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 Apr 27/23, Up 1.2%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with MX is stalling. To remain disciplined, we recommend trailing up the stop (from $51) to $55 at this time.
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%
Checks all the boxes. Most widely owned name in Canada. Has done phenomenally well. Fair multiple is 7x, yet trades at 6.5x. Sees only 9% upside, not enough in such a volatile sector. He sold in early November.
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%
Likes it a lot, its upstream, midstream and downstream operations. They enjoy very long-life reserves in the Oil Sands. The dividend is quite good and it well managed. Seasonal strength happens in December-January, so buy on weakness, and hold long term.
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%
(A Top Pick Sep 22/22, Down 4%) Plans to increase dividend a bright spot for investors. North America's largest natural gas utility. As interest rates fall, stock price should rise. High value assets as difficult to build new ones. Low risk business model. Scored 8/10 fundamentally. Will continue to own shares. Expecting $38 share price.
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%
All banks are down 25-30%. CIBC is most exposed to housing mortgages. Banks pay a high yield, 7.1% by CIBC, which is huge for banks. Worries are a recession or housing weakness. But the Canadian banks enjoy an oligopoly. Canadian banks are okay short-term as they enter seasonality now.
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%.
Reported today and the street was disappointed by their earnings, because BNS had bigger than expected loan-loss provisions. We're entering a credit cycle that will last up to 6 quarters where lending will slow down. BNS is the only bank he owns. The CEO has been cutting costs and he's confident in him. 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.
Does not own shares. Volatile stock. Scores 8/10 fundamentally. Would hold of already own. Not a good time to invest otherwise.
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%.
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%.
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%.
This trend accounted for KO's price drop to $52.89 in early October, but it's noteworthy that shares recovered quickly even as the wider S&P continued to slide. Entering December, KO shares have climbed $6 from that low, sandwiched between their 50- and 200-day moving averages. Further, its PE of 23.38x trades below its five-year average…
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%.
(A Top Pick Nov 08/22, Up 8%) Has since sold shares. Waiting for shares to fall before buying again. Concerns over consumer spending a point of worry. If recession occurs, will impact consumers first. Overall, a strong business, so will buy again at another time.
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%.
Wonderful brand names. He's been reducing client holdings, based on results. Raising prices along with inflation, but volume numbers are actually negative. Higher prices are not sustainable. He wants both price and volume increases.
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%.
It's been stuck in consolidation for 3 years, failing to break above $110 a few times. If it falls back to $100, it could be worth a trade. Otherwise, he's cool towards it.
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 reports next week. Happy that it topped $100. But a lot of industrials are lagging because of fears over an economic slowdown. This remains a core holding for him.
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%
Would not recommend buying at this time. Involvement in lawsuits a concern for investors. Unsure on liabilities associated in lawsuits. Wait to see outcome. Strong R&D pipeline, so could be investment grade in the future, but not right now. Dividend yield reflecting risky nature of business.
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.
Industrials have not performed, but it's the best of the lot. Stay long if you own it. If it falls during the debt-ceiling talks, then buy more.
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%.
Has long owned this. Got upgraded today. Pays a 3% dividend yield and trades at 15x forward PE. Healthcare will improve in 2024.
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.
Balance sheet very strong. Seeing growth in utilities. Lots of low capital/high return mid stream opportunities. Recent acquisition of Pipestone from Tidewater. Currently trading at historically good valuation. Growing dividend that is reliable. Has commodity tailwinds. Interest rates leveling out.