Boring is good when it comes to investing in essential products and services that consumers and businesses need every day. The following three companies don’t get much hype in the news like “flavour of the month” stocks. Nevertheless, each will drive income for your portfolio.
1. Agrium Inc.
Agrium Inc.‘s (TSX: AGU) (NYSE: AGU) business may not seem exciting, but it is essential to global food production. The company produces and markets three main groups of crop nutrients: nitrogen, phosphate, and potash. It also produces and markets controlled-release fertilizers and micronutrients.
Agrium’s wholesale segment produces, markets, and distributes nitrogen, phosphate, and potash for agricultural and industrial customers worldwide. Its retail strategic segment is the largest direct-to-grower distributor of seed, agricultural crop protection products, and crop nutrients.
For Q2 2014, Agrium had record results for retail with its EBITDA up 28% year over year. The company’s North American retail division has more than 1,100 retail locations. In October 2013, Agrium completed the acquisition of Viterra Inc.’s Canadian retail assets. It acquired approximately 210 retail stores across Western Canada, plus 13 Viterra retail locations in Australia.
Agrium’s current dividend yield is 3.22% and the company’s dividend rate is $3.00.
2. Fortis Inc.
What could be more boring than an electricity and natural gas distribution utility in the utilities sector? Then again, what could be more needed by industry and consumers? Fortis Inc. (TSX: FTS) is the largest investor-owned electric and gas distribution utility in Canada. Its regulated utilities account for approximately 93% of total assets, which hit close to $25 billion.
Recently, Fortis completed the transaction to acquire all of the outstanding shares of UNS Energy Corporation. UNS Energy is a vertically integrated utility services holding company. UNS engages, via three subsidiaries, in the regulated electric generation and energy delivery business, mainly in Arizona. UNS Energy’s fiscal 2013 operating revenues were roughly US$1.5 billion. As of June 30, 2014, UNS Energy had total assets of around US$4.5 billion so this is a nice acquisition for Fortis and its investors.
Fortis’ current dividend yield is 3.73% and the company’s dividend rate is $1.28.
3. Teck Resources Ltd.
Teck Resources Ltd. (TSX: TCK-B)(NYSE: TCK) produces the essential materials of copper, steelmaking coal, zinc, as well as energy. Not exactly garnering the excitement of something like Apple’s new iPhone, but totally vital to the everyday activities businesses and consumers engage in. Teck also produces molybdenum and specialty metals.
The company is the second-largest seaborne exporter of steelmaking coal and a top 10 copper producer in the Americas. It has six coal operations in British Columbia and Alberta and roughly 36 years of reserves. Moreover, Teck is the third-largest producer of zinc concentrate. It is also working to develop its extensive oil sands resource base into multigeneration oil production.
Fort Hills — the company’s first oil sands project — has considerable initial production of 36,000 bpd and Teck is working with Suncor on this project. Teck indicates that Fort Hills has cash flow potential of approximately $2 billion-$3 billion annually. Teck’s share of production could eventually be 200,000-250,000 bpd.
Teck Resources has a current dividend yield of 3.90% and the company’s dividend rate is $0.90.
Consider these boring but steady and reliable blue-chip performers that will generate cash for your portfolio for years to come.
