3 Dividend Aristocrats for Your RRSP

Retirement investors should look to reliable Dividend Aristocrats like Magna International Inc. (TSX:MG)(NYSE:MGA) to fill out their portfolios.

| More on:

A recent report from Melbourne Mercer’s global pension index ranked the Canadian system as the ninth best in the world. This is largely due to the growth in assets under the Canada Pension Plan and the Quebec Pension Plan. However, the report also pointed out that pensions around the world are facing challenges in the form of “unprecedented life expectancy and rising pressure on public resources.”

In previous articles, I’d discussed why many investors need to focus on building their retirement portfolio. The decline of defined-benefit pension plans in the private sector is something many Canadians cannot ignore.

Today, I want to look at three Dividend Aristocrats on the TSX — that is, stocks that have achieved at least five consecutive years of dividend growth.

Magna International

Magna International (TSX:MG)(NYSE:MGA) is the top automotive parts manufacturer in North America. Shares have climbed 8.4% over the past three months. The company is set to release its third-quarter 2019 results in early November.

In the second quarter, Magna reported a lower year-over-year profit and slashed its sales outlook. However, on an organic basis, sales still increased 5% compared to a 6% decline in global vehicle production. And overall, earnings still beat analyst expectations.

The company last announced a quarterly dividend of $0.365 per share. This represents a 2.7% yield. Magna has achieved dividend growth for nine consecutive years. The stock possesses a price-to-earnings ratio of 8.3 and a favourable price-to-book value of 1.5. Magna is still a strong option for investors even in the face of broader headwinds for the global auto sector.

Richelieu Hardware

Richelieu Hardware (TSX:RCH) imports, manufacturers, and distributes specialty hardware and complementary products. Shares have climbed 18.8% in 2019 so far. The stock has achieved average annual returns of 15% over the last 10 years.

In the third quarter, Richelieu reported sales of $269.2 million, which were up 3.4% from the prior year. EBITDA rose 4.3% year over year to $30.2 million and diluted net earnings per share climbed 3.1% to $0.33. Sales in U.S. dollars to hardware retailers have shown strong growth in the first nine months of 2019. This has fueled 8.2% sales growth in its U.S. segment compared to 0.7% growth in Canada.

Richelieu last paid out a quarterly dividend of $0.0633 per share. This represents a modest 0.9% yield. The company has delivered dividend growth for nine straight years.

Gildan Activewear

Gildan Activewear (TSX:GIL)(NYSE:GIL) is a Montreal-based manufacturer of branded clothing. The stock has plunged 34.9% over the past three months. It released preliminary third-quarter results on October 17.

The company revealed adjusted diluted earnings per share of $0.53, which was down 7% from the prior year. Gildan reported weaker-than-expected demand for imprintables in North America and continued weakness in international markets.

However, overall retail sales were still in line with the company’s expectations. This sparked a revision in its guidance for the full year that reflected a roughly $50 million sales shortfall. Investors can expect a more detailed report tomorrow.

Gildan last paid out a quarterly dividend of $0.134 per share. This represents a 2% yield. The stock had a Relative Strength Index of 19 at the time of this writing, which puts Gildan deep in technically oversold territory. It looks like the biggest discount of the dividend stocks we have covered today.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends GILDAN ACTIVEWEAR INC. and Magna Int’l.

More on Dividend Stocks

Canadian dollars in a magnifying glass
Dividend Stocks

3 High-Yield Dividend Stocks That Are Screaming Buys Right Now

Are you looking for great income stocks? Here's a trio of high-yield dividend stocks that pay insane yields right now.

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

Transform a $5,000 TFSA Into a $50,000 Retirement Nest Egg

The TFSA is a powerful tool that can grow a small investment into a substantial retirement nest egg over time.

Read more »

A meter measures energy use.
Dividend Stocks

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

Fortis has increased its dividend annually for the past five decades.

Read more »

analyze data
Dividend Stocks

3 Dividend Stocks That Are Screaming Buys in November

Here are three top dividend stocks long-term investors won't want to ignore during this part of the market cycle.

Read more »

senior relaxes in hammock with e-book
Dividend Stocks

Generate $175/Month in Passive Income With a $30,000 Investment

Dividend aristocrats offer reliability, and many of them also offer generous yields. With sizable enough discounts, these yields can become…

Read more »

dividends can compound over time
Dividend Stocks

Best Dividend Stocks to Buy Now for Canadian Investors

These three stocks would be excellent additions to your portfolios, given their solid underlying businesses, consistent dividend growth, and healthy…

Read more »

data analyze research
Dividend Stocks

3 Undervalued Stocks to Watch in November

Not all undervalued and discounted stocks are destined or poised to make a comeback soon, and a protracted timeline can…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

The Perfect TFSA Stocks for Long-Term Growth

Two industry heavyweights are perfect stock holdings in a TFSA for long-term money growth.

Read more »