The recent pullback in the broader market is finally giving investors an opportunity to buy top Canadian income stocks at reasonable prices.
This is great news for retirees and other income investors who are constantly searching for reliable distributions that provide above-average yield. Let’s take a look at three companies that might be interesting picks right now.
RioCan Real Estate Investment Trust (TSX:REI.UN)
RioCan is Canada’s largest REIT with retail properties spread out across the country. Shopping centres might not appear to be attractive investments right now with all the news of major department stores going bust. RioCan has certainly had a few long-term tenants leave in recent years. However, overall demand remains strong for RioCan’s properties, and the diverse client list means no tenant contributes more than 5% of total revenue.
RioCan is adjusting its business model to ensure the firm thrives in the coming decades. The company is monetizing roughly $2 billion of properties located in secondary markets and using the proceeds to reduce debt and fund the development of its new mixed-use projects in six major markets. RioCan plans to build up to 10,000 residential units at its top locations over the course of the next decade.
The first projects are already nearing completion and investors should start to see a positive impact on cash flow.
RioCan pays its distribution monthly. At the time of writing, investors can pick up a yield of 6%.
Algonquin Power and Utilities (TSX:AQN)(NYSE:AQN)
Algonquin Power owns natural gas distribution and renewable energy assets primarily located in the United States. The company has grown over the years through an aggressive acquisition strategy, and investors should see the trend continue as the North American market consolidates.
The stock is a great way for investors to gain exposure to U.S.-based revenue streams through a Canadian company. Algonquin raised its dividend by 10% earlier this year and currently offers a 5% yield.
BCE remains a dominant player in the Canadian communications market with world-class wireline and wireless networks. The company bought Manitoba Telecom Services and AlarmForce in the past two years in an ongoing push to expand its presence across the country and build the portfolio of products and services it provides to its customers.
The stock has come down from $62 late last year to $52 per share amid concerns that rising interest rates could tempt investors to dump go-to dividend stocks in favour of GICs. Some rotation should be expected, but the pullback appears overdone. BCE continues to grow and the dividend should be rock solid. Investors who buy the stock today can pick up a yield of 5.8%.
The bottom line
RioCan, Algonquin Power, and BCE all pay reliable distributions that offer above-average yield and should be attractive picks today for a buy-and-hold income portfolio.
