Marijuana stocks are on fire — again.
Driven by the news that beverage gorilla Coca-Cola is interested in teaming up with Aurora Cannabis to develop a CBD-infused drink, all major weed plays jumped last week, with the likes of Cronos Group and Hexo even busting through to new 52-week highs.
But speculative pot stocks aren’t the only ones doing well. For more conservative investors, here are three dividend-paying stocks that also hit new highs last week.
While they don’t have the “quick-double” appeal of weed stocks, their lower-risk nature gives them a better chance at sustained momentum.
Remember, Fools: buying into well-managed dividend stocks is the most reliable way to wealth.
Our first stock is none other than Toronto-Dominion Bank (TSX:TD)(NYSE:TD), whose shares hit a high of $80.05 on Friday. Over the past year, the banking giant is up 15% versus just 5% for the S&P/TSX Composite Index.
TD is benefiting from strong retail operations both in Canada and the U.S. In Q2, TD posted adjusted EPS of $1.66 (or $3.1 billion), up nicely from $1.51 (or $2.9 billion) in the year-ago period.
Growth down south was especially strong, as U.S. retail revenue increased from $900 million in Q2 2017 to $1.1 billion. Strong loan and deposit volume, higher margins, and U.S. tax reform help all helped boost business.
With the stock boasting a still-attractive yield of 3.4%, there should be plenty of room for income investors to jump in.
Gibson Energy Inc. (TSX:GEI) is our next dividend momentum stock, hitting a new 52-week high of $20.75 on Friday. Over the past six months, the midstream energy company has risen a solid 22% versus just 0.6% for the S&P/TSX High Income Energy Index.
Last year, Gibson embarked on a major restructuring process, and its initiatives are clearly taking hold. In Q2, the company generated distributable cash flow of $78 million, up 80% from the year-ago period.
Moreover, Gibson closed the sale of several U.S. energy services businesses for gross proceeds of $126 million — with continued progress on the sale of its remaining non-core assets.
On the dividend front, the company also managed to decrease its payout ratio range to 70%-80%. So, with Gibson shares sporting a fat yield of 6.9%, the risk/reward trade-off certainly remains enticing.
With its stock hitting a new 52-week high of $108.92 on Friday, Bank of Montreal (TSX:BMO)(NYSE:BMO) rounds out our list of hot dividend plays. Over the past year, BMO has gained 17%, while the S&P/TSX Capped Financials Index is up 7%.
Like its banking gorilla brethren TD, BMO is profiting from strength on both sides of the border. In Q2, adjusted EPS came in at $2.36, well above the consensus estimate of $2.26 and $2.03 in the year-ago period.
In the U.S., BMO’s adjusted profit spiked 34% to $376 million, while its core Canadian banking segment posted earnings growth of 5%.
Given the strong interest rate and economic tailwinds still working in BMO’s favor, income investors might want to keep riding the wave.
Even after the recent run-up, BMO still offers a rather healthy yield of 3.6%.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Brian Pacampara owns no position in any of the companies mentioned.