Hi there, 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 healthy 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 5.5%. If you spread them out evenly in a $250K RRSP account, the group will provide you with an annual income stream of $13,667; on top all the appreciation you could earn.
Let’s get to it.
Paid with Peyto
Leading off our list is energy explorer Peyto Exploration & Development (TSX:PEY), which currently offers juicy dividend yield of 7.3%.
The stock has been walloped over the past year on weak energy prices, but recent results suggest that the dividend is safe. In Q2, Peyto generated earnings of $0.59 per share — its 58th straight quarter of positive earnings — and funds from operations clocked in at $76 million.
Moreover, management has slowed capital spending in order to firm up the balance sheet.
“By reducing its capital investment program, Peyto’s existing producing reserves will stabilize and become more sustainable with ever lower decline rates and an increasing reserve life, providing a solid platform for growth in shareholder value in the future,” wrote Peyto.
Peyto is down more than 50% in 2019.
Telus what you know
Telus’ efficient scale, steady subscriber growth, and fiber-to-home buildout should continue to underpin its hefty payout. In the most recent quarter, revenue improved 4.2%, EBITDA increased 10%, and earnings popped 31%.
During the quarter, wireless customer additions jumped 45% to 154,000 while wireline customer additions clocked in at 32,000. Meanwhile, free cash flow was a solid $324 million.
“TELUS reported strong second quarter results, including robust subscriber net additions across our portfolio of growth services,” said President and CEO Darren Entwistle. “This was anchored by the TELUS teams’ efforts to deliver a superior performance in respect of wireless and wireline customer loyalty.”
Telus is up 5% in 2019.
Suncor’s dividend continues to be backed by an attractive asset portfolio, steady cash flows, and long-term oil sands growth. In the most recent quarter, funds from operations increased 10% to new Q2 record of $3 billion as total production jumped 21% to 803,900 boe/day.
Management also raised the upper end of its 2019 capital expenditure forecast to $4.9 billion-$5.4 billion.
“Strong cash flow generation and our commitment to capital discipline allowed us to return value to our shareholders through $658 million in dividends and $552 million in share repurchases while, at the same time, strengthening our balance sheet,” said CEO Mark Little.
Suncor shares are down 3% 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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Brian Pacampara owns no position in any of the companies mentioned.