A Top-Performing U.S. Stock That Canadian Investors Really Should Own

There are plenty of long-term opportunities for Canadian investors who are willing to look outside of Canada. One U.S. stock in particular offers a unique mix of growth, stability, and income-earning potential.

That stock is Microsoft (NASDAQ:MSFT). Not only has it delivered decades of market-beating performance, but the tech giant continues to expand its earnings, raise its dividend, and grow its product portfolio.

For Canadians seeking a dependable U.S. stock with both growth and income potential, Microsoft remains one of the strongest long-term options available.

Microsoft: A long-term U.S. stock compounder

When it comes to compounders on the market, Microsoft is one of the silent titans. The company’s diversified business includes cloud computing, enterprise software, gaming, productivity, and cybersecurity.

This gives Microsoft a unique defensive appeal that few tech companies can come close to achieving. Specifically, Microsoft’s deep inroads into consumer, productivity, enterprise, and gaming provide a diversified, growing revenue base.

Major callouts in that portfolio include both Azure and Microsoft 365. The former is a massive growth engine in the cloud space, while the latter generates predictable, recurring subscription-based revenue. In short, that’s allowed this U.S. stock to outperform the market and become a must-have for investors.

Why Microsoft works so well for Canadian investors

For Canadians, Microsoft offers more than just performance. Holding U.S. stocks provides diversification, helping to offset periods of currency weakness.

The company’s global reach and essential software ecosystem also make it an appealing option for Canadian investors looking for a U.S. stock. Microsoft’s defensive moat is a rarity in the tech space, making it a durable foundation for long-term growth.

Despite being known as a growth stock, Microsoft also offers investors an attractive dividend that the company has provided hikes for over two decades. That dividend is supported by a conservative payout ratio and free cash flow. This allows the tech titan to continue expanding its earnings power while maintaining a strong competitive position.

A quiet but powerful dividend growth story

While Microsoft is known for its growth, it is also a strong dividend stock. The company has raised its dividend for more than two decades, supported by enormous free cash flow and a conservative payout ratio. This gives Microsoft plenty of room to continue increasing its dividend for years to come.

The dividend may not be the highest on the market, but its consistency and growth rate make it a valuable addition for long-term investors. Microsoft’s ability to grow earnings and cash flow steadily means the dividend is well supported and positioned to rise over time.

As of the time of writing, Microsoft offers a 0.91% yield. That’s not the highest yield, but it is well-covered and growing.

Microsoft: The U.S. stock your portfolio needs

Microsoft is one of the few U.S. stocks that Canadian investors can buy with confidence. It offers long-term growth, dependable dividend increases, and a level of stability that makes it a core holding in any diversified portfolio.

Even during periods of market volatility, Microsoft holds up better than its big tech peers. That stability comes thanks to its multiple recurring revenue streams and enterprise contracts that provide predictable earnings.

This stability makes Microsoft a reliable anchor for any portfolio. Investors who want exposure to tech without taking on excessive risk often turn to Microsoft as a core holding.

For Canadians looking to diversify with a high-quality U.S. stock, Microsoft remains one of the most compelling long-term choices on the market for any diversified portfolio.

The post A Top-Performing U.S. Stock That Canadian Investors Really Should Own appeared first on The Motley Fool Canada.

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Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. The Motley Fool recommends Microsoft. The Motley Fool has a disclosure policy.