Investors were not given much time to catch their breath before this market regained momentum in June. Anxiety appeared to evaporate after a volatile May, largely on the back of assurances from central banks that they would take measures necessary in the face of looming headwinds. The spectre of rate cuts looms large over North American and global markets.
Bond yields are still being routed in early July, which means that income-generating equities should remain on your radar. Today I want to look at three high-yield dividend stocks that can produce nice tax-free income for investors in this summer and beyond.
Chorus Aviation (TSX:CHR) charted a fantastic first half in 2019. Shares had climbed 43% in 2019 as of close on July 3. This is gravy for income investors, especially those who bought on that tasty dip in late December 2018.
There is even more reason for optimism after a solid first quarter 2019 saw Chorus secure a $300 million credit facility to expand its Regional Aircraft Leasing segment. It grew its fleet to 45 in the quarter.
Chorus has been no slouch on the dividend front. The company last confirmed a monthly dividend of $0.04 per share that was paid to shareholders in late June. This represents a yield of 6% at the time of this writing. Although with its healthy dividend, Chorus offers decent value for investors today.
The stock boasts a price-to-earnings ratio of 10, and its shares have slipped out of technically overbought territory since retreating from mid-June levels.
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Freehold Royalties (TSX:FRU) stock has dropped 2% over the past three months as of close on July 3. Energy stocks on the TSX have struggled in the late spring and early summer, and it should come as no surprise. Oil entered a bear market in early June, primarily due to swelling U.S. supply and concerns over how U.S.-China trade tensions could negatively impact global economic growth and oil demand.
Freehold has long lived up to its mission in delivering income to shareholders with low risk. In the first quarter, the company more than covered its dividend levels with funds from operations of $29.3 million or $0.25 per share. Freehold currently offers a monthly dividend payout of $0.0525 per share, which represents a tasty 7.6% yield.
Its strong value sheet should attract income investors, and it comes at nice value right now. Freehold is trading at the low end of its 52-week range and its RSI fell below the 50 mark in July. Although it’s not technically oversold, it comes at a solid price point given its upside.
Pembina Pipeline (TSX:PPL)(NYSE:PBA) stock has flattened out in the face of headwinds for the oil and gas sector, but shares have still climbed 24% in 2019 as of close on July 3. The stock is unique in the battered energy sector because of its high price point.
At the time of writing, it’s trading just below 52-week highs. In the first quarter, cash flow from operations surged 22% year over year, which should pique investors interest and boost confidence in its dividend.
On that front, Pembina recently boosted its monthly dividend to $0.2 per share, which represents a solid 4.8% yield at the time of this writing. The company has achieved dividend growth for seven consecutive years.
As I mentioned, Pembina is a little pricier than our previous equities with a P/E of 21 right now. Shares had an RSI of 59 as of close on July 3 as it trends toward overbought territory.
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 Ambrose O'Callaghan has no position in any of the stocks mentioned. Chorus Aviation and Freehold Royalties are recommendations of Stock Advisor Canada. Pembina Pipeline is a recommendation of Dividend Investor Canada.