Hello, Fools! I’m back to highlight three high-yield dividend stocks. As a reminder, I do this because high-yield dividend stocks:
- provide a healthy income stream in both good and bad markets;
- usually come from stable industries; and
- tend to outperform the market over the long run.
So, if you’re looking to pounce on the recent market crash with an extra $10,000 lying around, this might be a good place to start.
Without further ado, let’s get to it.
Bank on it
After plunging in March, RBC shares have been relatively steady in recent weeks, suggesting that now might be a peaceful moment to jump in. Specifically, the company’s massive scale advantages, increasingly diversified business model, and highly regulated operating environment should continue to support fat long-term dividends.
In the recent quarter, RBC’s capital ratios remained well above regulatory requirements despite a 10% decline in revenue.
“Our scale, diversified business mix, technology investments and talented employees define our leading client franchises,” said President and CEO Dave McKay. “Our strong capital and liquidity position, and disciplined risk management, have enabled us to remain resilient and focused on delivering long-term value for our clients, shareholders and communities.”
RBC now trades at a cheapish forward P/E of 10.9.
Pipeline to profits
TC shares have held up quite well in recent months, suggesting that it remains a solid way to play defense. Specifically, the company’s massive economies of scale, attractive development pipeline, and long-term contracts should continue to support sustained dividend growth.
In the most recent quarter, EPS of $1.22 topped expectations by $0.14 even as revenue slipped 2% to $3.4 billion. More importantly, comparable funds from operations — a key cash flow metric — increased 17% to $2.1 billion.
Management even declared a quarterly dividend of $0.81 per share.
“With approximately 95 per cent of our comparable EBITDA generated from regulated assets and/or long-term contracts, we are largely insulated from short-term volatility associated with volume throughput and commodity prices,” said President and CEO Russ Girling.
TC shares currently trade at a P/E of 13.2.
Sunny skies ahead
While Suncor shares remain down about 50% from their 52-week highs, now might be a perfect time to pounce. Even with volatile oil prices, Suncor can maintain relatively stable cash flows due to its diversified operations and rock-solid financial position.
To be sure, management recently cut its dividend in half to protect the balance sheet. That said, the company’s trailing-12-month free cash flow of $4.3 billion should give investors plenty of comfort.
“The COVID‑19 pandemic has led to an unprecedented decline in demand for transportation fuels and a significant oversupply of crude oil resulting in a substantial decline in crude oil prices,” said President and CEO Mark Little. “Our integrated model and balance sheet strength are distinct advantages coming into this environment.”
Suncor currently trades at a price-to-book of 0.9.
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.