Canadians with only $3,000 in seed capital can build a diversified investment portfolio in Q3 2021. You can allocate $1,000 each in three top TSX stocks. High-yield stocks Manulife Financial (TSX:MFC)(NYSE:MFC), TransAlta Renewables (TSX:RNW), and Sienna Senior Living (TSX:SIA) can deliver lasting income streams.
Manulife is a household name, locally and internationally (John Hancock in the U.S.) The $46.58 billion company is among the world’s top 10 life insurers, no less. Its multi-channel distribution network has been the key to the growth of the customer base in the home country, the U.S., and Asia. You can throw in thousands of distribution partners for good measure.
Apart from its more than 100 years of experience in life insurance, Manulife provides financial advisory and wealth & asset management solutions. Individuals, groups, and institutions form its solid and loyal customer base. Despite the global pandemic in 2020, the assets under management (AUM) grew 10% versus 2019.
However, the $5.5 billion core earnings for the entire year were 9% lower due to the challenging sales environment. Still, net income rose $0.3 billion to $5.9 billion. In Q1 2021, Manulife’s core earnings increased 67% from Q1 2020. According to its President & CEO Roy Gori, the double-digit growth in core earnings was due to the very strong performance in all operating segments.
Suppose you invest now: the share price is $23.99 (+8.28% year-to-date), while the dividend yield is 4.59%. Manulife’s dividends should be sustainable, given the 41.95% payout ratio.
Monthly income stock
TransAlta Renewables is a hit with income investors because the dividend payouts are monthly, not quarterly, like most dividend payers. At $21.66 per share (+1.66% year-to-date), this utility stock pays a 4.32% dividend.
The $5.77 billion renewable energy company boast of operational and highly-contracted renewable power generation facilities. The portfolio consists of wind, hydro, and gas. TransAlta generates stable cash flows from fully contracted power generation assets and long-term contracts. Thus, it delivers consistent returns to investors.
Management reported stellar figures in Q1 2021 (quarter ended March 31, 2021). Total revenues and net earnings attributable to shareholders rose 14.55% and 1,633.33% compared to Q1 2020. The exponential growth in net earnings was primarily due to higher finance income from TransAlta’s investments in its subsidiaries and foreign exchange gains.
The compelling reason to invest in TransAlta is its proven track record of growing cash flows. Moreover, the long-term regulatory contracts assure recurring cash flows for the company and stable dividend payouts to investors for years.
Return to a stable environment
Sienna Senior Living continues to display resiliency in the stock market. The trailing one-year price return is 85.41%, while the current share price of $16.78 represents a 22.49% gain thus far in 2021. This healthcare stock pays a high 5.58% dividend.
The $1.12 billion company owns and operates 70 living residences for seniors and manages 13 residences for third parties. In Q1 2021 (quarter ended March 31, 2021), the 2.7% decrease in revenue versus Q1 2020 reflects the impact of extraordinary expenses during the pandemic.
Nevertheless, Sienna’s President & CEO, Nitin Jain, said the company is returning to a more stable environment due to the significant decrease in active COVID-19 cases at their residences.
Capital growth over time
The three stocks in focus are among TSX’s high-yield dividends stocks. Invest $1,000 in each and see your capital grow significantly over time.