2 Stocks I’ll Be Adding to My RRSP in September

Are you looking for some RRSP investments for long-term passive income? These could turn even a small investment into huge funds.

| More on:
stock research, analyze data

Image source: Getty Images

Even $100 can turn into a significant investment over time thanks to the magic of compound interest and consistent investing. When you invest, your money starts to earn returns, and those returns then start earning returns as well. Over time, this snowball effect can lead to impressive growth. The key is to start early, be consistent, and let time do its work, turning that modest $100 into a much larger sum. And if you do this again and again in a Registered Retirement Savings Plan (RRSP), these returns could be substantial. So, let’s look at two I’m considering this month.

SmartCentres

If you’re looking to invest even a small amount, SmartCentres Real Estate Investment Trust (TSX:SRU.UN) could be a fantastic choice! With occupancy rates soaring to an impressive 98.2% as of June 30, 2024, SmartCentres demonstrates solid demand for its properties, having leased approximately 272,000 square feet of vacant space in just one quarter. This consistent leasing momentum, combined with rent growth of 8.5% (excluding anchors), indicates a strong and resilient business model. The company’s commitment to expanding its mixed-use development pipeline, including new rental projects and self-storage facilities, positions it well for future growth.

Another reason to consider SRU.UN is its attractive dividend yield of about 7.24%. For those new to investing, this high yield means you can earn income while also benefiting from potential stock price appreciation. With a forward annual dividend rate of $1.85, you could receive a solid return on your investment even in the early stages of your investment journey.

Finally, the overall financial health of SmartCentres adds another layer of confidence for investors. Despite challenges in the broader market, the Trust has managed to maintain a strong profit margin of 29.07% and a reasonable payout ratio of 115.32%. With a market cap of around $4.35 billion and a commitment to prudent financial management, SmartCentres is a solid pick for your RRSP. Whether you’re a seasoned investor or just dipping your toes into the market, SRU.UN could provide both stability and growth potential for your portfolio.

North West Company

If you’re considering an investment in an RRSP, The North West Company (TSX:NWC) is a strong candidate to add to your portfolio. With its recent financial results showcasing a 4% increase in consolidated sales, reaching $617.5 million, it’s clear that NWC is thriving. The company’s same-store sales rose by 3.8%, demonstrating its ability to drive growth through existing operations. Plus, its focus on operational excellence means they are dedicated to ensuring its shelves are stocked, and its customers are satisfied — a combination that leads to loyalty and repeat business.

NWC is also making waves with its robust dividend, declaring a quarterly payout of $0.39, which translates to an annual yield of around 3.42%. This means that your investment could earn you some nice passive income! The company has a solid payout ratio of just under 56%, indicating that it is distributing a reasonable portion of its earnings to shareholders while still retaining enough to reinvest in growth. With such a dividend policy, NWC not only provides immediate returns but also demonstrates a commitment to rewarding its investors.

Lastly, the financial metrics speak volumes about NWC’s stability and growth potential. With a profit margin of 5.37% and a return on equity of 20.19%, NWC shows it can effectively turn revenues into profits while providing good returns for shareholders. The company’s recent 22.2% increase in quarterly earnings further emphasizes its upward trajectory. Investing in NWC isn’t just about grabbing a piece of the action. It’s about being part of a company that is poised for continued success while also being rewarded for your RRSP investment.

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends North West and SmartCentres Real Estate Investment Trust. The Motley Fool has a disclosure policy.

More on Retirement

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

The Average TFSA at Age 50: Where Do You Stack Up?

The TFSA is a great way to save for retirement and during it, but what if you're still short of…

Read more »

Senior uses a laptop computer
Retirement

Here’s Why the Average RRSP for Canadians Age 65 Isn’t Enough

The RRSP is an excellent way to save for retirement. Yet most Canadians don't have enough! Here's how to catch…

Read more »

Senior uses a laptop computer
Retirement

Dividend Fortunes: 2 Canadian Stocks Leading the Way to Retirement

These two TSX stocks with an excellent track record of dividend growth are ideal for your retirement portfolio.

Read more »

Canada day banner background design of flag
Retirement

RRSP Wealth: 2 Great Canadian Dividend Stocks to Buy in November

Investors in these stocks have received annual dividend increases for decades.

Read more »

Close up of an egg in a nest of twigs on grass with RRSP written on it symbolizing a RRSP contribution.
Dividend Stocks

3 Evergreen RRSP Stocks Every Canadian Investor Should Own

If you're looking into RRSP stocks, it's quite likely you've come across these on many, if not all, of the…

Read more »

Hand Protecting Senior Couple
Retirement

These 2 Dividend ETFs Are a Retiree’s Best Friend

These two dividend ETFs could provide retirees with a diversified and stable income stream, while providing some price appreciation.

Read more »

coins jump into piggy bank
Retirement

Here’s the Average RRSP Balance at Age 44 for Canadians

Holding stocks like Alimentation Couche-Tard (TSX:ATD) in an RRSP is a good way to build your wealth.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »