Most Canadian investors tend to invest close to home, and for good reason. Buying shares in a company one is familiar with, or which one is a member/customer of, can be a great starting point for understanding the underlying business of said firm.
In the energy industry, Canadian investors have a wide range of companies to choose from. That said, exploring opportunities outside of one’s comfort zone can provide a huge boost relative other Canadian investors, as diversification can provide real long term risk adjusted alpha that ultra-centralized investors will not obtain.
One U.S. energy stock I like is American Electric Power (NYSE:AEP). American Electric has been around for quite a long time, and for conservative long-term investor types, this is a gem when considering long term income potential.
The company has had a very stable and consistent history of dividend payouts, and what I like in particular about this company, is the rate at which AEP has continued to raise its dividend over time.
I’ve written a lot about Canadian companies that follow this mantra, such as Fortis Inc. (TSX:FTS)(NYSE:FTS); AEP is another company that definitely falls into this “dividend growth superstar” category for income investors.
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Yields continue to fall across the board, meaning income investors looking for bond proxies in the equity markets should look to companies like Fortis in Canada or AEP in the U.S. for income growth over time.
A growing dividend is the best way to ensure one’s income will not expire in retirement.
Invest wisely, my friends.