When an investor’s priority is dividends, stocks with yields of 4% and lower aren’t attractive options. However, you can’t randomly pick high yielders, since not all are noteworthy investments. You still need to check if the company can sustain the payouts. Also, you must be sure the inherent risks align with your risk appetite.
If you want to be richer or earn more than the average dividend income, consider investing your $1,000 in Nexus (TSX:NXR.UN) and Aura Minerals (TSX:ORA). The yields are more than 6%, while the respective businesses are stable and capable of providing recurring income streams.
In late January 2021, Nexus was delisted from the TSX Venture Exchange as it climbed up centerstage. According to the real estate investment trust’s (REIT) CEO, Kelly Hanczyk, the graduation to the TSX is part of the team’s strategy to increase the margins of Nexus’s units, bring exposure to a much larger investor base, and improve trading liquidity.
Thus far, the stock is doing great, as evidenced by the 23.5% gain from February 4, 2021, to July 6, 2021. At $10 per share, this $337.25 million REIT pays a hefty 6.36% dividend. Had you invested $500 then, your money would be worth $617.24 today. Also, you’ll have an extra $31.80 in dividend income in one year.
The growth-oriented REIT focuses on acquiring and managing industrial, office, and retail properties. Of the 87 properties in its portfolio, 52 (59.8%) are industrial. Nexus added two more recently following the acquisition of an industrial property in Alberta and Manitoba. The anchor tenant in both properties is Valard Construction, a large utility contractor.
In Q1 2021 (quarter ended March 31, 2021), property revenues and net operating income (NOI) increased by 6.4% and 8.1% versus Q1 2020. The occupancy rate was a high 94%. Besides Summit Industrial and Dream Industrial, Nexus is the latest option in the real estate sector’s industrial space.
Aura Minerals is a top choice in the mining sector. The $1.21 billion company develops and operates gold and base metal projects in the Americas. Current investors are up 21.73% year to date and enjoy a lucrative 6.17%. The dividend is sustainable, given the 56.85% payout ratio.
Moreover, market analysts recommend a strong buy rating. They forecast the price to climb 47% from $16.78 to $24.66 in the next 12 months. It should be a double whammy for investors (capital gain plus high dividends).
Aura made a spectacular rebound in Q1 2021 (quarter ended March 31, 2021). Net revenue rose 138.6% versus Q1 2020. The biggest highlight, however, was the US$13.95 million net income versus the US$17.66 million net loss in the same period in 2020. Furthermore, total production increased by 61.7% to 66,781 gold ounces.
Rodrigo Barbosa, Aura’s CEO, said the record results in Q1 2021 were due to the resumption of all operations. Likewise, the mid-tier gold and copper producer continues its solid growth and performance over the last three quarters. Because of the strong quarterly performance and rising copper prices, Aura could far exceed its gold equivalent ounce guidance for 2021.
Harness the power of dividends
Canadians can harness the power of dividends fully with high yielders like Nexus and Aura Minerals. Both stocks deserve to be in a long-term investor’s stock portfolio. Your capital will compound faster, too, if you keep reinvesting the dividends.
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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends DREAM INDUSTRIAL REIT and SUMMIT INDUSTRIAL INCOME REIT.