In times of uncertainty, you can seek refuge in dividend aristocrats. With volatility gripping the market again, Canadian Utilities (TSX:CU), Laurentian (TSX:LB), and Cineplex (TSX:CGX) should have a place in your portfolio. The stocks aren’t just dividend aristocrats – they’re dividend rock stars.
Not only will your money will be safeguarded against market volatility, but you’ll also get fantastic yields of up to 7%. There’s no need to fear recession, either.
Canadian Utilities hold the longest record of consecutive dividend increases on the TSX. The company has increased its dividend every year for the past 47 years.
Earnings of this utility company are never in doubt, as most of them are derived from the very stable regulated market. The recurring revenue ensures dividend stability.
The 17.75% increase in adjusted net earnings in Q2 2019 versus Q2 2018 is testimony to the company’s slow but steady growth.
On an accumulative basis, the utility company’s rate base has increased by 45% since 2013, and it is expected to continue growing at a pace of around 4-5% annually.
So you can rely on this defensive stock during drawn-out uncertainty. The growth forecast for Canadian Utilities is a modest but stable 10% until 2020, which is sustainable with the chance of a slight increase beyond next year. The company has also expanded in Mexico, which could boost long-term growth.
The current dividend yield of 4.5% is not too bad either. As such, Canadian Utilities can be your income provider for years on end.
Small but prodigious bank
Laurentian Bank is another dividend aristocrat worthy of your consideration. This $1.9 billion financial institution bank is not among the Big Five banks in Canada. However, the yields of the Big Five pale in comparison to Laurentian’s 5.85% dividend.
Over the past 10 years, the bank has been delivering consistent income to dividend investors. The payout ratio of 61.58% shows that dividends are sufficiently covered by the bank’s earnings.
Furthermore, the bank provides banking and financial services to small and medium-sized enterprises. This captured market drives the growth of Laurentian Bank. By 2022, the bank’s profitability could be on a par with that of the major Canadian banks.
In the midst of declining number of moviegoers, Cineplex is turning in box office numbers. This movie and entertainment company recorded its highest ever second-quarter revenue. Cineplex’s box office revenue per person (BPP) increased by $2.1 million compared to the same period last year.
The BPP growth made up for the decline in theater attendance. But Cineplex sees the 10% increase in box office sales as a prelude to a better third-quarter and the rest of 2019.
There will be a slew of powerful movie titles, from sequels to first time stories, during the next two quarters.
Cineplex is no longer concentrated in movies. The company expanded with the opening of “Rec Rooms” which are already attracting a broader audience than the regular moviegoers.
Cineplex is one of the highest-paying dividend stocks. The 7.0% dividend yield is top-drawer. This could increase as the company’s diversification strategy progresses.
Accelerate your earning power
Canadian Utilities, Laurentian Bank, and Cineplex are the dividend aristocrats that can turn your average portfolio into one that would enhance your earning power. With market volatility heightening, you could look at adding these into your portfolio for the long term.
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Fool contributor Christopher Liew has no position in any of the stocks mentioned.