These three stocks are some of my favourite income ideas for the year and they pay dividend yields of 8.7%… 9.1%… even 10.1%.
That’s a good thing too, because it’s an income desert out there. Bond yields barely keep up with inflation. Your typical blue-chip stock pays out less than 3%.
However, there’re still companies that offer reliable, high-single-digit yields if you know where to look. I turned over a lot of stones to prepare this list. Here are my top three income plays for 2015.
1. Freehold Royalties Ltd.
Most energy investments you find are actually pretty complex. They are companies that own land and pipelines. They have to deal with spills, lawsuits, and cleanups. That’s a lot to handle and still crank out a profit.
However, this business couldn’t be any simpler. Freehold Royalties Ltd. (TSX: FRU) is set up to finance oil-producing wells, collect royalties from their production, and distribute the profits to shareholders. This gives you a stake in thousands of oil wells throughout the country without having to own an acre of land.
Because the firm is not responsible for paying any ongoing drilling costs, Freehold is gushing cash. Today, it pays a monthly distribution of 14¢ per share. That comes out to an annualized yield of 8.7%.
2. Crescent Point Energy Corp.
Crescent Point Energy Corp. (TSX: CPG)(NYSE: CPG) is a great success story. A decade ago, the company was an obscure startup. But through a series of smart acquisitions, the firm is now one of the largest players in the oil patch.
However, there’s good reason to believe Crescent Point’s best days are still ahead. The company made a huge oil discovery earlier this year. New shale drilling techniques could also provide a big boost to reserves.
While investors wait for this growth story to play out, they’re being well compensated. Today, Crescent Point pays a monthly dividend of 23¢ per share, which comes out to an annualized yield of 10.1%.
3. Dream Office REIT
It’s no secret that owning real estate is a great way to earn extra income. But for most of us, becoming a landlord is kind of a hassle. That’s why you might be interested to learn about a way to collect monthly rental income without buying a single property yourself.
I’m talking about becoming a partner with an established, highly-successful landlord: Dream Office REIT (TSX: D.UN). Simply put, Dream is a real estate management company. The trust owns properties, collects rent from tenants, and passes on the income to investors.
That has translated into steady income for unitholders. Since it started making payments in 2003, Dream has never missed a distribution. Today, the firm pays investors a tidy yield of 9.1%.
