With so many fantastic options available to investors, there are always certain companies that are priced at more attractive valuations than others. Currently, high-quality names and bargain prices are getting harder to find, as the market has gone through a successful bull run. With a few bargains still available, here are some of the highest-quality names that investors can dive into with cash they have available.
The first name on the list is none other than Canadian Imperial Bank of Commerce (TSX: CM)(NYSE: CM), called CIBC for short, which currently trades at $122.50 and offers investors a dividend yield of no less than 4.25%, as revenues and bottom-line earnings continue to increase in line with frothier markets. Investors expecting a dividend increase or share-buyback undertaking with this name are definitely not wrong to have these expectations.
As the most “hands on” Canadian bank when it comes to capital allocation, CIBC still has a long way to go before the bulls stop running.
Next on the list is Enbridge Inc. (TSX: ENB)(NYSE: ENB), which offers an even more attractive dividend yield of 5.5% and a relatively low payout ratio of no more than 60% of earnings (throughout the first three quarters of the current fiscal year). For the previous year, the payout ratio was 62.5% of earnings. This investment is attractive because the higher rates have led to a sideways movement of the share price, which translates to investors being closer to a dividend increase with every passing day. Time is the friend of the great company.
The last name on the list is General Electric Company (NYSE: GE). After reporting earnings, General Electric seems to have settled in the US$16 range, which translates to a dividend yield just shy of 3%. At a price of US$16, the yield rises to 3%, which may be acting as a support for the share price. Although the short- to medium-term success of the company remains murkier than most would prefer, the truth is that this name has successfully reinvented itself many times over.
To make this stock more attractive to Canadian investors, it is worth noting that the U.S. dollar has been struggling of late, which means investors need fewer Canadian dollars to purchase each share. Although investors see currency as a headwind in many cases, currency can also be an advantage if approached the right way over a long period of time. As challenging as it may be to pick winning securities, currency has traditionally been much harder, as investors need to consider the movement of two separate currencies independently and then in relation to one another.
