Here we are again. The markets have turned red and investors are flocking for the exits. In such periods of panic, growth stocks tend to get hammered while stable, reliable dividend payers outperfom. With that in mind, here are three safe income investments for investors to protect themselves against a market crash. All three are Canadian Dividend Aristocrats, having raised dividends for five or more consecutive years.
Exchange Income Corp (TSX:EIF)
Exchange Income Corp is a diversified acquisition company. It is focused on opportunities in aerospace and aviation services and equipment, and manufacturing. Over the past 10 years, the company has made 11 acquisitions. Thanks to its disciplined approach to capital allocations, the company has produced a dependable and growing dividend.
The company has a seven-year dividend-growth streak and currently yields 7%. Over the past five years it has grown dividends by an average of 5% annually. The company has a diversified portfolio of properties, which makes it well positioned to weather an economic cycle.
Enbridge has been under significant pressure over the past number of years thanks in large part to its high debt load. Lost amid the negativity is that the company has made significant strides in deleveraging. Recently, it also announced a restructuring that will simplify operations. This will provide much-needed efficiencies which in turn will improve operational cash flows.
Thanks to its share price weakness, Enbridge is now yielding near a record-high 6.15%. If you are worried about the dividend’s safety, don’t be. It has a conservative payout ratio below 65% of adjusted cash flow from operations (ACFFO). Enbridge has also guided to 10% annual dividend growth through 2020. Don’t miss out on this rare opportunity to pick up a high-quality company with such a high and sustainable yield.
Next up on the list is Canada’s oldest and largest telecom. BCE has a 10-year dividend-growth streak and is also yielding near record highs. At 5.83%, its dividend yield is the highest it’s been since early 2010. The company has grown its dividend by a compound annual growth rate of approximately 5% over the past five years. This is consistent with the company’s guidance over the next few years.
Although the company’s growth is slowing, it is a cash machine. In 2017, the company generated $7.3 billion in cash from operations. As a member of the Big Three wireless monopoly, it can also be counted on to produce stable and consistent growth. At its current yield, investors can sleep well at night as they collect significant and growing income.
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Fool contributor Mat Litalien has no position in any of the companies listed. Enbridge is a recommendation of Stock Advisor Canada.