RRSP Investors: 3 Game-Changing Stocks for Your Retirement Portfolio

When you are saving for your retirement, you look for different “traits” in stocks than you would for stocks that you choose for short-term growth.

| More on:

Even though you can move around your RRSP stocks nearly the same way you do with your TFSA stocks, the choices should be more long term in one compared to the other. The reason is that since you can’t pull your returns out of the account till you are retired, which might be decades away, you might as well go for a longer “accumulation” of capital growth or dividends and leverage the power of time as much as you can.

For that, you need consistent stocks that you can buy and hold for decades.

A high-yield dividend stock

Accumulating cash in an RRSP, while a bit different from cash in a TFSA, which you can access whenever you want, can provide an important opportunity. It can be used to buy other assets and grow your RRSP portfolio. A high-yield and undervalued stock like Slate Office REIT (TSX:SOT.UN) might be ideal for this particular usage.

The REIT is currently offering a mouth-watering yield of 7.4% and is trading at a price-to-earnings ratio of 8.3 and a price-to-book ratio of just 0.6 times. The payout ratio is healthy at 60.5%, and even though revenues took a steep dive in 2020, the REIT might be able to turn things around in 2021. With $20,000 invested in the company, you can accumulate $1,480 a year — a decent enough sum for investing.

A growth stock

Clairvest (TSX:CVG) is a Toronto-based capital market company that has been growing quite steadily for the past decade, and it is trading at a decent discount. The company has a 10-year CAGR of 18.5%, and if the company can sustain it for one or two more decades, it can be game-changing for your RRSP portfolio. The firm has helped its clients (investment) create over $2 billion of net worth over the years.

The company has made over 320 add-on acquisitions and 56 partnership investments. It has a diversified portfolio of assets to its name. The financials are a bit inconsistent, but the company has a powerfully strong balance sheet, almost no debt, and a strong cash position. It also offers dividends, but the yield is merely 0.15%.

A powerful combination

One stock that offers both decent growth and sizeable dividends is Summit Industrial Income REIT (TSX:SMU.UN). It’s currently offering a yield of 3.1% and a powerful 10-year CAGR of 34.29%. It might not be sustainable, but if the company can keep it up for just a little while longer, it can double your capital in fewer than three years.

It has a geographically diversified portfolio of light industrial properties in five provinces, though the bulk of its assets are concentrated in three (Ontario, Alberta, and Quebec). Its true growth potential comes from the “uses” its properties offer — i.e., warehousing, logistics, customer support, shipping, light assembly, etc., all of which make it an ideal e-commerce player.

Foolish takeaway

It’s a good idea to add both growth and dividends to your RRSP portfolio if you want your retirement assets to be relatively well balanced. If your dividend stocks stay consistent for decades, you can turn them into income-producing streams by reinvesting the returns back to them. And your growth stocks can help you reach your retirement net worth goal sooner.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends SUMMIT INDUSTRIAL INCOME REIT.

More on Dividend Stocks

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 »

coins jump into piggy bank
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

These top dividend stocks both offer attractive yields and trade off their highs, making them two of the best to…

Read more »

Middle aged man drinks coffee
Dividend Stocks

Here’s the Average TFSA Balance at Age 35 in Canada

At age 35, it might not seem like you need to be thinking about your future cash flow. But ideally,…

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

How to Invest Your $7,000 TFSA Contribution in 2024

Here's how I would prioritize a $7,000 TFSA contribution for growth and income.

Read more »

a man relaxes with his feet on a pile of books
Dividend Stocks

CPP Pensioners: Watch for These Important Updates

The CPP is an excellent tool for retirees, but be sure to stay on top of important updates like these.

Read more »

Technology
Dividend Stocks

TFSA Investors: 3 Dividend Stocks I’d Buy and Hold Forever

These TSX dividend stocks are likely to help TFSA investors earn steady and growing passive income for decades.

Read more »

four people hold happy emoji masks
Dividend Stocks

Love Dividend Growth? Check Out These 2 Income-Boosting Stocks

National Bank of Canada (TSX:NA) and another Canadian dividend-growth stock are looking like a bargain going into December 2024.

Read more »

An investor uses a tablet
Dividend Stocks

A Dividend Giant I’d Buy Over Enbridge Stock Right Now

Enbridge stock may seem like the best of the best in terms of dividends, but honestly this one is far…

Read more »