With markets beginning to see greater volatility and central bankers around the world seemingly racing each other to see who can cut interest rates the fastest, high-quality dividend-paying companies should start to see a premium bid for their shares.
Not only do dividends help complement the returns in an investor’s portfolio when markets are trending sideways (or worse), but with interest rates heading lower, those dividends help serve as an attractive source of absolute returns for those seeking an alternative to traditional fixed-income securities.
Shares in chemical processor Chemtrade Logistics (TSX:CHE.UN) currently pay shareholders a whopping 12.3% annual dividend — among the highest of any stocks on the TSX Index these days.
While, in a lot of cases, double-digit yields of this nature may serve as a warning sign against the possibility of a forthcoming dividend cut, I just don’t see that as being the case with CHE.
Coming off its deeply oversold 52-week lows, CHE stock has rallied in recent weeks, gaining over 20% for investors since early May. Still, its shares remain flat in 2019 and are well below their all-time highs.
This could be one that will require a bit of patience for things to fully turn around; however, the 12.3% yield investors are getting paid to wait certainly seems like a tough offer to pass up, especially in light of the current market environment.
Choice Properties REIT (TSX:CHP.UN) markets itself to investors as Canada’s pre-eminent real estate investment trust (REIT), with over 756 properties to its name and over 68 million square feet of leasable space.
Backed by a strong relationship with its principal tenant Loblaw Companies, which also owns the Shoppers Drug Mart franchise, CHP feels it’s advantageously positioned to compete for any attractive new growth opportunities that may come available, helping to secure its leadership position among Canada’s REITs.
CHP shares yield 5.37% annually.
Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) stock has soared in recent months, gaining more than 44% coming off its December lows — a 52-week low mark for the 5.74%-yielding stock.
Perhaps it shouldn’t come as much of a surprise that the stock has performed so well as of late either, as BEP’s cash flows are largely tied to fixed-term, inflation-protected contracts and thus insulated from any unexpected economic shocks, whether they be trade-related or otherwise.
Not only do investors in BEP stock get the benefit of a +5% yield, but management has stated on record its commitment to mid- to high single-digit annual increases to its dividend for the foreseeable future.
Not to mention, of course, exposure to the innovative and exciting world of renewable energy, and the feeling that you’d be doing your small part to help make the world a cleaner, safer, and more sustainable place to live.
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 Jason Phillips has no position in any of the stocks mentioned. Brookfield Renewable Partners and Chemtrade are recommendations of Dividend Investor Canada.