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MARKETS LIVE BLOG:

STOCKS CLIMB AS DOW POSTS 8TH STRAIGHT WIN

Fed's Michelle Bowman echoes higher-for-longer mantra for interest rates

3 Mainstay Stocks With 20-Year Dividend Streaks

Christopher Liew, CFA
Plant shoots on stacked coins
Plant shoots on stacked coins

Over the past few decades, a lot has changed for the Canadian investor. Life expectancy, for one, has steadily risen. With this development, you need to have financial support for a longer retirement period.

Imperial Oil (TSX:IMO)(NYSE:IMO), Canadian National Railway (TSX:CNR)(NYSE:CNI), and Empire (TSX:EMP.A) are Dividend Aristocrats with outstanding track records of dividend payments.

Industry mainstay

Imperial is one of the dominating energy stocks in Canada’s largest industry. This $25.2 billion oil-exploiting company will be around for the next 140 years to meet the country’s energy demands. American oil giant ExxonMobil owns almost 70% of Imperial.

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In North America, the significant interests of Imperial are in the Greater Sierra field of northeastern British Columbia and the southwest Northwest Territories. It also has ownership in the Athabasca sands.

Imperial conducts exploration and production on the upstream business and distribution and marketing on the downstream side. Canada is the best option if you want to have exposure to oil companies and oil-related assets. You won’t be an oil baron with Imperial, but you’ll have long-term financial support.

The company has a dividend streak of 24 years, and the 2.53% dividend today is sustainable for another two decades or more.

Railway to wealth

Many retirees invest in CNR not so much for the nearly 2% dividend but reliability and investment protection. This $80.87 billion railroad company has been paying dividends for 23 consecutive years. Not even once has it missed a payment, and in the past decade, CNR has also increased dividends.

The company can share surplus cash to shareholders because it maintains a 35% adjusted dividend-payout ratio. With the low payout ratio, CNR has more funds for investment in growth opportunities.

CNR has a network of irreplaceable assets that consist of 20,000 route miles of track. Over $200 billion worth of goods is transported through these rail lines. No company in the foreseeable future could replicate the success of CNR.

CNR is investing in technology to bring down operating costs, be more efficient, and see increasing cash flows in the near future. Only a few businesses can sustain profitability for over 100 years.

High margin of safety

Owning shares of Empire and reinvesting the dividends is a way to have financial sustenance for years. This top Canadian grocer is not among the highest dividend payers, but its lengthy payment history is an impressive feat. Empire’s dividend streak of 24 years is an indication that dividends are sustainable.

Empire maintains a low payout ratio of below 30% to have enough retained earnings to invest in future growth. This $9.89 billion company owns, affiliates, and franchises about 1,500 retail stores and 350 retail fuel locations.

Aside from grocery and food retail business, Empire has a stake in Crombie Real Estate Investment Trust, which owns, operates, and develops a portfolio of grocery- and drug store-anchored shopping centers, freestanding stores, and mixed-use developments.

In case there are no investment opportunities available, Empire has plenty of room to increase dividend payouts. With this consumer defensive stock, you have a high margin of safety for your investment.

Lasting income

The enduring businesses of Imperial, CNR, and Empire guarantee that you have sources of income for an extended retirement period.

More reading

Fool contributor Christopher Liew has no position in any of the stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway. Canadian National Railway is a recommendation of Stock Advisor Canada.

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