2 Stocks That Could Create Lasting Generational Wealth

A family can have greater financial security for years by passing down financial wealth and assets to
immediate family members. Financial wealth refers to money, savings, and investments, while assets
refer to houses, real estate properties, and jewelry. However, those without hard assets to give or leave
with heirs can build generational wealth through dividend investing. The stock market is not risk-free,
although a long investment timeframe helps reduce risk and counter recurring volatility. Canadians could
create lasting generational wealth by investing in the Bank of Montreal (TSX:BMO) and Canadian Utilities
(TSX:CU). The former is TSX’s dividend pioneer, while the latter is its first dividend king. The power of
compound interest comes into play if you reinvest dividends (four times a year) from both stocks. Your
capital grows faster and eventually becomes a fortune over time.

Dividend pioneer

BMO is Canada’s oldest bank and dividend pioneer. The dividend track record is 195 years and
counting. The prevailing dividend yield of 5% is not the highest in the market, but it is sure to be safe and
sustainable given the Big Bank’s solid payment history. You get peace of mind for the price of $126.33
per share. The $91.3 billion financial institution has a stronger position and presence in the U.S.
following the acquisition of the Bank of the West in February 2023. BMO finished the migration and
integration of customers in March of this year. The Group’s CEO, Darryl White, said the acquisition
added meaningful scale, expansion in attractive markets, and capabilities to drive greater growth,
returns, and efficiencies. Meanwhile, the appointment of Kristin Milchanowski as its new Chief Artificial
Intelligence and Data Officer in mid-October signals the bank’s AI, data analytics, and robotics
strategies to enhance business value. The Evident AI Innovation in Banking Index ranks BMO ninth in the
world in AI innovation. BMO is doing well after three quarters in fiscal 2024. In the nine months ending
July 31, 2024, revenue and net income increased 12.2% and 45.7% year-over-year respectively to $23.8
billion and $5 billion. According to White, BMO is well-positioned to deliver sustainable returns to
shareholders. Besides a strong balance sheet and robust capital and liquidity, strategic goals are firmly in
place.

Dividend king

Utility companies are stable and safe choices for income-focused investors. The TSX has plenty, but
Canadian Utilities stands out from the rest. This utility stock is Canada’s first dividend king, and the
magic number is “52,” the longest record of annual dividend increases by a publicly traded
company in the country. At $35.68 per share, current investors enjoy a 16.8% year-to-date gain on top of
the 5.2% dividend yield. The $9.6 billion company boasts a highly contracted and regulated earnings
base, the foundation for sustained dividend growth. Management said the company will invest $4.6 to
$5.6 million from 2024 to 2026 in regulated utilities to further grow cash flows and earnings.

Incredible feats

BMO and Canadian Utilities are compelling investments for their incredible dividend track record and
dividend growth streak, respectively. The dividend pioneer or dividend king can help you build lasting
generational wealth.
Buy 8,850 Shares of This Top Dividend Stock for $2,000/Month in Passive Income

Just like good wines get better over time, finding top-tier dividend stocks with the potential to continue
to provide growing dividend income (and stability) over time is difficult. Some may say impossible. And
generating $2,000 per month in passive income is something that may seem to be an unattainable goal,
at least over any reasonable timeframe. However, blue chip energy infrastructure company Enbridge
(TSX:ENB) is one of the best dividend stocks investors can buy for long-term passive income. At its
current price of $41.13 at the time of writing, buying 8,850 shares will get investors right to that $2,000
per month income. Such an investment would cost around $364,000, so creating this sort of passive
income won’t be cheap (and certainly comes with some capital risk). That said, here’s why I think making
such a large bet on Enbridge makes sense, particularly for those investors looking to diversify their RRSP
or other accounts and take a large position in one higher-yielding stock.

A dividend yield driven by stability

One of the reasons investors can generate $24,000 per year on a $364,000 investment is Enbridge’s
current yield of around 6.6%. That’s a yield I would put at the upper range of being comfortable,
considering once yields get toward the 10% level that’s a pretty good indication the market is likely
pricing in some dividend cuts moving forward. I don’t think that’s the case for Enbridge for a few
reasons. Most importantly, the company’s entire business model, which involves transporting and
delivering oil and natural gas from the source to its midstream clients, is extremely stable. So long as the
taps stay on (and they will need to, for at least a few more decades), investors can bet that Enbridge will
keep the profit taps on. And with the company delivering roughly 20% of all natural gas consumed in the
U.S. and 30% of all crude oil produced in North America, this is perhaps the best way to play this trade in
my books.

Why Enbridge looks like a long-term buy

Enbridge is a stock I think is worth holding for the long term in a retirement account, due in part to this
stock’s disproportionately high yield. And while I think this yield is sustainable, I do think some significant
capital appreciation is likely over time, given that the company’s valuation multiple is more attractive
than it’s been in the past. I keep going back to stability and Enbridge’s low-risk nature as the key
rationale I’d put forward for owning this name. With the energy independence discussion only heating
up (given rising geopolitical conflicts), Enbridge provides a nice patriotic option for Canadian investors to
consider with big upside potential over the next decade or two (at a relatively low beta). That’s hard to
find in this market.

Additionally, I think Enbridge should have more room to raise its distributions over time, as the company
pays down debt and improves its balance sheet. I would say this company’s management team is among
the best in the business. Thus, there’s a lot to like about the trajectory this company is on relative to its
stable operating business.

Simply put, this is a great option for investors looking to create meaningful passive income in retirement.
For those with the funds available to create a $2,000 monthly income stream, this would be a top option
of mine to consider right now.
This 5.9% Dividend Stock Pays Cash Every Month

Are you looking for a quality dividend stock that has a high yield and pays out cash every single month?

There aren’t too many of them around, but they do exist. Monthly pay dividend stocks are usually found
among smaller energy companies and real estate investment trusts (REITs). They aren’t always the
highest quality companies, but some of them are reasonably good investments. In this article, I will
explore one monthly-pay dividend stock that is of reasonably high quality, in addition to having a
monthly payout schedule.

First National

First National Financial (TSX:FN) is a Canadian non-bank lender that issues mortgages through brokers
nation-wide. The company does not operate off a branch model like banks, but instead partners with
brokers who find borrowers for FN to lend money to. First National specializes in lending to Canadians
who are fairly creditworthy, but are often cut off from bank financing due to having characteristics that
are frowned upon. Examples include self-employed people, freelancers, and retirees. People in these
categories are often denied financing despite having good credit scores, as their income sources are seen
as unreliable. Banks don’t refuse to lend to the categories of people listed above for no reason. They do
have certain risk factors that aren’t always captured in their credit scores. So most likely, First National’s
loan book is somewhat riskier than that of the average large Canadian bank. However, it is not extremely
risky, going by the bank’s interest rates. At 4.54% for a five-year fixed rate mortgage, the company’s rate
is actually lower than the one TD Bank offers for a five-year fixed mortgage. Interest rates are usually an
indication of how risky banks think a loan is. The fact that First National is charging rates similar to those
of the big banks indicates that it does not believe its borrowers are exceptionally risky. Now, FN could
simply be making a mistake here, and thinking its borrowers less risky than they actually are. However,
as a professionally run company with credit analysts and other such experts on staff, lm it’s risk
assessments are likely within the realm of sanity.

Respectable growth

For a high yield stock, First National has done a respectable amount of growth over the years. Over the
last five years, the company has compounded its revenue and earnings by 5.5% and 2.8%, respectively.
Over the last 10 years, the rates were 5.8% and 4.1%. Unfortunately, the company’s revenue and
earnings have declined this year due to the Bank of Canada’s rate cutting. It’s for this reason that I’d
prefer to wait for a cheaper price before buying this stock, rather than buy it right this minute.

High profitability

Another thing that FN has going for it is good profitability metrics. In the last 12 months, it had an 86%
gross profit margin, a 28% net income margin, and a 26.7% return on equity. These metrics indicate that
the company is very profitable.

Good assets

Last but not least, First National Financial holds high quality assets. It does not hold the mortgages it
issues for long, but instead securitizes and sells them to others. The resulting proceeds are then invested
into low risk assets like treasuries. This approach helps ensure that First National Financial remains a
sound and stable company.
Generate $175/Month in Passive Income With a $30,000 Investment

Creating a passive income stream with just one stock is possible but it’s usually not advisable,
especially if you are working with a substantial amount of capital. A diversified portfolio of dividend
stocks within your Tax-Free Savings Account (TFSA), which allows you to actually access the passive
income your dividend stocks are creating (tax-free), is considered more practical. But it doesn’t mean
that a substantial portion of your passive income cannot come from a single stock. Suppose you have
access to a reliable dividend stock with a solid payout history, a healthy business model, and a promising
future that is heavily discounted and offers a generous yield. As a result, you can park a sizable amount
of your capital in that stock. One such candidate is Telus (TSX:T).

Telus’ dividend yield and history

Telus is a telecom giant in Canada and one of the oldest dividend aristocrats – with 19 consecutive
years of dividend growth. The company is still raising its payouts and maintaining its status as an
aristocrat, even though the payout ratio is dangerously high. But the financials of the company are stable
and net income has improved in Q2 compared to Q1, by a significant margin. The company also
experienced a massive surge of new subscribers for their connected devices segment compared to Q2
2023. So, even if the payout ratio looks dangerous, the underlying fundamentals are solid. The
performance is another weak point of the stock, but it can also be considered a blessing from the
dividend perspective. The stock is trading at a 35% discount from its five-year peak and this slump has
pushed the yield up to a juicy 7%. At this rate, you can generate about $175 a month if you invest a bit
less than a third of a fully stocked TFSA in this stock – $30,000.

The company

There are several reasons why Telus is a compelling choice for parking a substantial portion of your TFSA
savings, starting with its position as a giant in the telecom industries (one of the three) and a blue-chip
stock. Its stellar dividend growth history is another reason. The business model is quite similar to that of
other telecom giants in the country, but Telus has a slight edge. It is also emerging as a leader in two
other spaces – home security and telehealth. Telehealth is a market segment with enormous
potential, even though it may take some time to gain significant traction parallel to conventional
healthcare. As a leader in this rapidly evolving field, Telus may gain an early bird advantage and cover a
considerable market segment before this space gets crowded.

Foolish takeaway

Telus is a robust dividend stock, especially now that the slump has pushed its yield up. It’s also stable
enough to divert a sizable amount of your total available investment capital. More importantly, it may
also prove to be a decent pick from a capital appreciation perspective when it goes bullish again.

In the last decade, Telus’ performance has been significantly better than that of the other two telecom
giants in the country, and if it reiterates its history, it can become an attractive pick for more than just
passive income.
Conoco Phillips, Philips 66 plus several more high yields ETFs

Neos Nasdaq -100 high income ETF, jp morgan Nasdaq equity premium income ETF, Schwabb us dividend
equity ETF

Verizon communications,AT&T, ishares national muni bond etf, vanguard high dividend yield index fund
ETF

Passive Income: How to Make $1,000 Per Month Tax-Free

Many Canadians dream of being able to achieve financial independence. If you’ve never heard that
term before, it essentially means that you’re able to live without having to depend on your job as
your primary source of income. Of course, it could take many years or even decades to achieve this goal.
However, I strongly believe that it’s possible for the average person to achieve it eventually. There are
many ways that investors can reach financial independence. One of the easiest ways is by creating a
source of passive income. If you’re able to make your money work for you, then chances are, you
won’t have to work very hard yourself. Although real estate is one way that many Canadians choose
to generate passive income, it can be very hard to enter that market. Due to the high barrier to entry,
most Canadians should focus on dividend stocks. These are stocks that pay shareholders on a recurring
basis simply for holding shares in the company. By investing in dividend stocks, you can start generating a
passive income today. Some dividend stocks even pay shareholders on a monthly basis, giving them a
more stable and consistent income than quarterly dividend stocks. Finally, by investing in a tax-
advantaged account like a Tax-Free Savings Account (TFSA), you can receive all of your dividends tax-free.
This could help you live much more comfortably knowing you don’t owe the government anything out
of your passive-income source. In this article, I’ll discuss a great monthly dividend stock that you should
consider holding in your portfolio today. This company pays its shareholders on a monthly basis. By
holding shares in a TFSA, you could generate a solid source of passive income that could help you live
much more comfortably. You could even retire earlier if you continue investing more funds into this
stock.

Which stock should you buy today for its monthly dividend?

There are many dividends in Canada that offer investors a monthly dividend. However, in my opinion,
Northland Power (TSX:NPI) is one of the most interesting options today. For those who aren’t familiar
with this company, know that it operates green power projects across the globe. Northland Power has a
presence in North and South America, Europe, and Asia. Although Northland Power’s monthly
dividend is quite small ($0.10) per share, I still think it’s worth buying today. The company offers
investors a forward dividend yield of 5.46%, meaning you’ll get great value for your money. At a
monthly dividend of $0.10, investors would need 10,000 shares to generate a monthly dividend of
$1,000. As of this writing, Northland Power stock trades at $21.98 per share. That means a minimum
investment of $219,000 will net you $1,000 per month.

Of course, most Canadians won’t have that kind of money just lying around. However, all you need to
do is start today. It may feel rewarding to see your dividend grow over time, helping you stay motivated
to keep putting new cash into this outstanding dividend stock.
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Here are some monthly dividend-paying ETFs:

Global X SuperDividend ETF (SDIV)

Global X SuperDividend U.S. ETF (DIV)
Invesco S&P 500 High Dividend Low Volatility ETF (SPHD)
WisdomTree U.S. High Dividend Fund (DHS)
Invesco Preferred ETF (PGX)
Invesco KBW High Dividend Yield Financial ETF (KBWD)
iShares Preferred and Income Securities ETF (PFF)
SPDR Dow Jones Industrial Average ETF Trust (DIA)
JPMorgan Equity Premium Income ETF (JEPI)
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ)
NEOS S&P 500 High Income ETF (SPYI)
Global X NASDAQ 100 Covered Call ETF (QYLD)
Global X SuperDividend ETF (SDIV)

The Roundhill Magnificent Seven ETF offers equal weight exposure to the “Magnificent Seven”
stocks – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla.
MAGS is the first-ever ETF to track the Magnificent Seven.