If you are looking for the right buy-and-forget stocks, one category worth looking into is stocks that offer a healthy mix of dividends and growth potential. They can help you generate a dividend income while growing your capital, and the longer you hold them, the higher your overall returns might be, assuming there are no significant performance or dividend-related setbacks. Here are two stocks that fit this bill.
Energy stocksÂ are better known for their dividends, but there are several growth-oriented picks in the sector as well, especially when the market conditions are favourable. One good example is Canadian Natural Resources (TSX:CNQ), one of the largest independent energy companies in Canada.
Its asset portfolio is its most significant strength. The company has the largest reserves in Canada and one of the largest in the world — roughly five billion barrels ofÂ oilÂ equivalent. It’s also the largest crude oil producer in Canada and the second-largest natural gas producer. The reserve life index is currently at 16, making it a solid prospect for at least a decade.
The stock is a great pick for both dividends and growth, especially in the right market conditions. It made a relatively swift recovery after the 2014 slump of the energy sector in Canada, and compared to most other energy companies, it maintained a healthy stability in the years preceding COVID.
After the 2020 crash, the stock rose at an astonishing pace and has grown over 600% from its March 2020 value. This is exceptional, considering the fact that it’s a large-cap company.
It offers a healthy dividend yield of about 4.55%, thanks to the generous dividend growth it has experienced in the last five years, with payouts going from $0.375 a share to $1 a share.
Brookfield Asset Management (TSX:BAM) is a relatively new stock representing an old, trusted name. It was spun out from the Brookfield corporate umbrella in December 2022 and retained the name while the parent corporation adopted a new name.
This $19 billion asset management company has roughly $800 billion worth of assets under management, more than half of which are in North America. The overall portfolio is spread out over 30 countries and is managed by a team of 2,500 professionals.
Even though it is a relatively new stock and has joined a fluctuating market, the overall returns since inception (less than a year ago) are positive at 24%. It also offers dividends at a yield of about 3.8%.
There is not enough data to gauge its growth potential, but considering the performance of the original Brookfield Asset Management, it’s likely to offer decent long-term growth potential to its investors.
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The two blue-chip stocks offer a healthy combination of growth and dividends and have adequate long-term stability. However, it’s prudent to take their weaknesses into account as well. Brookfield stock has yet to prove its potential, and Canadian Natural Resources, even though it’s resilient for an energy stock, is still vulnerable to major headwinds in the sector.
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* Returns as of 11/14/23
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Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Asset Management and Canadian Natural Resources. The Motley Fool has a disclosure policy.