2 TSX Stocks for Dividends up to 10% in November 2020

Here are two dividend stocks that offer juicy income and considerable price appreciation potential.

| More on:
Increasing yield

Image source: Getty Images

Investors can get decent income of about 5-10% from these two dividend stocks. Additionally, both can also deliver respectable price appreciation over the next few years.


Nutrien (TSX:NTR)(NYSE:NTR) is the world’s largest fertilizer producer and the largest potash producer.  Its three main crop nutrients are nitrogen, potash, and phosphate. Its trailing 12-month revenue was nearly US$19.5 billion.

On Monday, the company reported its third-quarter (Q3) results. In the first nine months of the year, its sales improved by 1% to US$16,807 million. It took a non-cash impairment of US$823 million for the quarter that reduced its earnings. The impairment was primarily associated with its long-term outlook of lower phosphate prices. Consequently, its net income of US$143 million was 86% lower year to date.

The strength of the business is better illustrated by its year-to-date adjusted EBITDA of US$2,899 million, which declined 14% year over year. It also generated free cash flow of US$1,634 million, down 19%.

It looks like investors will need to be more patient with this name. Nutrien estimates to report 2020 adjusted earnings per share of US$1.60-$1.85 and adjusted EBITDA of US$3.5-$3.7 billion. Based on the company’s earnings estimates, its payout ratio is stretched at just under 105%.

Thankfully, on a closer look at Nutrien’s free cash flow generation, its dividend is protected. Its trailing 12-month payout ratio was under 70% based on its free cash flow generated.

The stock currently yields close to 4.7% based on a quarterly dividend of US$0.45 per share. The dividend stock can recover to the $70 level over the next few years, which represents upside potential of more than 38%.


As an energy infrastructure company, Keyera (TSX:KEY) has been quite resilient in the energy space. In Q3, its gathering and processing business was negatively impacted by a six-week unplanned outage at its Wapiti gas plant as well as lower gas-processing volumes. Its liquids infrastructure operations remain resilient.

On Tuesday, the company reported its Q3 results. In the first nine months of the year, it generated operating cash flow of $571.7 million, down 15% year over year. It was able to preserve capital by reducing its capital spending by 37% compared to the period a year ago.

Funds from operations were up 18% to $654.6 million. The distributable cash flow (DCF) is the key metric, as Keyera pays dividends from it. Keyera managed to increase its DCF by 29% to $585.5 million.

Its DCF per share increased by 30% to $2.66, resulting in a payout ratio of 54% for the period, despite boosting its dividend per share by 5.1%. It’s also good to see that Keyera’s adjusted EBITDA also remained stable by rising 3% to $705.4 million.

Currently, the stock yields 9.9% based on its monthly dividend of $0.16 per share. The dividend stock can recover to the $30 level over the next few years, which represents upside potential of more than 55%.

Notably, CEO David G. Smith is scheduled to retire at the end of the year. President Dean Setoguchi will take over the role. Keyera’s decent balance sheet and integrated business should allow it to continue being a relatively defensive investment in the energy space.

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 Kay Ng owns shares of Nutrien Ltd. The Motley Fool recommends KEYERA CORP and Nutrien Ltd.

More on Dividend Stocks

stock research, analyze data
Dividend Stocks

How Much to Invest to Get $500 in Dividends Every Month

TSX dividend stocks such as Enbridge, TD Bank, and Telus, can help you earn $500 in monthly dividend payments.

Read more »

Golden crown on a red velvet background
Dividend Stocks

Dividend Powerhouses: Canadian Stocks to Fuel Your Portfolio

These two top Canadian dividend aristocrats are some of the top stocks on the TSX to buy now and hold…

Read more »

Dial moving from 4G to 5G
Dividend Stocks

This Undervalued Dividend Stock is Worth Buying Right Now

Want an undervalued dividend stock with long-term potential and a juicy yield? Here's an option you may regret not buying…

Read more »

A worker gives a business presentation.
Dividend Stocks

1 Stock I’m Buying Hand Over Fist in July Despite the Market’s Pessimism

This top dividend stock is going through a rough patch, but don't let that count out all the growth we've…

Read more »

person on phone leaning against outside wall with scenic view at airbnb rental property
Dividend Stocks

2 TSX Stocks Poised to Have a Big Summer

Restaurant Brands International (TSX:QSR) stock and another darling that could be too cheap to ignore this summer.

Read more »

Dividend Stocks

Forget Fortis Stock: Buy This Magnificent Utilities Stock Instead

Looking for high dividends and returns? Then I'm sorry, but Fortis (TSX:FTS) stock probably isn't for you.

Read more »

Increasing yield
Dividend Stocks

2 High-Yield (But Slightly Risky) Stocks to Keep Your Eye on

Have these top TSX dividend stocks finally bottomed?

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks I’d Buy if They Fall a Bit

Any near-term decline in these two top Canadian dividend stocks will make them look even more attractive.

Read more »