Investors saving for retirement, or in retirement, might want to consider stocks with juicy dividends and dividends that are safe from unexpected cuts.
Safety of the dividend is paramount. Nothing destroys a stock price more than a reduction of the dividend.
Since interest bearing investments have reached the five per cent area, enthusiasm for higher dividend stocks has declined.
Some investors chose safety of principal over high dividends.
Stocks fluctuate in value whereas guaranteed investment certificates do not. Bonds will range in value but not as greatly as stocks.
High on the list of eight dividend payers is Enbridge, yielding 7.57 per cent on a $42.28 price.
The pipeline/natural gas utility operator’s price has suffered as investors linked it with the fossil fuel industry.
Boston Pizza Royalty units yield 8.29 per cent on a price of $15.47. Once a growth company Boston Pizza has fewer places in Canada for expansion, limiting increases in royalty payments.
Whitecap Petroleum yields 8.6 per cent on its $8.44 price with high payouts likely as cash flow increases from new wells.
Oil and gas infrastructure and utility company AltaGas yields 5.75 per cent on the $18.83 price. The company has increased dividends between five and seven per cent annually with plans to keep that up until at least 2028.
Three Canadian banks are among the high dividend payers.
These banks are among the safest in the world with conservative dividend policies. Higher interest rates should propel earnings in a few years.
Canada’s largest bank, RBC, yields 4.12 per cent on the $134.07 price.
BMO, which bought a large U.S. bank last year, yields 4.69 per cent on the $129.34 price.
TD bank, yielding 5.02 per cent on its $81.44 price has a big chunk of cash left after a failed U.S. bank takeover. That cash can be used to buy back shares and increase dividends or for another acquisition.
Scotia Bank is not a favourite as the South American bank investments have proven more problematic than profitable.
In the real estate sector Riocan, the shopping mall operator, yields 5.75 per cent on the $18.83 price.
Riocan owns high quality malls across Canada and has diversified into developing residential spaces on mall properties.
CAUTION: Remember when investing, consult your adviser and do your homework before buying any security. Bizworld does not recommend investments.
Ron Walter can be reached at ronjoy@sasktel.net
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
