?

Nutrien is down more than 50% form the 2022 highs. Is NTR stock now oversold?

Read more »

golden sunset in crude oil refinery with pipeline system
Dividend Stocks

Best Stock to Buy Right Now: Enbridge vs TC Energy?

Enbridge and TC Energy rebounded nicely over the past year. Are more gains on the way?

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

2 Utility Stocks That Are Smart Buys for Canadians in November

Are you looking for some of the smart buys to consider in November? These utility stocks offer growth and a…

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

Is Power Corporation of Canada Stock a Buy for its 5% Dividend Yield?

Is Power Corporation of Canada (TSX:POW) stock's 5% dividend yield worth it? Discover why this resilient stock could be a…

Read more »

hand stacks coins
Dividend Stocks

Here Are My Top 3 Dividend Stocks to Buy Now

These three dividend stocks are ideal for strengthening your portfolio and earning a stable passive income.

Read more »

man touches brain to show a good idea
Dividend Stocks

3 No-Brainer REIT Stocks to Buy Right Now for Less Than $200

REITs have long been touted as some of the best dividend stocks out there if you want recurring, strong income.…

Read more »