With strong dividend yields, these three companies are a solid way to start a diversified income portfolio.
Perform the necessary research and consider launching your dividend portfolio with three solid Canadian companies.
Here’s a short rundown on what these companies offer income investors.
1. Enerplus Corp
Enerplus Corp (TSX: ERF)(NYSE: ERF) is an energy producer that has a range of high-quality, low-decline oil and gas assets. In Q2 2014, Enerplus attained record production of 104,000 BOE per day and increased production in each of its four core areas (U.S. oil, Williston Basin; U.S. natural gas, Marcellus; Canadian oil, Waterfloods; and Canadian natural gas, Deep Basin).
These four areas provide Enerplus with stable production and generate good cash flow. The company works to preserve a balance between oil and natural gas production. Therefore, it is not bound to only one commodity.
The Bakken/Three Forks resource play in North Dakota offers high-growth opportunities for Enerplus. Its crude oil properties are in the Fort Berthold region of North Dakota and in the Elm Coulee field in Richland County, Montana. Enerplus has an average 90% working interest in these properties and the majority of this year’s capital spending program has been allocated to Fort Berthold. Q2 2014 production at Fort Berthold was 20,800 BOE per day.
Enerplus pays dividends from the cash flow generated from the sale of its oil and natural gas production. The company’s current dividend yield is 4.52%.
2. Potash Corp./Saskatchewan
The world’s largest crop nutrient company, Potash Corp./Saskatchewan (TSX: POT)(NYSE: POT) produces three essential nutrients for farmers: potash, nitrogen, and phosphate. For Q2 2014, its earnings exceeded the top end of its Q2 guidance range due to potash and nitrogen strength.
Potash Corp is a cash flow generator. Q2 cash from operating activities for the company was $788 million and $1.3 billion for first six months of 2014.
The strength of Potash Corp is that the world needs increased food production. Farmers need to get greater yields from the same acreage. The three essential nutrients the company produces have it positioned to capitalize on this need. It has more potash than any other company and 20% of worldwide capacity at its Canadian operations.
Potash Corp’s current dividend yield is 3.91%.
3. Rogers Communications Inc.
A communications and media company, Rogers Communications Inc. (TSX: RCI.B)(NYSE: RCI) operates through its Rogers Wireless, Rogers Cable, Rogers Business Solutions, and Rogers Media units. Rogers is the largest wireless carrier in Canada. The company has top broadcast radio and television, specialty TV, sports entertainment, publishing, and digital media assets.
Rogers is also a cash flow generator. Most of its revenue and cash flow comes from wireless and broadband services. In 2013, the company generated $2 billion of pre-tax free cash flow. For Q2 2014, the company produced $436 million of consolidated quarterly free cash flow. In addition, cash provided by operating activities was $1.2 billion.
Rogers is building up its networks to drive growth. It announced $450 million of planned capital spending over the next three years to expand its wireless network in over 70 communities across British Columbia. Upon completion of this particular capex program, the company will have invested $2 billion in its British Columbia network.
Rogers’ current dividend yield is 4.12%.
