On the surface, it looks like Dogecoin is an exciting prospect. The cryptocurrency had the magical properties that turn a few dollars into millions. That’s especially with billionaires like Elon Musk hopping on the bandwagon. But what if I told you there was a dividend stock that could provide you with the same growth and a lot more safety?
The problem with crypto
There is a really big problem with cryptocurrency, something that investors like Warren Buffett warn investors about. Cryptocurrencies, like Dogecoin, are similar to gold. Its worth is only what people make of it. There are no uses for it beyond as a currency, so it’s really whatever arbitrary number we attribute to it.
That’s a problem, as it’s begging for a crash. While I don’t disagree that cryptocurrency is likely the future, the problem is that governments are already picking up on this. The Canadian government believes it will one day soon offer cryptocurrency similar to Dogecoin and in a far more environmentally friendly way.
When governments get on board, it means the price of cryptocurrency is either likely to slow to a trickle or crash. And that’s what I don’t like about the future of this industry. Instead, you can look for a dividend stock that can give you that sustained growth, with no fear of a future crash.
Dogecoin versus dividends
So, if you really want to make more than Dogecoin, let’s get real here and look at the numbers. In the past year, Dogecoin has seen an increase in returns of about 14,380%. That’s a lot. But let’s also consider the drop as well. Since the pullback, shares of Dogecoin have dropped by 28%. Considering that’s pennies, that can hurt a lot if you have a massive investment in this cryptocurrency.
Let’s say you managed to get in a year ago with Dogecoin and didn’t hop on the bandwagon. But now you want to take your returns as see similar returns over the next few decades in a more secure stock. That would definitely be a dividend stock.
It may not seem possible, but even a $10,000 investment could absolutely make you that 14,380% in just a few decades. Let’s look at one solid dividend stock to get you there.
Instead of investing in high-risk cryptocurrency like Dogecoin, consider the energy sector. In particular, Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) is an excellent option, given the room for growth over the next few decades.
Whereas cryptocurrency like Dogecoin depends on private investment mainly, renewable energy is likely to see upwards of $10 trillion in global investment over the next decade. So, even if we just go by today’s numbers, you should take into consideration that this industry is also set to explode in the coming years.
But let’s just look at Brookfield as it is. Shares of this dividend stock have risen by 2,394% in the last 20 years as of writing. That’s a compound annual growth rate (CAGR) of 17.44%, astounding on its own. On top of that, it has a 3.15% dividend yield that’s risen at a CAGR of 1.37% over the last decade.
So, let’s say that continues for 30 years. If you were to put $10,000 into this dividend stock today and only reinvest dividends. In 30 years, your original $10,000 portfolio would be worth $1,510,838. That’s an increase of about 15,000% in that time! That would make you more than Dogecoin and is a much more stable investment.
The post 1 Dividend Stock That Could Make More Than Dogecoin appeared first on The Motley Fool Canada.
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Fool contributor Amy Legate-Wolfe owns shares of Brookfield Renewable Partners.