Dividend stocks are more in vogue these days than they have been in a long time as investors continue to pay up for quality in light of the most recent spell of rising volatility that has been affecting markets.
The three stocks highlighted below will all fit that bill nicely.
Each pay out to their respective shareholders dividends yield of at least 7% annually, with the highest yielding stock of the three paying out to its shareholders an annual distribution in excess of 12% as of this writing.
Shares in Chemtrade are yielding 12.59% annually as of this writing following a sharp sell-off in the company’s stock following what analysts viewed to be a lackluster first quarter earnings report.
CHE stock fell by more than 23% in the two days that followed its first quarter earnings release. While the shares have managed to recoup some of those losses since then, the company remains trading significantly below its all-time high share price just shy of $18 not more than two years ago.
The company is facing some short-term pricing pressures, but in my opinion, management should be able to resolve these issues in the medium to long-term.
In the meantime, investors are getting the benefit of the firm’s solid double-digit dividend distribution while waiting for the turnaround story to unfold.
Alaris Royalty Corp. (TSX:AD) meanwhile offers the quintessential “royalty play” for investors.
Essentially, Alaris goes out and buys non-control, preferred equity stakes in private companies that are seeking to recapitalize their business, be it for liquidity purposes, a management buyout opportunity, aiding in a generational ownership transfer or to fund promising growth opportunities.
In exchange for providing capital to these businesses, Alaris receives a preferred equity dividend distribution that is reset annually based on the performance of the underlying business.
Most of the earnings of Alaris private company investments are then passed on to its shareholders, with Alaris shareholders typically receiving an annual dividend payout close to 100% of the firm’s total net earnings.
Alaris shares currently yield 8.20% with the company’s stock price already having gained more than 20% so far in 2019.
Moving on to the third company to make this list, at this point it would be very difficult to argue against the long-term merits of sustainable and renewable energy sources.
Increasingly in recent years, it would seem that critics have been switching sides with respect to the merits (and dangers) of global warming and climate change.
At this point it would seem that the transition from a fossil-fuel driven energy economy to a renewable, green, or clean one is much more a matter of when, rather than if.
There are several very interesting investment ideas within in the Canadian market for investors looking to participate in the green revolution, including TransAlta Renewables Inc (TSX:RNW).
The RNW shares are currently yielding 7.39% annually, and while it has yet to increase its payout dating back to the August 2017 distribution, it isn’t difficult to envision a bright future for the company and its shareholders.
When you buy heavily cyclical stocks at low prices… and then hold the shares until the cycle reaches its peak… you can make a very healthy profit.
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Fool contributor Jason Phillips has no position in any of the stocks mentioned. Alaris Royalty Corp. is a recommendation of Stock Advisor Canada.