Dividend-dependent portfolios and wealth creation strategies, especially those that use the DRIP, leverage the power of capitalization. This requires giving your investments enough time to grow. But if you’re building an investment portfolio to start a passive income stream, you need to look for a higher return, which is relatively difficult to find if you shop exclusively among aristocrats.
But the current market crash has changed that.
A printing and media company
Transcontinental (TSX: TCL.A) is an 18 year old Dividend Aristocrat. The company increased its dividends, even during the last recession, and is still growing. The company is considered the largest printing company in the country and is also one of the largest flexible packaging companies in North America.
Currently, the company is trading at 28% of its pre-crash value at a price of $ 12.25 per share. Falling market prices boosted returns, and it is now very profitable at 7.29%. If you allocate $ 20,000 from your TFSA to invest in this aristocrat, you can expect more than $ 120 per month in passive income. He has increased his payments by 21% in the past five years.
An international band company
Intertape Polymer (TSX: ITP) is considered one of the leaders in a niche product (i.e. a ribbon). The company operates in 22 manufacturing plants in North America, four in India and one in Germany. The product portfolio includes water activated and pressure sensitive ribbons in addition to conventional products. The company has a market capitalization of $ 584 million.
Intertape increased its payments for seven consecutive years, earning the title of Aristocrat. The company is currently offering an attractive yield of 8.27% at a greatly reduced price of $ 9.9 per share. $ 20,000 in this business will earn you about $ 138 a month in passive income.
A bank that is not part of the Big Five
Laurentian Bank (TSX: LB) is one of the oldest aristocrats in the financial sector. He increased his payments for 12 consecutive years. The share price remained relatively stable throughout 2019 and almost throughout the first quarter of 2020. But at the moment, the bank is trading at a 10-year low of $ 29.4 per share. .
The yield he is offering right now is monstrous, especially for a dividend aristocrat. At 8.9%, you have a chance of earning almost $ 150 per month with an investment of $ 20,000 in this bank.
For value investors and dividend lovers, this is the best time to load their portfolios with incredible stocks. Everything is at a great price right now. If you can block the current high returns of a few aristocrats, your payments are likely to increase in the future, inflating your passive income.
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Crazy contributor Adam Othman has no position in any of the titles mentioned. The Motley Fool recommends TRANSCONTINENTAL INC A.