Christopher Liew, CFA
·4 min read
Written by Christopher Liew, CFA at The Motley Fool Canada
Dividend investing is a proven strategy for generating extra income, improving profits, and gaining from price appreciation. Still, some income-focused investors bent on ensuring uninterrupted cash flow streams will turbocharge their investments with dividend growers or the so-called dividend aristocrats.
These elite dividend payers have raised their dividends by at least five consecutive years. However, Canadian Natural Resources (TSX:CNQ), ATCO Ltd. (TSX:ACO.X), and Brookfield Infrastructure Partners (TSX:BIP.UN) are better choices because their dividend growth streaks are beyond the minimum requirement.
Energy – 23 Years
In January 2001, the Board of Directors of Canadian Natural Resources approved a dividend policy (quarterly payout), and since then, it has raised its dividend yearly. At $48.33 (+13.8% year-to-date), the dividend offer is 4.1%. The $103.2 billion company is a crude oil, natural gas, and natural gas liquids producer whose assets generate significant shareholder value.
Canadian Natural developed its Oil Sands Mining and Upgrading to have a long-life low-decline asset base. The asset portfolio is now one of the most balanced and diverse among the independent energy producers in the world. In addition to the focus on development, the company is a consolidator. It augments development with strategic acquisitions.
The blue-chip industry player will present its Q2 2024 results on August 1, 2024. In Q1 2024, net earnings fell 166.2% year-over-year to $987 million. Its President, Scott Stauth, said the 2024 plan is strategically weighted to shorter cycle growth projects in the second half of the year. He added that the company will return 100% of free cash flow (FCF) to shareholders starting this year.
Utility – 29 years
ATCO, a diversified utility company, has a 29-year dividend growth streak. If you invest today, the share price is $38.97 (+3.9% year-to-date), while the dividend yield is 5%. The $4.4 billion diversified company has eight operating subsidiaries and affiliate firms. They provide diverse products and services across various industries.
Besides the 105,000-kilometre electrical powerlines, ATCO operates 64,000 kilometres of natural gas pipelines. In Q1 2024, revenue declined 2.6% to $1.3 billion versus Q1 2023, while adjusted earnings increased 7.4% year-over-year to $148 million.
On June 26, 2024, ATCO Enpower, a subsidiary, announced it was partnering with Shell Canada Limited to commence phase one of the Atlas Carbon Storage Hub. The multi-phase, open-access carbon storage hub is ATCO’s commitment to reducing greenhouse gas (GHG) emissions.
Infrastructure networks – 15 years
Brookfield Infrastructure has enormous growth potential. The $17.6 billion company owns and operates global infrastructure networks from utilities, transport, and midstream to data businesses. The reach is North and South America, Europe, and the Asia Pacific. At $38.02 per share, you can partake in the 5.8% dividend yield.
“The benefits of inflation indexation, better than expected economic activity and strong contributions from new investments have favourably impacted our financial results,” said Sam Pollock, CEO of Brookfield Infrastructure. In Q1 2024, net income ballooned 86.5% to US$170 million compared to Q1 2023.
Because the base business is performing well with the support of capital recycling, Pollock said the company is positioned for success over the rest of 2024.
Turbocharge now
Investors looking to turbocharge their investments should buy Canadian Natural Resources, ATCO, or Brookfield Infrastructure without hesitation.
The post 3 Dividend Aristocrats That Could Turbocharge Your Investments appeared first on The Motley Fool Canada.
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Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners and Canadian Natural Resources. The Motley Fool has a disclosure policy.
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