Rock-Solid Retirement Income: Here Are 3 Amazing Dividend-Growth Stocks to Buy Now

Market volatility is back. This group of dividend-growth streakers, including BCE Inc. (TSX:BCE)(NYSE:BCE), can help build your wealth the prudent way.

| More on:

Hi there, Fools. I’m back again to highlight three attractive dividend-growth stocks. As a quick refresher, I do this because companies with consistently growing dividends

  • usually have the robust cash flows to back up those payments;
  • can provide an ever-increasing income stream in all types of markets; and
  • tend to outperform over time.

Investors often focus strictly on dividend yield. But the rate and consistency in which that dividend grows is equally, if not more, important — particularly for retirees (or those nearing retirement) who depend on those payouts.

Let’s get to it.

Friendly grocer

Kicking off our list is Metro (TSX:MRU), which has raised its dividend for 24 consecutive years. Shares of the grocery store operator are up about 20% over the past year versus a gain of 6% for the S&P/TSX Capped Consumer Staples Index.

I fully expect Metro’s business momentum to carry into the new year. In the most recent quarter, adjusted earnings spiked 35% on sales growth of 16%.

The company’s key acquisition of Jean Coutu Group should also start to bear real synergistic fruit in 2019.

“The integration work is progressing well and we are confident in our ability to realize the full potential of this promising business combination,” said President and CEO Eric LaFleche. “We are better positioned than ever to meet our customers’ everyday needs and create value for our shareholders.”

Currently, the stock trades at a forward P/E in the mid-teens.

Winning with Finning

With 17 straight years of increasing payouts, Finning International (TSX:FTT) is our next dividend-growth star. Shares of the heavy equipment company are down roughly 27% over the past year versus a slight gain for the S&P/TSX Capped Industrials Index.

Look for the stock to bounce back in 2019. Adjusted EPS was up 35% in the most recent quarter as revenue grew 14% to $1.8 billion. More importantly, even management believes the stock is cheap.

“Given our view there is a disconnect between our share price and fundamental value,” President and CEO Scott Thomson said, “our plan is to repurchase up to $100 million worth of our shares by the end of 2018, subject to receipt of regulatory approvals.”

With a 3% dividend yield, as well as a cheapish forward P/E of 12, it’s tough to disagree with management’s take.

Clear as a bell

Rounding out our list is BCE (TSX:BCE)(NYSE:BCE), which has posted 11 years of consecutive dividend growth. Shares of the telecom giant are down about 4% over the past year versus a gain of 3% for the S&P/TSX Capped Telecom Services Index.

BCE is one of my top turnaround candidates for 2019. In Q3, total wireless net additions came in at a record 178,000, which included a 15.5% bump in postpaid net additions. Meanwhile, broadband Internet and IPTV market share also increased, with 88,000 net additions.

“Bell’s strategy of broadband network investment, ongoing service improvement and efficient operation is delivering leading results in the marketplace, stronger organic financial performance and service innovation across all of our business segments,” said President and CEO George Cope.

Given the stock’s consistently growing dividend and current yield of 5.4%, that bullishness is certainly worth betting on.

The bottom line

There you have it, Fools: three dividend-growth stocks worth checking out.

They aren’t formal recommendations, of course. They’re just ideas for further research. Dividend-growth streaks can quickly end without notice, so plenty of homework is still required.

Fool on.

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 Brian Pacampara owns no position in any of the companies mentioned. Finning is a recommendation of Stock Advisor Canada.  

More on Dividend Stocks

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 »

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

3 Utility Stocks That Are Smart Buys for Canadians in November

These utility stocks benefit from regulated businesses and generate predictable cash flows that support higher dividend payouts.

Read more »

Start line on the highway
Dividend Stocks

Invest $10,000 in This Dividend Stock for $600 in Passive Income

Do you want to generate passive income? Forget the rental unit! This option will save you the mortgage yet still…

Read more »

Senior uses a laptop computer
Dividend Stocks

1 Reliable Dividend Stock for the Ultimate Retirement Income Stream

TD Bank (TSX:TD) shares are way too cheap with way too swollen a yield for retirees to pass up right…

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

Is Brookfield Infrastructure Partners a Buy for its 4.75% Yield?

Brookfield Infrastructure Partners (BIP) has a 4.75% dividend yield. Is it worth it?

Read more »

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 »