Some of Canada’s top dividend stocks have sold off to the point where long-term investors are finally getting a chance to buy great names at reasonable prices.
Here’s why I think investors should consider adding BCE Inc. (TSX:BCE)(NYSE:BCE), Bank of Nova Scotia (TSX:BNS)(NYSE:BNS), TransCanada Corporation (TSX:TRP)(NYSE:TRP), and Potash Corp./Saskatchewan Inc. (TSX:POT)(NYSE:POT) to their portfolios.
BCE
The country’s media and communications giant is well positioned to ride out a slowdown in the Canadian economy.
BCE has amassed an impressive portfolio of assets all along the communications value chain. The company owns retail outlets, a television network, sports teams, specialty TV channels, radio stations, and a very attractive portfolio of web-based properties.
All of the content is delivered to customers across BCE’s state-of-the-art wireline and wireless networks.
In tough times people might cut back on their expensive coffees, but they can’t afford get rid of their mobile phones or Internet service.
BCE pays a dividend of $2.60 per share that yields about $4.9%.
Bank of Nova Scotia
Canada’s most international bank has a diverse revenue stream that provides a good hedge against weakness in the Canadian economy.
The company has invested heavily in Latin America and long-term investors should see strong revenue growth coming out of the international operations in the coming years.
Bank of Nova Scotia trades at an attractive 10.4 times forward earnings. The $2.72 per share dividend yields 4.3%.
TransCanada Corporation
TransCanada gets a lot of attention for its ongoing battles to get its Keystone and Energy East pipelines built.
These projects are important, but the company also has a large portfolio of smaller pipelines that are moving along nicely. In fact, the company will put about $12 billion in new pipelines into service in the next three years.
As the assets begin to generate revenue, TransCanada will pass on some of the profits as higher dividends.
TransCanada pays a dividend of $2.08 per share that yields 4.2%.
Potash Corp./Saskatchewan Inc.
Potash Corp. produces one of the key crop nutrient ingredients used by farmers to increase food production.
As the global population expands from the current level of seven billion to an expected peak of 11 billion in 2050, farmers are going to need a lot of help to meet the accompanying food demand.
Potash Corp. is wrapping up a multi-billion dollar expansion program. As the new assets shift from development to production, Potash will have significantly more free cash available to increase dividends and buy back shares.
Potash Corp. pays a dividend of US$1.52 per share that yields 5.3%.
