3 Top Dividend Stocks From Edward Jones

With a nice yield and little risk of a dividend cut, these names should be on your radar screen.

| More on:
The Motley Fool
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

In the past five years, no form of investing has gained popularity as much as dividend investing. With record-low interest rates, investors have been searching for yield wherever they can find it, and stocks have often been the best option. If a company generates steady cash flow and pays a steady, rising dividend, why invest in a lower-yielding bond?

Professional wealth managers have certainly caught on, with a more recent example being Edward Jones’s Canadian Strategy Report. In a recent issue, appropriately titled “The Case for Rising Income”, Edward Jones advocates for dividend-paying stocks. The report even shows that reinvested dividends account for over half of the TSX total return over the last 30 years.

The report also lists the company’s favourite dividend stocks, which includes both American and Canadian names. Of the Canadian companies, the three with the highest-yielding dividends are shown below.

Rogers Communications: 3.84% yield

Of all the dividend names shown, Rogers Communications (TSX: RCI.B)(NYSE: RCI) may be the most stable. The telecom giant operates in an industry with limited competition, high barriers to entry, and subscription-based revenue. This has allowed the company to steadily increase its dividend; for example, since 2009, Rogers has raised its annual dividend by over 10% per year.

Part of the reason for Rogers’ high yield is a low share price; the company’s shares have fallen by over 11% over the past year due to some mediocre quarterly results. This may have provided an opportunity for dividend investors with a long time horizon.

Potash Corporation of Saskatchewan: 3.56% yield

Like Rogers, Potash Corporation of Saskatchewan (TSX: POT)(NYSE: POT) has also seen its shares lag the index over the last year. And as a result, its dividend is now at a nice healthy yield. PotashCorp is also not as cyclical as the other miners; even if the steel market collapses, everyone still needs to eat.

The risk that PotashCorp faces is on the supply side, which is what has hurt the company in the past year. The most notable event of course was Uralkali’s decision to exit its marketing agreement with the Belarusians and pursue a volume-over-price strategy. Another risk to stockholders is price – PotashCorp shares have recovered quite nicely since August and now trade higher than they did before Uralkali’s decision. They may not be the bargain that they once were.

Cenovus Energy: 3.15% yield

Rounding out the list is yet another company whose share price has trailed its peers: Cenovus Energy (TSX:CVE)(NYSE:CVE). But the company has some of the best energy assets in all of Canada at Christina Lake and Foster Creek. Cenovus is a low-cost producer, which will make the company able to withstand oil price fluctuations better than its competitors.

It also means that as Cenovus reinvests its cash flow back into its operations, those investment dollars will go a long way towards growing production.

Foolish bottom line

With dividend investing alive and well, it is still important to invest in companies with sustainable business models – otherwise, the dividend could be cut before you know it. Edward Jones has come up with some great ideas, and these three are perfect examples.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Investing

Doctor talking to a patient in the corridor of a hospital.
Dividend Stocks

1 U.S. Stock to Buy That Could Make You a Millionaire

Even though tech stocks are usually the go-to growth picks in the US stock markets, there are quite a few…

Read more »

Increasing yield
Dividend Stocks

My 3 Favourite TSX Dividend Stocks Right Now

These dividend stocks have been a favourite for a while, but even more so now that they trade at such…

Read more »

funds, money, nest egg
Dividend Stocks

New Investors: The 2 Best Options To Earn Regular Passive Income!

You can earn high passive income with dividend stocks like the Toronto-Dominion Bank (TSX:TD)(NYSE:TD).

Read more »

Dividend Stocks

This Canadian 6%-Yielder’s On Sale, But Not for Long!

SmartCentres REIT (TSX:SRU.UN) is a wonderful high-yielding REIT that has a higher yield and lower valuation than most its peers.

Read more »

A cannabis plant grows.
Cannabis Stocks

Why I’m Considering Canopy Growth Stock For My RRSP

As the cannabis industry grows, adding Canopy Growth stock to my RRSP will give me access to massive upside.

Read more »


Monthly Passive Income: Is RioCan a Buy for the 4.75% Yield?

RioCan raised the monthly distribution this year after cutting the payout during the pandemic. Should investors seeking monthly passive income…

Read more »

warning or alert

ALERT: 3 Cheap Stocks That Have Sent Off a Buy Signal

Canadians on the hunt for cheap stocks should snatch up CAE Inc. (TSX:CAE)(NYSE:CAE) and others that are technically undervalued right…

Read more »

grow money, wealth build
Top TSX Stocks

3 Canadian Growth Stocks for Your TFSA

Given their healthy growth prospects, these three stocks would be a good addition to your TFSA.

Read more »