3 Top High-Yield Stocks to Buy in November

If you want passive income, high yield dividend stocks are the clear choice. These are the best, and safest, out there.

| More on:
grow money, wealth build

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In case you’re wondering, no. It’s not just Canada. Around the world markets continue to be a volatile place, even with the TSX at all-time highs. Interest rates are dropping as with inflation, but a United States presidential election coming up certainly adds a wrench in the plans.

That’s why dividend stocks can be such a great way to add some stability through consistent income. Today, we’re going to look at stocks that not only provide generous dividends. These also have strong positions in their respective industries, with potential for future growth. Let’s take a closer look at why these three companies stand out for income investors, while also acknowledging the potential hurdles they might face.

Created with Highcharts 11.4.3Parex Resources + Kp Tissue + Labrador Iron Ore Royalty PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Parex stock

First up, we have Parex Resources (TSX:PXT), a Canadian oil and gas dividend stock with an impressive forward dividend yield of 11.8% at writing, thus making it an attractive option for income-seeking investors. PXT recently reported quarterly earnings growth of 11.6% year-over-year, although its stock price has seen significant volatility, trading well below its 52-week high.

The dividend stock is known for its solid profitability, with a return on equity of 17% and an impressive operating margin of 45%. While the energy market is inherently volatile, Parex’s efficient operations in Colombia and its low debt make it a resilient player. Investors should keep an eye on oil price fluctuations and geopolitical risks in South America. Yet Parex’s ability to generate cash flow even during downturns should keep those dividend payments flowing.

Labrador Iron Ore

Next we have Labrador Iron Ore (TSX:LIF) offering a dividend yield of approximately 8.7%. It has a history of rewarding shareholders generously, supported by its 15.5% return on assets. Plus, the recent boost in production from the Iron Ore Company of Canada (IOC) bodes well for LIF’s financial outlook.

With the iron ore market remaining relatively stable, LIF’s consistent cash flow allows for robust dividend payouts. However, challenges could arise from potential commodity price drops or global demand slowdowns, particularly in key markets like China. Nevertheless, LIF’s low debt and high operating margins make it well-positioned to navigate these potential hurdles. All while still offering strong passive income potential.

KP Tissue

Finally, we have KP Tissue (TSX:KPT), known for its consumer paper products. It may not be as flashy as the other two, but it still holds appeal with an 8.8% dividend yield. KPT faced some challenges as well, including a recent dip in earnings. Yet its long-term strategy shows promise.

Notably, the startup of its Sherbrooke plant is expected to enhance operational efficiency and boost future earnings. The dividend stock’s steady market position in everyday consumer goods makes it a more defensive play for dividend investors. Though higher payout ratios of around 120% could mean potential risks if profits do not recover soon. However, the essential nature of its products of paper towels, tissues, and toilet paper ensures that demand remains stable even in uncertain economic conditions.

Key considerations

Looking ahead, Parex Resources stands to benefit from any rebound in oil prices and its prudent management of operating costs. The dividend stock is well-prepared to maintain its strong dividend payout even in fluctuating market environments. Labrador Iron Ore, on the other hand, will rely heavily on iron ore production stability. Yet its strong balance sheet and operational advantages keep it a safe bet for those looking for long-term income. KP Tissue, while more of a wildcard due to its operational challenges, offers potential upside from the successful ramp-up of its Sherbrooke plant. This could lead to higher profits and dividend sustainability.

However, investors should also be cautious of each stock’s potential struggles. For Parex, the main risk remains oil price volatility and the ever-present geopolitical risks in South America. For Labrador Iron Ore, any significant downturn in the iron ore market, particularly in China, could put pressure on both revenues and dividends. Lastly, KP Tissue’s high payout ratio suggests that the dividend stock may struggle to sustain its high dividends if profitability doesn’t improve in the near term.

Foolish takeaway

All considered, Parex Resources, Labrador Iron Ore, and KP Tissue each offer attractive dividend yields, thereby making them great options for passive income investors in November. While each dividend stock has its unique challenges, strong balance sheets, efficient operations, and commitment to returning value to shareholders make them solid for a high-yield portfolio. Keep an eye on market conditions and company developments. But these dividend stocks could continue to deliver substantial dividends in the months ahead.

Should you invest $1,000 in Kp Tissue Inc. right now?

Before you buy stock in Kp Tissue Inc., consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Kp Tissue Inc. wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Parex Resources. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Here’s Exactly How a $20,000 TFSA Could Potentially Grow to $200,000

Index funds like the iShares S&P/TSX Capped Composite Index (TSX:XIC) are tax free in a TFSA.

Read more »

Dividend Stocks

How I’d Invest $6,000 in Canadian Real Estate Stocks to Build Lasting Wealth

Canadian REITs on sale! See how grocery-anchored retail properties offering 9% yields could turn $6,000 into lasting wealth despite US…

Read more »

rain rolls off a protective umbrella in a rainstorm
Dividend Stocks

Economic Headwinds: Should You Still Consider Buying the Dip?

A market dip might seem like a bumpy road, but it can be far smoother in the future with the…

Read more »

e-commerce shopping getting a package
Dividend Stocks

Consumer Spending Plays Amidst the Current Market Dip

Consumption may go down in market dips, but certain consumer stocks are certainly better off than others.

Read more »

Asset Management
Dividend Stocks

12% Dividend Yield! I’m Buying This TSX Stock and Holding for Decades

Stocks with high-dividend yields carry risks. But they could be a good long-term investment. Here is a 12% dividend stock…

Read more »

Canadian flag
Dividend Stocks

How I’d Build a Foundation of Canadian Value Stocks in My Investment Strategy

Canadian investors can explore iShares Canadian Value Index ETF for value stock ideas to build a foundation for their diversified…

Read more »

Canadian dollars are printed
Dividend Stocks

How I’d Transform a $30,000 TFSA Into a Cash-Flow Machine

Here's why TFSA investors should consider owning dividend stocks such as Mullen Group in 2025.

Read more »

A woman shops in a grocery store while pushing a stroller with a child
Dividend Stocks

Dip Buyers Could Win Big in Today’s Market Dip

If you want to buy the dip, think long-term. Which is why this TSX stock is a top option.

Read more »