This 3-Stock Portfolio Is Set for Both Growth and Income Investors

Investors looking to establish a long-term portfolio should consider buying Enbridge Inc. (TSX:ENB)(NYSE:ENB) and these two other investments.

| More on:

How diversified is your portfolio? Establishing a well-rounded portfolio of investments remains one of the most important, yet difficult-to-execute facets of investing.

Fortunately, the trio of investments noted below not only cater to different areas of the economy but also provide income-generating capabilities that will put your portfolio on the fast-track to retirement.

Let the income (and oil) flow

Enbridge (TSX:ENB)(NYSE:ENB) is an intriguing investment that caters to the insatiable demands of the energy sector while providing a recurring stream of revenue to the joy of investors.

Even better is the fact that Enbridge’s lucrative pipeline revenue stream is tied to volume, not to the volatile price of oil, making it a stable, passive investment option to consider.

In terms of volume, Enbridge’s pipeline network hauled 2.7 million barrels per day in the most recent quarter, accounting for over 60% of U.S.-bound Canadian crude. Enbridge also hauled one-fifth of all the natural gas consumed in the U.S. market.

In the most recent quarter, Enbridge reported adjusted earnings of $1.64 billion, or $0.81 per share, surpassing both the expectations of analysts as well as the $1.38 billion reported in the same quarter last year.

Income-seeking investors will love Enbridge’s quarterly dividend, which provides a staggering 6.67% yield.

All aboard! Last train to income city!

Canadian National Railway (TSX:CNR)(NYSE:CNI) is not just Canada’s largest railroad. CN is also one of the best long-term investments on the market that is hiding in plain sight.

Most people are dismissive of the importance of railroads in our modern economy, but this is where the hidden appeal of CN comes into play. Railroads haul as much as one-fifth of all freight in the U.S. market, connecting factories, and storehouses to terminals and ports across the continent.

CN is uniquely positioned in this regard, as it is the only railroad on the continent with access to three coastlines, hauling $250 billion worth of goods each year. Adding to the appeal of that stellar network is CN’s operating ratio, which continues to be the envy of its peers. In the most recent quarter, the operating ratio came in at just 57.5%.

Turning to dividends, Canadian National deceptively boasts just a 1.72% yield, but, over the course of the past two decades, the railroad’s compound annual dividend-growth rate has neared a whopping 16%

Put your deposit elsewhere

Canada’s big banks are often mentioned as the superb long-term investment options they are, but what of Canada’s smaller banks?

National Bank of Canada (TSX:NA) is the sixth-largest lender in the country. Depending on where you draw the line, that makes National the smallest big bank or the largest small bank.

So, what makes National a compelling investment option? Apart from the appetizing 4.24% quarterly yield (which has remained over 4% during the past decade), there is the increasingly stable payout ratio that came in at just 44.95% in the most recent quarter.

National’s focus within its home province of Quebec is another key point of consideration. Unlike Ontario and B.C., Quebec’s real estate market hasn’t shot into the upper atmosphere in recent years, meaning that homes are more affordable and the market is still booming.

That’s not to say National doesn’t have a presence outside Quebec. The lender has a booming international arm that saw double-digit year-over-year gains in the most recent quarter, which also outperformed the domestic segment.

What’s next?

A well-rounded portfolio needs a variety of different investments. Not only do the above investments cater to that need to diversify, but they also provide a growing stream of income that will continue to grow over the years.

In other words, buy them, hold them, and forget about them for a decade or more.

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 Demetris Afxentiou has no position in any of the stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway and Enbridge. Canadian National Railway and Enbridge are recommendations of Stock Advisor Canada.

More on Dividend Stocks

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »

calculate and analyze stock
Dividend Stocks

This 5.5% Dividend Stock Pays Cash Every Single Month!

This REIT may offer monthly dividends, but don't forget about the potential returns in the growth industry its involved with.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

How to Use Your TFSA to Earn up to $6,000 Per Year in Tax-Free Passive Income

A high return doesn't mean you have to make a high investment -- or a risky one -- especially with…

Read more »

path road success business
Dividend Stocks

2 High-Yield Dividend Stocks to Buy Hand Over Fist and 1 to Avoid

High yields are great and all, but only if returns come with them. And while two of these might, another…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 7% Dividend Stock Pays Cash Every Month

A high dividend yield isn't everything. But when it pays out each month and offers this stability, it's worth considering!

Read more »

young people stare at smartphones
Dividend Stocks

GST/HST “Vacation”: Everything Canadians Need to Know

The GST/HST "vacation" is a little treat for the holidays, along with a $250 payment. What should you do with…

Read more »

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »