A Dividend All-Star I’d Buy Over Shopify Stock Any Day 

2024 is the year to rebalance your portfolio. You can book profits from growth stocks like Shopify and lock them into this dividend all-star.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shopify (TSX:SHOP) stock enjoyed a Santa Claus rally in the 2023 holiday season. Those who bought this e-commerce stock before the seasonal growth are now sitting on a 60% return. Is it feasible to buy Shopify stock closer to its blue moon high? Or would it be better to chase a dividend all-star that shines all year long? Let’s find out. 

Shopify stock at a blue moon high 

Every stock has different features. Shopify is a growth stock with seasonal revenue. Discretionary spending drives e-commerce volumes during holidays while spending on essentials gives them a base volume. With the holiday season over, it is time to start saving for the next holiday season. Most of the time, Shopify’s first-quarter revenue falls as holiday buying ends.   

Moreover, Shopify stock is trading above its pre-pandemic high. There is a high chance of correction. Now is the time to sell Shopify stock and not buy it. A good time to buy the stock would be in March or October, when it tends to fall.  

If you invested $10,000 in Shopify in October 2023, its value is now over $15,100. It is time to rebalance your portfolio and convert Shopify profits into relatively stable returns. 

A dividend all-star I can buy any day

Created with Highcharts 11.4.3Shopify + Bce PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

While Shopify stock corrected 4%, BCE (TSX:BCE) stock surged 4% in the first four days of 2024. The two stocks have been moving in opposite directions in 2023. But that does not mean they are correlated. The telecom stock has been in a bear momentum since April 2022, when the Bank of Canada began its interest rate hike. The stock slipped throughout the rate-hike cycle as higher interest expenses slimmed its profits. Moreover, the telecom sector saw a slowdown in its media segment, forcing it to cut jobs. However, rising 5G subscriptions kept its free cash flow positive and helped it maintain its 5% dividend growth in 2023.

The dip in BCE share price because of the above headwinds increased its dividend yield to 7.1%. Now is an opportune time to lock in a $3.87 dividend per share for decades for a stock price of over $54. 

How this dividend all-star can compound your Shopify earnings 

You could consider investing your profits from Shopify into BCE. A $5,000 investment would buy you 91 shares of BCE, but I would suggest rounding off your purchase to 100 shares by adding some amount from your pocket.  

YearBCE Stock Price
3.2% CAGR*
Annual InvestmentBCE DRIP SharesBCE Share countBCE Dividend per share (5% CAGR)Total dividend
2024$55.00$5,500.00100100$4.06$406.00
2025$56.76$406.007107$4.26$456.14
2026$58.58$456.148115$4.48$514.76
2027$60.45$514.768123$4.70$578.09
2028$62.39$578.099132$4.93$651.41
2029$64.38$651.4110142$5.18$735.80
2030$66.44$735.8011153$5.44$832.44
2031$68.57$832.4412165$5.71$942.62
2032$70.76$942.6213178$6.00$1,067.73
2033$73.03$1,067.7315193$6.30$1,215.59
2034$75.36$1,215.5916209$6.61$1,382.18
How BCE can convert $5,500 into $1,380 in annual passive income.

If BCE continues growing its annual dividend by 5%, your 100 BCE shares could give you $406 in dividend income by the end of 2024. Instead of taking a payout, you could reinvest the dividend to buy more shares of BCE. The stock has grown at a 3.2% compounded annual growth rate (CAGR) in the last 10 years. Hence, I assume the stock price to continue this 3.2% growth in the coming 10 years. 

If you keep reinvesting your dividend, you could accumulate another 109 shares by 2034 from the $5,500 you invested today. Technically, you have grown your invested capital and dividend income severalfold. 

Going by the above expectation, 209 BCE shares could be worth $15,750 (209 shares x $75.36) and give you $1,382 in annual dividends if the growth remains stable. Looking at these returns estimates, your $5,500 could grow at a 10.8% CAGR. 

Investor takeaway 

Booking profits from growth stocks and locking them into dividend stocks is an effective way of rebalancing your portfolio and reducing risk. 

Should you invest $1,000 in BCE right now?

Before you buy stock in BCE, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and BCE wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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.

The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned. 

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

The Best Canadian Stocks to Buy Right Away With $30,000

If you have $30,000 you're willing to invest, these are some of the first Canadian stocks to consider on your…

Read more »

rail train
Dividend Stocks

What to Know About Canadian Pacific Railway Stock for 2025

CP stock has now gone through a major merger, so what do investors have to look forward to?

Read more »

ways to boost income
Dividend Stocks

Top Canadian Value Stocks I’d Buy for Dividend Growth and Appreciation

If you are looking for income and capital appreciation, here are three Canadian value stocks for a great total return…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Canadian Stock to Buy With $2,000 Right Now

The company’s powerful combination of growth, income, and value, positions it well to deliver solid returns, making it a smart…

Read more »

Transparent umbrella under heavy rain against water drops splash background. Rainy weather concept.
Dividend Stocks

This 10.6 Percent Dividend Stock Pays Cash Every Single Month

Are you looking to invest for a rainy day? This 10.6% dividend stock pays cash every month, irrespective of the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Market Dip: Opportunity or Risk This April?

This market dip might have investors worried, but should they be excited instead?

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Why I’d Add This Top TSX Dividend Stock to My TFSA During the Current Dip

The market is full of volatility right now. Fortunately, this top TSX dividend trades at a discount and pays a…

Read more »