Many investors dream of getting rich off the stock market. One way that investors commonly measure whether they’re on the right track or not is by checking to see if their portfolio manages to beat the TSX each year. Although that may sound like a daunting task, it’s actually quite doable.
In order to beat the market, investors should look for stocks with track records of doing so. In addition, those stocks should continue to offer a significant competitive advantage over their peers, which could help them continue to grow at a fast pace over the coming years. In this article, I’ll discuss two dividend stocks that have managed to beat the market. I believe these companies could be a great addition to any portfolio, and all investors should consider buying shares today.
The first dividend stock has managed to beat the TSX
Canadian National Railway (TSX:CNR) is the first stock that investors should consider buying today. This company operates nearly 33,000 kilometres of track, which represents the largest rail network in Canada. Canadian National’s rail network spans from British Columbia to Nova Scotia and as far south as Louisiana.
Over the past five years, Canadian National Railway stock has managed to grow about 35%, dividends excluded. For comparison, the TSX has grown about 23% over the same period. Speaking of its dividend, Canadian National is known for being excellent at increasing its distribution each year. In fact, with a 26-year dividend-growth streak, Canadian National is listed as a Canadian Dividend Aristocrat and one of only 11 TSX-listed stocks to currently maintain a dividend-growth streak of that length or longer.
Because there is no viable way of transporting large amounts of goods over long distances, if not via rail, I believe companies like Canadian National could continue to see a lot of demand over the coming years. I’m very confident that this company could continue to grow its business strongly in the future, and its stock price could reflect that.
A dividend stock with even great growth potential
The second stock that investors should consider buying if they hope to beat the market is goeasy (TSX:GSY). If you’re unfamiliar with this company, you should know that it operates two distinct business segments. This includes easyfinancial, which provides high-interest loans to subprime borrowers, and easyhome, which sells furniture and other home goods on a rent-to-own basis.
Listed at a market cap of $2.15 billion, goeasy is a much smaller company than Canadian National. Because of that, it’s able to grow at a much faster pace. Over the past five years, goeasy stock has managed to grow a staggering 148%. That greatly outpaces the performance of the TSX over the same period.
Just like Canadian National, goeasy is an excellent dividend payer. Another Canadian Dividend Aristocrat, the company has managed to increase its dividend at a compound annual growth rate of about 30% over the past nine years. With a dividend-payout ratio of about 37%, goeasy still has a lot of room to continue growing its distribution over the coming years.
