Investors are constantly looking for opportunities to derive better yields from their portfolios. However, diversity and growth are also factors one should be looking for. With the market opening up, some sectors are certain to pick up better than others. Identifying such trends is essential to generate a good Return on Investment. Here, I have listed two stocks with high dividend yields offering diversity as well.
Kirkland Lake Gold
As if gold wasn’t defensive enough on its own, Kirkland Lake’s valuation makes this stock stand out among the rest. The company’s trading at a valuation of fewer than 16 times earnings with some of the best assets in the precious metals mining space.
The company’s high-grade production in mining-friendly jurisdictions like Canada and Australia ought to stand out to investors. The earnings quality stemming from sky-high margins and operating efficiencies make this miner a top pick of mine.
Additionally, given Kirkland Lake’s high-quality balance sheet (with essentially no debt), I think the company could be in the market to make a deal happen. Indeed, the company will need to replace some production in the medium term as one of its high-grade mines nears the end of its life. I’m keeping my eye on Kirkland Lake right now in this regard.
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As far as defensive sectors go, telecom players are inherently defensive. The cash flows these behemoths provide allow for extremely stable long-term returns for shareholders.
Additionally, the 5G catalyst is set to be huge in terms of incremental cash flow growth over the long term. For industry leaders like Rogers Communications (TSX:RCI.B)(NYSE:RCI), these are simply too many factors to ignore right now.
Rogers is bolstering its market position via a deal to acquire Shaw Communications (TSX:SJR.B)(NYSE:SJR) in a massive US$20 billion deal. This deal is set to cement the company’s cash flow growth trajectory, both in its existing core businesses as well as in 5G wireless.
Indeed, capital spending is going to rise substantially as a result of this deal. However, Rogers’s expanded footprint in Western Canada and the synergies that are possible as a result of this deal make for an interesting hold right now.
As far as defensive TSX plays go, both Kirkland Lake and Rogers Communications fit the bill nicely. These blue-chip stocks are among the best for diversification and cash flow stability in these otherwise uncertain times.
Like these top defensive picks? Here are a few great high-growth options to consider right now:
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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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends ROGERS COMMUNICATIONS INC. CL B NV.