An important dividend inventory could be simply what you want throughout these making an attempt occasions. They will offer you strong passive earnings you can count on frequently. However what if I had been to inform you that the perfect use of these funds wasn’t to absorb the money? As a substitute, it was to make use of that money to reinvest proper again into the dividend inventory?

That’s what I’m going to suggest doing as we speak — together with a dividend inventory yielding 6.4%. Why? Let’s get proper into it.

The dividend inventory to think about

In the event you’re on the lookout for a long-term dividend inventory to carry, then you definately wish to have a look at Dividend Aristocrats. These are dividend shares which have elevated their dividend yr after yr for over 25 years, which is strictly why as we speak I like to recommend BCE (TSX:BCE).

BCE inventory has been available on the market for the final 40 years, although the Bell Firm has been round because the 1800s. That ought to spell out stability, however, after all, it has opponents on this century. Even so, BCE inventory has confirmed it could possibly tackle these opponents and nonetheless come out on high.

This comes from the corporate persevering with to tackle 60% of the market share amongst different telecom firms. It additionally boasts the quickest web speeds of the bunch, rolling out its 5G community and transferring ahead with 5G+.

But it’s the longer term that buyers must be desirous about. On this case, BCE inventory is sure for progress. Telecommunications firms are robust, certain. However these are about to grow to be even stronger, as infrastructure to broaden web throughout the nation continues to be constructed. That’s why not solely is the dividend yield of 6.4% protected for this dividend inventory, it’s prone to proceed increasing.

Some historical past to think about

BCE inventory has seen lots of progress through the years. Shares of the inventory are down 12% within the final yr, however up 34% within the final decade. This involves a compound annual progress price (CAGR) of three.19% over that point.

The dividend, nonetheless, is extra spectacular with a CAGR at 5.2% within the final decade alone. And for those who’re on the lookout for progress, BCE inventory is definitely going to enhance with the rollout of extra web throughout the nation — particularly because it continues to have a powerful maintain over most Canadian customers.

Whereas these numbers aren’t the very best on the market, they definitely look steady. And stability is what you need for those who’re seeking to get wealthy within the years to return. So, let’s have a look at what a $20,000 funding might get you in only a decade, when you reinvest your dividends alongside the way in which.

As you’ll be able to see, your shares may have greater than doubled in only a decade. That’s by solely investing dividends and never including one other penny after your preliminary funding.