Hi again, Fools. I’m back to highlight three top high-yield dividend stocks. As a reminder, I do this because stocks with attractive yields
- provide a fat income stream in both good and bad markets; and
- tend to outperform the market over the long run.
The three stocks below offer an average dividend yield of 4.5%. If you spread them out evenly in a $250K RRSP account, the group will provide you with an annual income stream of $11,250; on top all the appreciation you could earn.
Let’s get to it.
Telus’s fat payout is heavily supported by massive scale, a rock-solid balance sheet, and hefty recurring cash flows. In the most recent quarter, for example, revenue improved 4.2% to $3.5 billion, while free cash flow before taxes clocked in at a whopping $503 million.
On that strength, management boosted the quarterly dividend to $0.5625 per share, its 17th increase since 2011.
“Our consistent execution, healthy balance sheet and strong cash flow outlook, including our expectations for moderating capital expenditures, provides our team with the confidence to extend our multi-year dividend growth program through 2022,” said CFO Doug French.
Telus shares are up 8% so far in 2019.
Suncor’s dividend is underpinned by attractive oil sands assets, significant growth prospects, and a long track record of operational success. In fact, the company’s daily oil sands production has increased 600% ever since going public in 1992. Over the same time frame, Suncor’s total return on investment has returned a whopping 5,173%.
In the most recent quarter, the company generated $2.6 billion in funds from operations.
“Suncor’s integrated model has consistently generated positive results through changing market conditions, including mandatory production curtailments in Alberta, and the first quarter of 2019 was no different,” said COO Mark Little.
Suncor is up 10% in 2019.
CIBC’s dividend is backed by a strong regulatory operating environment, massive scale, and an increasingly diverse business model. Revenue improved 3.7% to $4.5 billion in the most recent quarter, fueled by strong performance in commercial banking, wealth management, and capital markets.
CIBC also sought approval from the Toronto Stock Exchange to repurchase up to nine million of its common shares.
“We delivered solid earnings this quarter, reflecting the strength of our increasingly diversified business,” says CEO Victor Dodig. “We continued to invest across our bank for the future, while gaining efficiencies through our ongoing transformation.”
CIBC shares are up 2% so far in 2019.
The bottom line
There you have it, Fools: three top high-yield stocks worth checking out.
As always, don’t view them as formal recommendations. Instead, look at them as a starting point for more research. A dividend cut (or halt) can be especially painful, so you’ll still need to do plenty of due diligence.
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Fool contributor Brian Pacampara owns no position in any of the companies mentioned.