Income remains of utmost important for investors, and heading into 2018, it is a good time to re-evaluate our portfolios to ensure that we own the top, most attractively valued, and high-growth, dividend-paying stocks.
This is not an easy task though, as the market becomes increasingly expensive, and it is getting more difficult to find those dividend-paying stocks that represent good value and strong growth.
Here are two such stocks that investors should own heading into 2018.
Currently yielding 3.9%, Brookfield has a history of strong cash flow and dividend growth.
Since 2009, Brookfield has grown its funds from operations by a compound annual growth rate (CAGR) of 24%, and it’s per-unit distribution by a CAGR of 12%.
And the company’s dividend payments are safe and reliable, as the company’s assets are long-life assets that provide essential services. Its assets include regulated utilities terminals, energy transmission and distribution, railroads, toll roads, as well as newer, faster-growing industries, such as communications infrastructure and water infrastructure.
These assets bring predictable cash flows and have long-term contracts.
In terms of future growth opportunities, the list is long and exciting. From different geographies to different industries, growth is coming from many new sources. Aging public infrastructure, economic growth in Asia, water scarcity, and unprecedented data usage are big drivers.
Altagas Ltd. (TSX:ALA)
Altagas shares currently present as a good opportunity for investors that can see beyond the immediate uncertainty.
Currently yielding 7.54%, the shares have declined 30% in three years, and 17% since the beginning of this year. So, new investors can get into this stock at really attractive levels.
The company’s most recent results were better than expected, generating cash flow per share of $0.69, and the company increased its dividend by 4.3%, as we are still awaiting the asset dispositions that will help fund the WGL acquisition.
This followed better than expected second-quarter results and reaffirms the company’s strong operational and financial momentum.
The $8.4 billion WGL acquisition, which will add additional high-quality assets and give the company a significant footprint in the U.S. and Canada, has left investors with many questions. The approval process is slow and uncertain, the closing date is uncertain, although management expects that final approvals will come in during the first half of 2018, and the implementation of financing is also uncertain.
At the end of the day, however, the deal is accretive to earnings and cash flow, and brings with it a plethora of growth opportunities. The company has identified $5 billion in immediate growth opportunities plus an additional $2 billion in opportunities through to 2021.
This is an opportunity of a lifetime to purchase this quality stock, which is also a high-yielding one.
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Fool contributor Karen Thomas does not own shares in any of the companies listed in this article. Altagas and Brookfield Infrastructure Partners L.P. are recommendations of Stock Advisor Canada.