To keep reading, enter your email address or login below.
With interest rates finally heading higher after close to a decade at historically low levels, many Canadian have gotten very comfortable with the idea of holding a greater number of low-risk equity investments to obtain yield. In spite of rising rates, the reality is that it will still take a long time for these higher rates to flow into the bond market, which would only then give investors a reason to leave equities behind.
With a clear need for dividend-paying stocks, we need not look any further than the following three companies that, together, offer diversification.
The first name on the list is the very well known Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG). After increasing by close to 10% over the past month, Crescent Point continues to offer a dividend yield of more than 3.5%, as the price of oil continues to show strength. In spite of substantially lower oil prices over the past three years, investors looking for yield should have no problems diving into shares of this oil-production company. To make this investment even more attractive, the share price has the opportunity to rocket higher should the bulls return to the oil sector.
When considering the dividend on its own merit, over the past three quarters the company has paid only 11.7% of cash flows from operations. In the previous fiscal year, the amount was only 17%.
In an effort to diversify, the not so well-known First National Financial Corp. (TSX:FN), currently priced at $28.50 per share, offers investors no less than a 6.5% yield and has nothing to do with oil. As a lender, the company is in a prime position to benefit from rising rates, while not having to expand its existing loan portfolio. Essentially, all variable rate loans will become more profitable as interest rates begin to rise.
In regards to the dividend, the company has paid out approximately half of net profits throughout the first three quarters of the 2017 fiscal year. For 2016, the amount was almost the same with the remaining money being retained inside the company. As the company has the capacity to either increase the dividend or undertake a share buyback, patient investors have a lot to gain from this investment over the long term.
The final name on this diversified list is none other than Dream Office Real Estate Investment Trst (TSX:D.UN), which, at a current price of $22.20 per share, pays investors a very sustainable dividend yield of 4.5%. Although the company has been forced to cut the dividend repeatedly over the past few years, the current situation for investors could not be better. After selling off a substantial number of assets and retiring a large number of shares, the smaller footprint of the company is expected to act as a driver for shareholders moving forward.
With many fantastic opportunities to find monthly dividend-paying companies, investors don’t need to look very far to find high-quality names offering a lot more than just the yield!
Overwhelmed by how many public companies there are to choose from in Canada? Motley Fool Canada Director of Research Iain Butler has you covered. Once a month, Iain and the rest of our team at Stock Advisor Canada reveal their five favourite Canadian stocks for new money now.
Considering they’ve walloped a “stuck in the mud” TSX by 10% over the past 4 years with truly life-changing winners like Shopify (up 236%, more than tripling your money), you’ll probably want to have your front-row seat reserved when our next five “Best Buys Now” are released – exclusively on behalf of Stock Advisor Canada members.
To make sure your name is on the list, just click here now... before the curtain is lifted without you.
Fool contributor Ryan Goldsman owns shares of CRESCENT POINT ENERGY CORP.