Are you looking for some high-quality dividend stocks that are on sale today?
If so, let’s take a look at two stocks that you can add to your RRSP portfolio for the dividends, but also for the potential capital appreciation.
Both of these stocks have hit bumps in the road, but with patience and resolution, investors can benefit greatly from these hiccups.
Altagas Ltd. (TSX:ALA)
The stock that has been hit this year along with the rest of the market and utilities stocks, but much more so. It has dropped a whopping 21% in the last year in what can only be called an unwarranted move.
But with a dividend yield of over 9%, this stock has been paying investors to wait for resolution of the issues that have been surrounding its WGL acquisition.
One of the issues was recently partially resolved, as the company announced the approval of the WGL acquisition by the Maryland Public Service division, and the stock is rallying in response. The District of Columbia approval is still expected by mid-2018.
With regard to financing, which has been the other sticking point causing uncertainty and weakness, management is in discussions with many parties regarding the sale of different assets, including the potential sale of its minority interest in Northwest B.C. Hydro facilities.
WGL’s high-quality assets and market position will bring Altagas many growth opportunities as well as significant earnings and cash flow accretion.
And at the end of the day, the company is seeing strong operational momentum, as evidenced by fourth-quarter results that showed normalized cash flow from operations that was 4% higher than the same period last year, with a very healthy payout ratio of well under 60% and good liquidity.
We can expect a good year ahead.
Enbridge Inc. (TSX:ENB)(NYSE:ENB) has fallen 28% in the last year, after a difficult 2017 that was mired in uncertainty.
This has created a very attractive entry point for investors and a stock that is currently yielding 6.68%.
The concerns have been twofold: How will the company maintain its dividend plus provide funding for future capital expenditures and projects?
With management reiterating its commitment to its $3 billion asset-sale program by mid-2018 as well as a mixture of issuing equity and other hybrid securities for the other half of the funding needs, the market eagerly awaits the announcement of the completion of the asset sales.
Investors can feel reassured though, as the company has reaffirmed its 2018 guidance, calling for a 21% increase in EBITDA to $12.5 million and 10% annual dividend growth to 2020.
