Canada markets closed
  • S&P/TSX

    -367.07 (-1.65%)
  • S&P 500

    -39.09 (-0.74%)
  • DOW

    -411.32 (-1.06%)

    -0.0047 (-0.64%)

    +0.10 (+0.13%)
  • Bitcoin CAD

    -1,234.28 (-1.31%)
  • CMC Crypto 200

    -30.12 (-2.03%)

    -3.60 (-0.15%)
  • RUSSELL 2000

    -30.66 (-1.48%)
  • 10-Yr Bond

    +0.0820 (+1.81%)
  • NASDAQ futures

    -54.25 (-0.29%)

    +1.36 (+10.53%)
  • FTSE

    -71.11 (-0.86%)
  • NIKKEI 225

    -298.50 (-0.77%)

    -0.0007 (-0.10%)

1 Grade A Dividend Stock Down 11% to Buy and Hold Forever

Growth from coins
Image source: Getty Images

Written by Amy Legate-Wolfe at The Motley Fool Canada

When it comes to investing in dividend stocks, there are a lot of considerations at play. But perhaps the largest concern is whether or not that dividend can continue long term. That’s why we’re focusing on a dividend stock investors can buy, and hold onto as long as they want!

Yet how do you even start? After looking at the industry, you’ll need to then seek out the right stock offering growing dividends and value. Which is exactly what we’re going to do today.

The right industry

When it comes to investing in the right industry, one area where dividend stocks have seen success is in the insurance asset management sector. This sector provides stable cash flows as insurance companies typically regularly collect premiums. Furthermore, asset management companies also earn fees, providing consistent revenue streams as well. This all adds up to consistent dividends.


What’s more, insurance and asset management companies also provide essential services, which can continue even during economic downturns. We need insurance coverage and asset management even during these hard times, helping keep your portfolio resilient.

These dividend stocks also provide a great long-term investment as their own investments tend to be long-term in nature. This can help create stable cash flow for you, allowing you to increase your dividends as you go. And what’s more, it also means the company focuses on increasing its dividends as well!

The right stock

There are a lot of insurance and asset management companies on the TSX today, and many of them are doing quite well. And honestly, I’m not going to say you shouldn’t consider these stocks. But if you’re looking for some value, there is one that provides this as it’s still down from 2021 highs.

That stock is Power Corporation of Canada (TSX:POW), a diversified international management and holding company with a variety of interests. These include financial services, renewable energy, and communications. This huge diversification mitigates risks rather than relying on just one industry or market segment for dividend income.

What’s more, the company operates in the stable insurance and asset management sectors. It has a long history of dividend payments and growth from this focus as well. Power stock offers a healthy balance sheet, strong financial position, and robust cash reserves. All this stability helps to enhance its ability as well to continue paying dividends.

The right price

Again, what makes Power stock the right choice comes down to the price. While Power stock is up 15% in the last year, look back and it’s still down 11% from 2021 highs. While it’s climbing back towards those prices, there is still time to latch on. Especially while it trades at just 15.5 times earnings as of writing.

As for the dividend, the dividend stock currently sits at a drool-worthy 5.35%, producing $2.10 per year in annual dividend income. So if you’re looking for a strong investment that’s only going to grow, while adding even more dividend income, consider this stock. While the sector is certainly one most investors should get into, Power stock simply provides the right stock, at the right price.

The post 1 Grade A Dividend Stock Down 11% to Buy and Hold Forever  appeared first on The Motley Fool Canada.

Should you invest $1,000 in Power Corporation of Canada right now?

Before you buy stock in Power Corporation of Canada, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Power Corporation of Canada wasn’t one of them. The 10 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 $15,578.55!*

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 32 percentage points since 2013*.

See the 10 stocks * Returns as of 3/20/24

More reading

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.