MENU

First Brexit… then Trump… Now, it’s time for Pro

Is your portfolio really prepared for what’s coming next?

To help investors like you navigate this historically uncertain — yet high-flying — market and prepare for an inevitable downturn, we’re re-opening our Motley Fool Pro Canada service to a select few new members for a short time.

To discover how Pro Canada could help you to increase your upside potential… reduce your downside risk… and earn paycheque-like income in the process, simply click here — before the small number of spots we have left are all gone!

2 Attractive Dividends Stocks for Income Investors

Many investors rely on dividends stocks to provide extra income.

Here are the reasons why I think Fortis Inc. (TSX:FTS) and Inter Pipeline Ltd. (TSX:IPL) are solid picks right now.

Fortis

Fortis is a natural gas distribution and electricity-generation company based out of eastern Canada with assets located across the country as well as in the Caribbean and the United States.

The company has historically grown through a mix of acquisitions and organic developments. Two years ago Fortis spent US$4.5 billion to purchase Arizona-based UNS Energy. Last year the company completed an expansion at its hydroelectric facility in British Columbia.

These two assets helped drive 2015 earnings to a record $589 million, or $2.11 per share.

Integrating new companies can be a challenge, but Fortis appears to have a knack for pulling of big acquisitions, and the latest deal is a whopper.

Fortis is spending US$11.3 billion to acquire ITC Holdings Corp., the largest independent pure-play transmission company in the United States. The stock initially pulled back on the announcement, but investors are feeling more comfortable with the deal and the shares have recovered.

Fortis gets nearly all of its revenue from regulated assets. That means cash flow should be predictable and reliable, which tends to be a good thing for dividend fans. In fact, the company has increased the distribution every year for more than four decades and plans to hike the payout by 6% per year through 2020.

Inter Pipeline

Inter Pipeline took a hit last year as investors bailed out of any name connected to the energy sector. In the case of Inter Pipeline, the sell-off was way overdone, and bargain hunters have recently piled back into the stock.

Inter Pipeline transports 15% of western Canada’s conventional oil output and 35% of oil sands production. The company also has a growing liquids storage business in Europe.

The conventional oil group is holding up well as strength in the Viking play offsets weakness in other areas. On the oil sands side, throughput remains strong despite the downturn in the sector. Inter Pipeline completed two major oil sands infrastructure projects in early 2015, and those assets helped drive overall Q4 funds from operations up 32% from the previous year.

Growth is occurring in the European operations through new acquisitions and improved storage demand. Utilization rates hit 97% in Q4, and that helped push funds from operations in the division up 79% year over year.

The company recently increased the monthly dividend by more than 6% to 13 cents per share. That’s good for a 6% yield if you buy the stock today.

The shares have already bounced 30% off the January low, but more upside is still possible on a broader recovery in oil prices. Until that happens, investors collect a solid payout while they wait for better days in the energy sector.

Just released! One top stock for 2016 and beyond

Exports of liquefied natural gas could be one of the best growth opportunities out there for long-term investors. And, we think we've identified the Canadian company to invest in. It's a global company with operations across nearly 20 countries and 70 locations. We like it so much, we've named it as 1 Top Stock for 2016 and Beyond. To find out why, click here now to learn how to access your FREE copy today!

Fool contributor Andrew Walker has no position in any stocks mentioned.

NEW! This Stock Could Be Like Buying Amazon In 1997

For only the 5th time in over 14 years, Motley Fool co-founder David Gardner just issued a Buy Recommendation on this recent Canadian IPO.

Stock Advisor Canada’s Chief Investment Adviser, Iain Butler, also recommended this company back in March – and it’s already up a whopping 57%!

Enter your email address below to claim your copy of this brand new report, “Breakthrough IPO Receives Rare Endorsement.”

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.