Fast-Rising High Dividend Stocks to Generate Income While the Market Slows Down

Dividend stocks are companies that pay out a portion of their revenues to stakeholders. They make for a great income investment and if done right, can become an integral part of your revenue streams. For dividend investors, it is a good strategy to DRIP, where dividend payments are reinvested to purchase more shares in the company. This is a good strategy for the “set it and forget it” investment style.

Furthermore, in times of economic slowdown, dividend stocks are a boon in your portfolio. These companies will pay you to wait it out. Dividend stocks are seen as income generators combined with capital gains.

🛢 Basic Materials
Canadian Stocks
Methanex Corp (MX-T)
A methanol producer and distributor. Energy commodity prices have come down and general global economic growth is stalling. The dividend is considered safe by analysts and the stock has become cheaper. They are a global leader with operations across the globe. They pay a dividend of 3.3%

Methanex Corp (MX-T) — Stockchase

$108.75 is his target price. It's a cyclical stock. Strong world growth will push this up, but if China slows down, this could even fall back to $61. Sell at $100.

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⚡ Energy
Canadian Stocks

Canadian Natural Rsrcs (CNQ-T)
A Canadian oil and gas exploration and production company. They are generating a lot of free cash flow and is managed well. They do not have a debt problem. CNQ also has an impressive history of 17 years of dividend growth. The dividend is at 4.19%

Canadian Natural Rsrcs (CNQ-T) — Stockchase

It is always a buy close to book value. In the low $30s it makes sense. They are buying back their stock aggressively. This will be an astute investment if we get back to $70-$100 oil. The stock has upside. They are generating a lot of free cash flow.

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Suncor Energy Inc (SU-T)
An integrated energy company based in Canada. Suncor is considered a good way to dip your toe in the energy sector since they are so big and should do alright. They pay a dividend yield of 4%

Suncor Energy Inc (SU-T) — Stockchase

(A Top Pick Oct 24/18, Down 4%) He'd still buy it today. Not as much torque as in other oil names, but SU is widely held and pays a safe 4% yield. It's the top energy company in Canada, both upstream and downstream. Their refining profits will improve going forward.

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Enbridge (ENB-T)
An energy transportation company that is looking to complete Line 3 by 2020. This is considered a good income play but not a share appreciation name. The dividend is safe at 6.5%

Enbridge (ENB-T) — Stockchase

Dividend is good. The pipeline side is a utility so your money is safe. It went through some difficult times but it’s up and he would go with it for the dividends.

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🏛 Financials
Canadian Stocks

Canadian Imperial Bank of Commerce (CM-T)
One of the Big Five banks in Canada. Some analysts consider this bank to be particularly under valued. They pay a dividend of 5.4%

Canadian Imperial Bank of Commerce (CM-T) — Stockchase

They surprised everybody in the last quarter with earnings. You get over 5.5% yield. The valuation of this banks is out of kilter with the other banks. People are concerned that they are too Canada-centric. At this price it is his Top Pick. It is a screaming buy at $100. (Analysts’ price target is $110.94)

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Bank of Nova Scotia (BNS-T)
The third largest bank in Canada. They are one of the most global Canadian banks with operations particularly in Latin America. They have been the lagger of the Canadian banks and offer good value right now. The dividend yield is 5%.

Bank of Nova Scotia (BNS-T) — Stockchase

Pays a 4.7% yield. They're expanding into wealth management well with acquisitions last year and enjoy improving international earnings momentum due to Chile. They're investing to improve their IT operations. Sells at a compelling valuation. (Analysts’ price target is $77.13)

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🛍 Consumer
Canadian Stocks

Magna Int’l. (A) (MG-T)
A global automotive supplier. They were hit hard due to reduced guidance, slow-down in Europe. They also made an acquisition that many think they paid too much for. They are investing in autonomous technology and may be planning to buy back shares.

Magna Int'l. (A) (MG-T) — Stockchase

Missed earnings last quarter. Lower 2019 volumes. Concern that new technology will elevate costs. Only 1% EPS growth. Exceptionally cheap at 6x. Really good over the long term, if not the next year. (Analysts’ price target is $72.11)

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US Stocks

Colgate Palmolive (CL-N)
An American consumer products company. Analysts are pessimistic about this as they were negatively impacted by rising interest rates. Before, it was considered a bond proxy. However, in the long term it is considered a safe investment. The yield is 2.47%

Colgate Palmolive (CL-N) — Stockchase

Global consumer non-durable and big exposure in the developing world. They are weakest in North America and strong everywhere else. Favourably disposed to this one. Would probably own Proctor & Gamble (PG-N) as they have better momentum and growth in the developing world.

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Genuine Parts Company (GPC-N)
A service organization for automotive parts and other replacement materials. They are the biggest auto parts manufacturer in North America. In slower economic times, people tend to repair cars more. They have a good history of increasing dividends annually. A dividend yield of 2.96%.

Genuine Parts Company (GPC-N) — Stockchase

North America's largest auto parts wholesale distributor. Profit margins are increasing. A 3% yield. Well managed. Generates lots of cash.

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Hormel Foods Corp (HRL-N)
A well managed food company. They have been struggling with growing earnings and protein prices due to livestock epidemics. They raise dividends annually and it is currently at 2%.

Hormel Foods Corp (HRL-N) — Stockchase

Spam and peanut butter manufacturer. A great company and has done a great job of executing, but it is expensive. Trading at nearly 24X.

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Coca-Cola Company (KO-N)
The famous beverage company that everyone knows. They are diversifying away from their main activity to include energy drinks and coffee. There is still a lot of room to grow. They pay a dividend of 3.44%.

Coca-Cola Company (KO-N) — Stockchase

Not a sector he favours at this time. However, this has been decent, relative to the other names in the space. Trading at about 23.5X Earnings with a 6%-7% growth rate, making it a bit expensive. It gives a 4X PEG ratio, which is the high end of its range. It’s forward PE of 23.5…

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Lowes Companies Inc. (LOW-N)
A home improvement store. The company has profited from the DIY movement. They recently brought in new management as the company has underperformed. They pay a dividend of 1.99%.

Lowes Companies Inc. (LOW-N) — Stockchase

This one is coming on and improving their operations. They expanded their presence in Canada by buying Rona. They are in Canada, Mexico and the US. As millennials move out of parents’ basements, this stock should do well.

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Procter & Gamble (PG-N)
A multinational consumer goods company that was trading at a discount until a bump up recently. It is in a slow growth space and growth is expected to be around 10%. They pay a dividend of 2.7%.

Procter & Gamble (PG-N) — Stockchase

The group has sold off a but due to a lack of innovation and more competition; it's easier than for e-companies to sell directly to consumers. There needs to be more pricing flexbility given they compete with the Amazons of the world. They're in a margin squeeze. An investor needs exposure in this space. P&G…

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🚚 Industrials
Canadian Stocks

Exco Technologies (XTC-T)
A Canadian multinational developer and manufacturer for automobiles and equipment. They have a good history of buying back shares and increasing dividends. A well run company with good capital allocations. They pay a dividend of 4.48%.

Exco Technologies (XTC-T) — Stockchase

He really likes the company. It is in the same business as LNR-T and MG-T, but growing faster. It is too small to be a takeover target. There is a lot to like about the stock. 1.65% yield.

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Toromont Industries (TIH-T)
They surprised investors with a dividend increase of 21% in the last quarter. One of the biggest Caterpillar distributors in the world with focus in Ontario. They do well in tandem with construction and mining. They pay a dividend yield of 1.8%.

Toromont Industries (TIH-T) — Stockchase

*Short.* The only Caterpillar dealer in Ontario as well as having a small business in arenas. Have benefited for years from an increasing mining sector, and in Ontario it is primarily gold related, and gold miners are not doing that well. Also trading at a pretty hefty premium to the competition. A strengthening US$ means…

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US Stocks

Emerson Electric (EMR-N)
An industry company that has pulled back due to concerns over the trade war and their exposure to oil. It is well managed. The dividend payout is 3.1%

Emerson Electric (EMR-N) — Stockchase

In an industrial complex, it would be comparable to a General Electric (GE-T) or something similar. Feels the whole industrial complex in that space will move higher. Not as keen on this business simply because of the emerging-market exposure it has. In different segments of their businesses, there is fairly flat to slightly negative growth.…

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3M Co. (MMM-N)
An industrial company across many sectors including consumer, industrials and materials. They bought back stocks last year but added debt. They have significant international operations who’s profitability is hurt by a strengthening US dollar. Their dividend yield is 3.4%

3M Co. (MMM-N) — Stockchase

A fantastic, huge multinational industrial. Operates in a number of specialty industrial areas, as well as some consumer products. A classic, long term growth company, but given the run, you have to be really careful. Wait for some sort of correction.

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Parker Hannifin Corp (PH-N)
A specialist in motion and control technology. A good long term play as they have a good history of generating ROI for a long time. They are a key part of the industrial economy in a relative oligopolistic environment. They pay a 2.1% dividend.

Parker Hannifin Corp (PH-N) — Stockchase

This Top pick consists of a basket of U.S. large caps, Gardner Denver (GDI-N), Corning (GLW-N) and Ingersoll-Rand (IR-N) Parker Hannifin (PH-N) and Timken (TKR-N). Infrastructure spending has lagged severely. On the corporate side, there is lots of cash on hand, debt has declined

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👨‍⚕️ Healthcare
US Stocks

Johnson & Johnson (JNJ-N)
A multinational medical, pharmaceutical and consumer goods company. They are currently facing a lawsuit over talcum powder. They have good demographic support and analysts expect dividends to continue to grow. They pay a dividend of 2.72%.

Johnson & Johnson (JNJ-N) — Stockchase

The PFE-N non-patent drugs will be dilutive for earnings in the short term. She prefers either JNJ-N or ABT-N

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💡 Utilities
Canada Stocks

Altagas Ltd (ALA-T)
An energy infrastructure company. A good place to keep your money for dividends and a quality utility name. They have settled down after their takeover although there may be other outcomes that are yet to be seen. They pay a 5% dividend.

Altagas Ltd (ALA-T) — Stockchase

They have made a lot of positive progress on the balance sheet after the US acquisition. At this point they have done what it is required to stabilize the balance sheet. She does not own it.

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