Here’s why I think dividend investors looking for big yield should consider these three companies.
Canada’s largest telecommunications company offers investors a chance to profit from the rapid growth in mobile and fixed line data consumption.
BCE Inc. owns and operates extensive wireless and wireline networks used to deliver a wide variety of communications and media content to its Canadian residential and business customers.
It also has a growing media division that produces and distributes the content Canadians want to watch, read, or listen to. Whether it is via a smartphone, tablet, deskto,p or TV screen, BCE’s customers can access the content they want at any time.
BCE Inc. pays a dividend of $2.48 that yields about 5%. The company has increased the dividend 10 times in the past five years.
As the media division continues to grow and customers demand more streaming data services, BCE Inc. should see cash flow increase. In turn, I expect investors will be rewarded with annual increases in the dividend.
Canadian Oil Sands Limited
Investors looking for a pure play on light, sweet, crude oil should consider Canadian Oil Sands Ltd. as a top dividend pick.
The company has a 37% interest in the massive oil sands Syncrude project. Syncrude’s assets include surface mines, bitumen extraction plants, and a world-class upgrading facility that is used to process the bitumen into profitable crude oil.
In its Q2 2014 earnings statement, Canadian Oil Sands increased its estimated 2014 cash flow from operations by $150 million to $1.3 billion.
The company is near the completion of two major capital projects. The Mildred Lake Mine Train Replacement and Centrifuge Trailing Management projects should both be completed on time and on budget in 2014 and early 2015. This will free up significant free cash flow that can be returned to investors.
Canadian Oil Sands pays a dividend of $1.40 per share that yields about 6%.
The high dividend being paid to investors is adequately covered by the free cash flow. The company’s management is well regarded and is committed to maintaining a strong balance sheet.
Crescent Point Energy Corp.
Crescent Point Energy is a traditional oil and gas producer based in western Canada.
In its Q2 2014 earnings statement the company reported record production levels of more than 137,000 barrels per day. The company also increased its 2014 funds flow from operations guidance by $50 million from $2.45 billion to $2.5 billion.
CEO Scott Saxberg said, “With our 2014 cash flow estimated to be greater than six dollars per share and our payout ratio the lowest it’s been in company history, we’re well on track to delivering another excellent year to our shareholders.”
Management has done an excellent job of acquiring quality assets at reasonable prices and developing them efficiently. I expect the trend will continue.
The company pays a dividend of $2.76 that yields about 6.1%.
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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 Andrew Walker has no position in any stocks mentioned.