Investing in dividend stocks is usually considered a safe way to generate passive income. If you are looking for a safe and steady income, without keeping your eyes peeled for the market, dividend stocks can be just the thing. Monthly dividend-paying shares might help you manage your finances even better.
Let’s take a look at two high-yield dividend stocks. Inter Pipeline (TSX:IPL) and Alaris Royalty (TSX:AD) are two Canadian Dividend Aristocrats with high dividend yields.
Inter Pipeline is one of the largest petroleum transportation and extraction companies in the country. With a market capitalization of $9.9 billion, the company hasn’t yet cracked the top 10, but the market presence and growth are still formidable.
In an uncertain global petroleum market with wary investors, Inter Pipeline recently rejected a $12.4 billion offer made by Chinese CK Infrastructure Holdings. This takeover attempt shows the existing and future potential of the company.
Growth of about 15% followed the bid in the market share value. The prices have come down from the year’s highest of $25.2 to about $23.85 per share at the time of writing. This downturn makes now an excellent time to consider buying in this stock.
With revenue generation of $641.6 million (1.68% year-over-year increase) and a net income of $260.3 million (91.26% year-over-year increase), the company currently seems stable as well as profitable. The dividend yield of 7.12% results in a monthly payout of $0.1425 per share. It has only increased in the past five years.
Inter Pipeline is in the process of building the Heartland petrochemical complex, which will cost the company approximately $3.5 billion. It has placed a strain on the current cash flows of the company, but once completed in 2021, it will significantly thicken the revenue stream.
Heartland Complex, in addition to the company’s considerable investments in storage facilities in Europe, may put investors at ease about Inter Pipeline’s future growth and the growth of its dividends.
Alaris Royalty is a small equity firm, employing only 14 people. The company invests in small businesses, mainly in the U.S. Investments are made on terms that pay Alaris very well in cash and security but not in control.
This unique business model makes Alaris a lifesaver for many entrepreneurs and family-run businesses. These businesses require investors for stability or growth but do not want to give away too much control. Alaris invests in companies that will hold through hard times, making the company’s returns relatively safe in the times of recession.
In the past five years, Alaris has paid the same dividend for just two consecutive years. Otherwise, the company has increased its dividend. The company has a fantastic dividend yield of 8.28% and a monthly dividend payout of $0.1375 per share.
With the current market value of the company at just below $20 per share, now might be a good time to consider this steady Dividend Aristocrat.
Dividend stocks are safe bets, even in tough times. To make it even more reliable, investors tend to choose Dividend Aristocrats. This is why we suggest taking a good look at Alaris and Inter Pipeline for your investment portfolio.
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 Adam Othman has no position in any of the stocks mentioned. Alaris is a recommendation of Dividend Investor Canada.