For Canadian traders trying to construct long-term wealth, the perfect inventory affords each dependable dividends and regular capital appreciation. These two revenue streams, when mixed, can present highly effective compounding over time. 

Listed here are three prime Canadian shares I’d purchase for each dividends and capital progress. What’s frequent amongst them? All of them have sturdy enterprise fashions and confirmed histories of accelerating shareholder worth.

Dollarama

Dollarama (TSX:DOL) is a Canadian retail success story. With over 1,600 low cost shops nationwide, it sells a broad vary of low-priced family items, seasonal objects, and get together provides — all priced to attraction to cost-conscious shoppers. Categorized underneath the patron defensive sector, Dollarama tends to thrive even throughout financial downturns as buyers more and more search worth.

Whereas its dividend yield is a meagre 0.2%, that’s not the place the attraction lies. Dollarama’s actual energy is in capital appreciation and robust dividend progress. Over the previous decade, the corporate has multiplied traders’ capital greater than sixfold — turning a $10,000 funding into over $63,000. This equates to an annualized return of roughly 20%.

Its dividend progress has been equally spectacular. Dollarama has elevated its dividend at a five-year compound annual progress fee (CAGR) of roughly 15%. Sadly, the inventory seems to be costly in the present day, buying and selling at a ahead price-to-earnings (P/E) ratio of 40 — its highest in historical past. Any weak spot would make the inventory extra appetizing.

Imperial Oil

Imperial Oil (TSX:IMO) is one in all Canada’s main built-in vitality firms. With a enterprise spanning oil sands manufacturing, refining, and retail distribution (by way of Esso and Mobil), Imperial is well-positioned to ship sturdy shareholder returns throughout commodity cycles.

Up to now 10 years, Imperial turned a $10,000 funding into practically $38,500, an annualized return of 14.4%. Its dividend efficiency has been nothing in need of stellar, with a 10-year CAGR of 16.5% and a good stronger five-year fee of 23%. That degree of constant progress is strictly what long-term traders need.

Presently, the inventory yields about 2.3% and trades at round $126 per share. It’s had an enormous run — up 32% over the previous 12 months — so traders might choose to attend for a pullback.

Manulife

Manulife (TSX:MFC) is a significant participant within the world monetary providers house, providing insurance coverage, wealth administration, and monetary advisory providers. Its operations stretch throughout Canada, the U.S., Asia, and Europe — offering broad geographic diversification and progress potential.

A $10,000 funding in Manulife 10 years in the past would now be price roughly $32,830, representing annualized returns of 14.6%. Its dividend progress observe file is powerful, with each five-year and 10-year CAGRs sitting round 10%.

At about $43 per share, Manulife seems fairly priced, buying and selling at a modest P/E of 10.9. Extra importantly, it affords a beautiful dividend yield of simply over 4%. The inventory has been consolidating since late 2024, which can be a cue for income-seeking traders to take a nibble.

Investor takeaway

These three Canadian firms supply completely different paths to the identical purpose: a rising revenue stream paired with long-term capital good points. Dollarama gives progress, Imperial Oil affords excessive dividend-growth potential from vitality, and Manulife affords revenue with world publicity. Collectively, they make a robust trio for any long-term investor, although it will be great if they may pull again to offer safer entry factors.