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Dividend-growing stocks, especially among non-financials, could be timely investment choice during the recent bout of market volatility.
UBS strategist George Vasic points out that among TSX 60 constituents, four stocks have a solid 10-year record of dividend growth, and have outperformed the index by 390 basis points, with less volatility since 1995.
They are Canadian National Railway Co., Enbridge Inc., Imperial Oil Ltd. and Thomson Corp., which Mr. Vasic writes “appear attractive for investors who want dividend growers with additional sector diversification.”
Moreover, four consumer stocks that appear to be establishing a dividend growth record are Canadian Tire Corp., Rogers Communications Inc., Shaw Communications Inc. and Shoppers Drug Mart Corp., he adds.
Of course, financial stocks continue to have an “impressive record of dividend growth,” he notes, predicting that dividends should still grow in line with profits at around 7 per cent, and with yields are about 3 per cent, provide an overall return of about 10 per cent, which is at or above that for the market as a whole.
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