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2 Ultra-High-Yield Dividend-Growth Stocks to Buy Right Now

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High-yield dividend stocks can serve as a strong foundation for your portfolio. They can deliver consistent returns in the form of juicy dividend income.

The following ultra-high-yield stocks offer dividend yields that are at least 2.2 times that of the Canadian market as well as have considerable upside potential.

Cineplex

Cineplex (TSX:CGX) has been divesting into other areas of entertainment, but it still relies heavily on theatre attendance levels. In 2018, 74.4% of its revenue was related to theatre attendance.

Cineplex stock is trading at cheap levels last seen in 2010. At $24 per share as of writing, it trades at a price-to-cash-flow ratio of about 7.1. The entertainment and media company has normally traded at a multiple of 14.2, which implies that an investment today can double from where it is!

However, with the downward action of the stock since July 2017, we’re not expecting that to occur anytime soon. Assuming Cineplex stock will trade at a more modest multiple of 10.5 sooner, it’d imply about 48% upside potential.

What you can count on more is Cineplex’s monthly dividend. Currently, the stock offers an all-time high yield of 7.25%. Cineplex paid out about 61% of adjusted free cash flow as dividends in 2018 compared to 2017’s 70%, which implies a safer dividend.

Cineplex has increased or maintained its dividend every year since 2003. The dividend has climbed every year since 2011, and its five-year dividend-growth rate is 4.1%.

Brookfield Property Partners

Brookfield Property Partners (TSX:BPY.UN)(NASDAQ:BPY) owns and operates a large global real estate portfolio consisting of office, retail, multifamily, industrial, hospitality, triple net lease, self-storage, student housing, and manufactured housing assets. It also takes part in real estate development, which typically leads to higher returns.

Brookfield Property generates stable cash flow from its portfolio of largely income-generating assets. Thus, you can depend on its cash distribution, which is good for a 6.55% yield as of writing.

In 2018, Brookfield Property’s payout ratio was about 85%. This payout ratio was improved to about 60% when accounting for capital gains from asset sales, which is a part of its ongoing strategy for above-average long-term returns.

Brookfield Property has increased or maintained its cash distribution every year since 2013. Going forward, investors can expect the cash distribution to increase 5-8% per year. This implies long-term returns of roughly 11-15% per year without accounting for the fact that the stock is trading at a substantial discount from its fair value.

Investor takeaway

Cineplex and Brookfield Property offer considerable returns of +6% annualized returns from their dividends alone. When accounting for their price appreciation potential as well, the ultra-high-yield stocks can be huge boosters to your overall returns.

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 Kay Ng owns shares of Brookfield Property Partners. Brookfield Property Partners is a recommendation of Stock Advisor Canada.

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