The Motley Fool

Income Investors: 3 High-Yield Stocks With Growing Distributions

Growing plant shoots on coins
Image source: Getty Images

Retirees and other income investors are searching for ways to boost the returns they get on their savings.

Let’s take a look at three stocks that might be interesting picks today for an income portfolio.


RioCan is Canada’s largest owner and operator of shopping malls. This might not sound like an appealing business today with all the news of retail closures, especially in the department store segment. It is true that some players are losing the battle to online competition, but demand remains strong for RioCan’s space and the tenant base is diversified enough that no single client represents more than 5% of revenue.

RioCan realizes the industry is changing and has embarked on a strategic shift that should drive solid revenue growth in the coming years. Management is in the process of selling $2 billion in non-core assets in secondary markets and is using the proceeds to strengthen the balance sheet and fund development projects in six core markets.

Part of the growth is coming from mixed-used developments that have retail and residential components. The first five major projects that are already complete or near completion are expected to generate average development yield of 5.7%.

RioCan raised the payout last year and now offers a monthly distribution of $0.12 per unit. That’s good for a yield of 5.7%.

Enbridge (TSX:ENB)(NYSE:ENB)

Enbridge is a giant in the North American energy infrastructure sector, with pipelines that transport a significant part of the crude oil and gas liquids that flow across Canada and through the United States. The company is also a major distributor of natural gas to households and businesses in Ontario, Quebec, and British Columbia.

Enbridge streamlined its structure last year through the purchase of a number of subsidiaries. Management also secured deals to sell nearly $8 billion in non-core businesses as it shifts its focus more towards regulated assets.

The company has recovered nicely off the 2018 lows and more upside should be on the way. Investors who buy today can pick up a 6% yield with steady dividend growth expected in the coming years.

Power Financial (TSX:PWF)

Power Financial is a Canadian holding company with ownership positions in a number of well-known insurance and wealth management businesses. It is also a partner in a European firm that holds interests in a variety of big international companies that are based in Europe.

The stock gives investors good exposure to financials without taking on the risks of owning a specific company. The subsidiaries performed well in 2018 and Power Financial raised the dividend by 5% last year. The board intends to spend up to $1.65 billion to repurchase as much as 8% of the outstanding stock, and another dividend increase should be on the way.

Investors who buy today can pick up a yield of 5.7%.

The bottom line

RioCan, Enbridge, and Power Financial all pay above-average distributions that should continue to grow. A balanced investment across the three stocks would provide a good base for an income portfolio and offer exposure to a variety of sectors.

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 Andrew Walker owns shares of Enbridge. Enbridge is a recommendation of Stock Advisor Canada.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.