3 Big Dividends You Can Actually Count on

Avoid being burned by a dividend cut with these three companies.

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It’s quite a shame how many companies in Canada lure new investors with a big dividend payout only to cut it later on. For example, just in the last year, companies like Just Energy, TransAlta, and Sherritt International have all slashed their dividends.

Fortunately, you can avoid these kinds of situations. By choosing strong companies with sustainable earnings, a healthy balance sheet, and an affordable dividend, you don’t have to worry about a cut. Below are three such companies.

1. Rogers

If you’re looking to build a diversified portfolio of solid, dividend-paying Canadian stocks, there’s a strong argument for buying all three of Canada’s big telecommunications providers. They all make recurring revenue, face limited competition, and enjoy high barriers to entry. As a result, they generate steady earnings, most of which gets paid out to shareholders.

The cheapest of the big three is Rogers Communications (TSX: RCI.B)(NYSE: RCI), at 13.4 times earnings. Rogers’ shares have certainly lagged over the past year, mainly due to some sluggish quarters, up only 3% over this time. Because of this cheap share price, the shares yield over 4.2% — not bad for a company with such steady and predictable earnings.

2. Canadian Oil Sands

Many of Canada’s highest-yielding companies can be found in the energy patch, yet many of them pay unsustainable dividends, so you have to be careful.

However, one company in particular pays a very attractive dividend that it can actually afford: Canadian Oil Sands (TSX: COS). The largest owner, as well as the operator, of the Syncrude project yields nearly 6%, based on an annual payout of $1.40 per share. Last year it earned $1.72 per share.

The company has a high dividend yield, mainly because of a lagging stock price, which still trades below its price five years ago. The main reason for the depressed price has been continued operational issues at Syncrude. There is also little prospect for growth. If you’re just looking for a solid, high-yielding dividend stock, this is likely your best option among Canada’s energy producers.

3. Thomson Reuters

Information services provider Thomson Reuters (TSX: TRI)(NYSE: TRI) has also had its fair share of issues over the past five years, and as a result has slowly been losing market share to Bloomberg. Like Rogers, though, Thomson makes its money based off of subscription products, resulting in predictable earnings, perfect for a nice dividend payout — the current yield is approximately 3.6%.

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.

Fool contributor Benjamin Sinclair holds no positions in any of the stocks mentioned in this article.

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