3 High-Growth Stocks That Could Skyrocket

Cineplex Inc. (TSX:CGX), Ensign Energy Services Inc. (TSX:ESI), and Computer Modelling Group Ltd. (TSX:CMG) are high-paying dividend stocks. Careful assessment of their business viability is necessary before investing in the stocks.

| More on:
Money growing in soil , Business success concept.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Dividend investing is becoming a popular strategy among people wanting to build wealth at a faster pace. High-yield stocks are powerful investment instruments to boost passive income and, at the same time, provide more investable funds. Three stocks are currently on the radar screens.

Top-tier entertainment and media company

Cineplex (TSX:CGX) is a well-known Canadian brand operating a chain of theatres and strategically located entertainment venues. There is a perception that companies that can afford to pay high dividends are awash with cash. This impression might not hold true anymore for Cineplex, since movie-going has its lost appeal.

Cineplex is paying a high 7.18% dividend, although the stock is underperforming so far this year. The current price of $24.44 is -2.63% lower than its starting price in 2019. Needless to say, Canada’s largest and most inventive film exhibitor is working to counter the diminishing patronage in movie theatres.

The company is counting on several businesses in the digital commerce space to counter the dwindling revenues in movie theatres. CineplexStore.com, Cineplex Events, Cineplex Media, Cineplex Digital Media, Player One Amusement Group, and WorldGaming.com are the results of the company’s diversification.

Fastest-growing energy services company

Ensign Energy Services (TSX:ESI) pays a dividend of 8.07% with the stock trading at $6.35 and is up +32.57% year to date. This $997.4 million oil and gas drilling company is regarded as a global leader in oilfield services. They offer land-based services for oil, gas, and geothermal energy.

The company has established operations in Canada, the U.S., and nine other foreign countries. Ensign bought 89.3% of Trinidad Drilling in Q4 2018 to strengthen its industry muscle and fortify geographic footprint.

Ensign had a net loss of $37.6 million in 2017. When crude oil and natural gas commodity prices recovered in 2018, the demand for oilfield services instantaneously increased. The company made a turnaround on both financial and operating sides. Net income soared to $58.3 million.

Technology for the oil & gas industry

Computer Modelling Group (TSX:CMG) is a partner of the oil and gas industry. The company’s reservoir simulation software is sought after by companies in need of advanced processes reservoir modelling software. This $466.1 million company has been around for 41 years.

The company’s software application combines AI and machine learning with statistical analysis and non-biased data interpretation. The various simulators are intended to provide dependable primary and secondary oil recovery processes whether in conventional or unconventional oil/gas reservoirs.

CMG’s current price of $5.81 is slightly lower than its starting price in 2019. The stock could be a great long-term hold as the 6.7% dividend appears sustainable. Revenues from contracts are recurring, so there’s less risk even if clients bottom out. Besides, no company can provide the same efficient software.

Fair warning

Companies that pay high dividends are not automatically sound investments. Buying these stocks are opportunities to accumulate wealth. But they can be volatile choices too. You need to evaluate first if the business is viable and enduring. A major business reversal can lead to a dividend cut or scrapping of dividend payments.

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 Christopher Liew has no position in any of the stocks mentioned. Computer Modelling Group is a recommendation of Stock Advisor Canada.

More on Investing

A small flower grows out of a concrete crack.
Investing

3 Top Stocks You Can Still Buy for Under $20 a Share

Canopy Growth stock (TSX:WEED)(NASDAQ:CGC) and these two others are incredible investments to consider as we continue to move out of…

Read more »

Automated vehicles
Tech Stocks

Want to Be a Millionaire? This 1 Canadian Stock Could Soon See a Blistering Rally

If you can take the risk of buying falling shares of some companies with a solid growth outlook, they could…

Read more »

Oil pipes in an oil field
Energy Stocks

3 Top Stocks for Commodity Exposure

Top stocks like Teck Resources have been hit lately, but most commodity markets remain strong and ready for the next…

Read more »

Happy couple being attended by office worker at office
Dividend Stocks

BCE Stock: A Great Pick to Boost Your RRSP Retirement Fund

BCE (TSX:BCE)(NYSE:BCE) stock is a dirt-cheap telecom stock with a huge dividend yield to keep RRSP investors happy.

Read more »

Money growing in soil , Business success concept.
Dividend Stocks

Want Easy Passive Income? These 2 Canadian Dividend Aristocrats Deliver

Passive income stars like Slate Grocery REIT (TSX:SGR.U) should be on your watch list.

Read more »

stock data
Stocks for Beginners

Are You Starting a Stock Portfolio? If Yes, Keep It Safe and Simple

First-time investors should keep their stock portfolios safe and simple by holding time-tested, income-producing assets.

Read more »

Simple life style relaxation with Asian working business woman healthy lifestyle take it easy resting in comfort hotel or home living room having free time with peace of mind and self health balance
Stocks for Beginners

New Investors: Follow the KISS Model With These 3 TSX Stocks

These TSX stocks keep it super simple for new investors. You'll need each of these services over the next decade…

Read more »

stock research, analyze data
Dividend Stocks

RRSP Investors: 1 Cheap TSX Dividend Stock to Buy Now and Own for 35 Years

RRSP investors can still find top TSX dividend stocks to buy at discounted prices.

Read more »