Mr. Market is reminding us that stocks don’t always go up, and the recent volatility has some investors searching for more stability and bit less bling.
Here are the reasons why I think conservative dividend investors should consider and Telus Corporation (TSX:T)(NYSE:TU), Metro Inc. (TSX:MRU), and Fortis Inc. (TSX:FTS).
Telus Corporation
Telus has avoided the temptation to buy media assets and sports teams. This might make it more boring than its peers, but it also allows the company to focus its investments on things that really matter to its clients.
Telus is committed to delivering the best possible service to its customers. The strategy is working because the company has the industry’s lowest mobile churn rate and regularly boasts the top average revenue per user. On the wireline side, Telus TV and Internet customers are signing up at impressive rates, with many migrating from the cable operators.
Telus is a dividend machine. The company has increased the payout 11 times in the past five years, and also returns cash back to shareholders through its aggressive share repurchase program.
The distribution of $1.68 per share is very safe and yields a nice 3.9%.
Metro
If you live in Ontario or Quebec, you have certainly spent some money at Metro’s grocery or pharmacy stores.
The company operates 800 grocery locations in the two provinces, providing shoppers with a wide variety of options from premium brands to bargain offerings. This is important for investors because it means the company does well regardless of the economic environment.
Metro also runs 250 drug stores that help their local residents stay healthy while also providing quick access to some of the daily essentials we all need in a pinch.
The overall business is very well run and continues to deliver solid results. In its latest earnings statement, Metro reported a 6.1% year-over year increase in sales and an impressive 13.1% gain in net earnings.
The company has increased its dividend significantly in recent years and that trend should continue.
Fortis
Fortis owns and operates electricity generation and natural gas distribution assets in Canada, the U.S., and the Caribbean.
The diversity provides investors with a balanced revenue stream coming from a broad geographic footprint.
Across the portfolio, the company derives 93% of its revenue from regulated assets. This is important for dividend investors because it ensures predictable and reliable cash flow, and is a big reason why Fortis is one of Canada’s dividend champions. The company has increased the payout every year for more than four decades, and investors should see more gains in the years to come.
Fortis pays a dividend of $1.36 per share that yields 3.8%.
