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
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%
(A Top Pick Nov 03/21, Down 11%) Tough. He sold, recognizing peak of earnings cycle had come and gone. The cycle for this industry is wild.
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%
(A Top Pick Feb 03/21, Up 160%) Not bullish on energy prices. Cautious on the name. Darling amongst energy stocks with excellent dividend yield. Very strong management.
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%
Two years ago was adding energy. Believes new cycle is starting, so not constructive on energy. Energy gains have already been prices. Geopolitical conflict will end (oil prices will fall).
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%
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Collapse in oil prices pushed investors away. Payout ratio has sufficient cushion. Margins improving over the years. Upside potential in an economic recovery.
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%
CM vs. BNS Both have underperformed over the last year. CM is down 16%, BNS down 18%. RY is the only bank up YTD. Any contrarian would say buy. Over the last 5 years, both are at the bottom of the pack. If you like Latin America and the new CEO, pick BNS. If you…
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%.
BNS vs. CM Both have underperformed over the last year. CM is down 16%, BNS down 18%. RY is the only bank up YTD. Any contrarian would say buy. Over the last 5 years, both are at the bottom of the pack. If you like Latin America and the new CEO, pick BNS. If you…
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.
High quality, a Canadian industrial champion. International. Issues from supply chains and microchips. Attractive multiple. High ROE, good management and balance sheet. Nice dividend yield. Good buy here for a long-term hold.
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%
options They bought 3,000 October calls at the $80 strike with shares trading at $77.50. He bought and will upside calls against them as it rallies.
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%.
Cars are aging on the road and need new parts and servicing. A great chart that makes a new 52-week high every day.
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%.
Is up 13% for the past year. They make Spam, Planter's Peanuts and other packaged food, an industry that has held up better than the market. Hormel just released its quarter and it was mixed: 51 cents EPS vs. expected 50 cents, lower than expected sales which worries him, a weak 2023 forecast because of…
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%.
We have to look ahead to where the economy will be in 6-12 months. Inflation will ease, and banks can become more dovish. Time to underweight consumer staples. Held up decently, down only 12%. Practicing "shrinkflation". He's neutral. 24 PE, 5-6% growth rate, so it's not cheap. Yield is 2.95%.
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%.
Couldn't get traction in Canada, pulling out. US side is in great shape. Margins have expanded. Doing better than HD. Yield is 2.24%. (Analysts’ price target is $237.88)
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%.
Price matters. He sold P&G on valuation slowing topline growth and weaker free cash flow. Most of their sales are overseas and the stronger USD will impact profits. Some consumers are shifting to lower-priced items, too.
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%.
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Less known co. with good valuation. Offers exposure to USA. Customer concentration risks. LT value creator, economically sensitive.
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%.
(A Top Pick Feb 03/21, Up 58%) Continues to like the name. Fits peanut butter & chocolate play (intersection of industrial and materials business). Will continue to hold.
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%
It got better today by selling one of its businesses, garbage disposals, to Whirlpool. Though EMR shares declined today, it will be good long term.
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 Company is a diversified corporation manufacturing a wide range of products, including abrasives, adhesive tape and related products, and consumer-electronics components. It is headquartered in St. Paul, Minnesota. 3M apply science in collaborative ways to improve lives daily. With $32 billion in sales, 96,000 employees connect with customers all around the world. Social media…
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.
Nice correction back to EBV 5 at $269.80. If we got back to that level, he'd be a buyer. If the S&P rallies, so will this. Model price of $297.22, only 4% upside. Highest quality industrial out there.
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%.
Stockchase Research Editor: Michael O'Reilly JNJ is a defensive holding that is trading below peer valuation (23x earnings vs 36x for peers). The company is preparing to spin off its consumer division in favour of more investment into its pharmaceutical and medical device divisions. It is reportedly making progress on a ground breaking ulcerative colitis…
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.
They own one of the largest positions. It has two businesses. One part is a utility company, with gas distribution is the U.S. growing well along with good rate increases. It is also a midstream business with pipeline projects including energy infrastructure, a high growth area. It is a really safe stock to own and…