Again in February 2021, Canadian Imperial Financial institution of Commerce launched a report that was co-authored by its deputy chief economist Benjamin Tal. The report revealed that Canadians who had lowered spending in the course of the COVID-19 pandemic firstly of this decade could possibly be sitting on greater than $100 billion in money. Spending habits have advanced over the previous two years, particularly as hovering inflation has weighed on client wallets.

As we speak, I wish to take a look at a high dividend inventory that’s properly value snatching up for Canadians who nonetheless have some further money to burn. Let’s soar in.

Canadian buyers: Why you shouldn’t maintain money on this local weather

Traders shouldn’t be so keen to sit down on their laurels after the worst of the pandemic. Inflation soared to beautiful new heights in late 2021 and all through 2022, spurring radical motion from central banks within the developed world. Your money is bleeding, as inflation soared to as excessive as 8.13% in Canada in June and was nonetheless 5.2% in February 2023.

Canadian buyers who need a reliable dividend inventory ought to look to Solar Life Monetary (TSX:SLF). This Toronto-based insurance coverage and monetary companies firm offers financial savings, retirement, and pension merchandise around the globe. Its shares have dipped 2.1% in 2023 on the time of this writing. The inventory is down 11% yr over yr.

Right here’s why I’m enthusiastic about Solar Life’s future

Solar Life has seen development sluggish for its main companies in North America and Europe. Nevertheless, its footprint in Asia gives main promise for the longer term. The expansion of the Asian center class signifies that there shall be a flood of recent customers within the insurance coverage and monetary companies house. Certainly, the World Financial Discussion board (WEF) just lately estimated that two billion Asians had been members of the center class in 2020. That quantity is ready to extend to three.5 billion by 2030.

This firm launched its fourth-quarter (This fall) and full-year fiscal 2022 earnings on February 8, 2023. In This fall 2022, Solar Life delivered underlying web revenue of $990 million and underlying earnings per share (EPS) of $1.69 — up from $898 million and $1.53 in This fall fiscal 2021. For the complete yr, insurance coverage gross sales rose to $4.32 billion in comparison with $3.67 billion within the prior yr.

General, Solar Life put collectively a robust 2022 on the again of its Canadian and United States enterprise. In the meantime, insurance coverage gross sales in Asia grew 9% however had been held again by poorer ends in China and Hong Kong. With luck, Solar Life’s insurance coverage and wealth companies will see enchancment in Asia because the worst of the pandemic is behind us.

Solar Life: The place is that this dividend inventory headed?

Shares of Solar Life closed at $27.72 on March 28, 2013. This dividend inventory was value $62.10 as of shut on March 27, 2023. That represents a 124% soar over a 10-year interval and a compound annual development price (CAGR) of 8.4% over the last decade. In the meantime, Solar Life gives a quarterly dividend of $0.72 per share. That represents a 4.6% yield.

Solar Life has achieved an annual dividend-growth price of 9.6% because the begin of 2020, growing its quarterly dividend from $0.55 at first of 2020 to $0.72 on the time of this writing. I’m going to plug in a really conservative dividend-growth price of 5% over the subsequent decade.

For our hypothetical, we had been capable of purchase 402 shares of Solar Life for $24,964.20. We’re going to apply a dividend-reinvestment plan (DRIP) over the subsequent decade. Assuming a CAGR of 8.4% and a conservative dividend-growth price of 5% that funding could be value $82,052.40 on the finish of the subsequent 10-year interval. With out reinvesting our dividends, that last worth would shrink to $71,215.87.