As income investors, we’re always on the lookout for high-quality stocks that can boost our portfolios’ returns, so let’s take a quick look at three with high and safe yields of 6-10%.
Chemtrade Logistics Income Fund
Chemtrade Logistics Income Fund (TSX: CHE.UN) is one of the leading providers of industrial chemicals and related services to customers in North America and around the world. Its product offerings include sulfuric acid, sodium chlorate, sodium nitrate, sodium hydrosulfite, and phosphorus pentasulfide.
Chemtrade pays a monthly distribution of $0.10 per unit, equal to $1.20 per unit annually, and this gives it a yield of about 6.2% at the time of this writing.
Foolish investors should make the following two notes about Chemtrade’s distribution.
First, the company has maintained its monthly distribution of $0.10 per unit since January 2007, which makes it a very reliable income provider.
Second, I think Chemtrade’s very strong generation of distributable cash after maintenance capital expenditures from continuing operations, including its 3.1% year-over-year increase to $1.32 per unit in the first nine months of 2017, and its sound payout ratio, including 68.2% of its distributable cash in the first nine months of 2017, will allow it to continue to maintain its current monthly distribution rate for the foreseeable future.
Corus Entertainment Inc.
Corus Entertainment Inc. (TSX: CJR.B) is one of the world’s largest media and content companies. It owns and operates 45 specialty television channels, 15 conventional television stations, 39 radio stations, and a “world-class” content business, as well as digital assets and publishing companies.
Corus pays a monthly dividend of $0.095 per share, equating to $1.14 per share on an annualized basis, which gives it a 10% yield at the time of this writing.
Investors should make the following two notes about Corus’s dividend.
First, the media giant has raised its annual dividend payment 13 times in the last 14 years, and it has maintained its current monthly rate since February 2015.
Second, I think the company’s very strong growth of free cash flow (FCF), including its 55.5% year-over-year increase to $292.66 million in fiscal 2017, and its greatly improved dividend-payout ratio, including 48.2% of its FCF in fiscal 2017 compared with 58.2% in fiscal 2016, will allow it to maintain its current dividend rate for many years to come or allow it to announce a hike whenever its management team so chooses.
Altagas Ltd.
Altagas Ltd. (TSX: ALA) is one of North America’s largest owners and operators of energy infrastructure. Its portfolio of assets includes natural gas pipelines, processing plants, and storage facilities, wind, hydro, biomass, and gas-fired power-generation facilities, and regulated utilities that deliver natural gas, which are located across Canada and the United States.
Altagas currently pays a monthly dividend of $0.1825 per share, equal to $2.19 per share annually, which gives it a 7.55% yield at the time of this writing.
Foolish investors should make the following two notes about Altagas’s dividend.
First, it has raised its annual dividend payment for seven straight years, and its 4.3% hike last month has it on track for 2018 to mark the eighth consecutive year with an increase.
Second, the energy infrastructure company has an annual dividend-growth target of 8-10% through 2021, and I think its very strong financial performance and its growing asset base will allow it to extend this target into the late 2020s or early 2030s.
