Diversification isn’t just about industries, it’s also about currencies and geography. Spreading out investments to other territories could give your portfolio an added dose of security or the potential for higher returns.
For regular American investors, the easiest and most accessible foreign market is probably Canada. Our northern neighbour has a rich and diverse stock market, a sturdy economy and a currency that’s closely linked in the US-Canada trade balance. So, if you’re looking for a quick fix for diversification but don’t want to venture too far afield, it might help to ask yourself what are dividend stocks canada offers?
Here’s a list of the seven best dividend paying stocks we could find across the northern border:
Dividend Yield: 6.6%
A well rounded energy company with a network that spans North America, Altagas has a unique business model. Instead of producing the energy and taking on risks, they develop the infrastructure and get paid on contract by energy companies. They’ve recently moved to renewables energy as well, so if you visit their site you’ll see pictures of windmills and solar farms instead of natural gas pipelines.
The business qualifies as a mid-stream service with fantastic profitability. The industry is hard to get into and the demand is fairly consistent once a company establishes itself the way Altagas has managed to do. The company is also part of the Canadian Dividend Aristocrats Index.
Genworth MI Canada Inc (
Dividend yield: 5.7%
Worth nearly $3.4 billion, this is Canada’s largest mortgage insurer. Mortgage insurers do exactly what the name suggests, they offer insurance against losses for companies, banks and investors who offer mortgages.
Since the stock listed on the Toronto exchange, it has paid a consistent and growing dividend every quarter. Book value and net operating income have steadily grown alongside Canada’s property market.
Dividend yield: 4.7%
One of the five largest banks in Canada, Canadian Imperial Bank of Commerce employs more than 44,400 people across the world and generated C$13.4 billion in revenue.
CIBC is one of the best stocks on the Canadian Dividend Aristocrats Index. Banks in Canada have been relatively stable and are considered highly secure. There are some concerns about the level of consumer borrowing and home mortgages in Canada, but some experts seem to believe these worries are overblown. Afterall, Canada seems to be a banking crisis avoiding ninja.
So, CIBC may be a good bet for someone looking to buy the Canadian financial sector near the bottom.
Brookfield Renewable Partners L.P.
Dividend yield: 5.9%
Brookfield is a limited partnership listed in Toronto that owns and operates over 250 power facilities across the world. The firm has a combined 10,000 MW of installed capacity. 61% of the company is owned by Brookfield Asset Management, which has another similar listed partnership for real estate assets on this list.
In short, the stock is a dividend machine. As shown below, a majority of the company’s revenues come from hydroelectricity generation and two-thirds of sales originated in North America.
Source: Brookfield Annual Report 2016
Enbridge Income Fund Holdings Inc.
Dividend yield: 4%
Enbridge Income Fund currently yield double the amount its parent company pays out every year. It’s considered a better buy for this reason.
Based in Calgary, Canada, this is another one of Canada’s high yield energy infrastructure owners. The fund owns and operates a broad range of energy assets in the green power generation; liquids transportation and storage; and natural gas transmission sectors.
Inter Pipeline Ltd.
Dividend yield: 5.85%
Inter Pipeline transports, stores and extracts natural gas. The company is another energy infrastructure holding company based in Calgary, Canada.
Although the current yield looks impressive, last year the dividend yield was a jaw-dropping 7%.
Brookfield Property Partners L.P.
Dividend yield: 5.52%
Another Brookfield Asset Management partnership that’s listed in Toronto. The firm holds assets worth $78 billion across North America, Europe and Australia.
Dividends and price appreciation has been fairly stable over the past five years. This is an experienced and professional asset management company with a proven track record. Brookfield expects a 12% to 15% return on equity along with dividend growth of 5% to 8% every year. So far, it has managed to live up to expectations. Considering how well diversified the portfolio is, both across types of property and regions, it’s hard to see what could get in the way of this dividend creating juggernaut.
To Sum Up
What are dividend stocks canada has to offer? Think energy infrastructure, banking, and real estate.
You’ll notice a lot of Canada’s profits lie in its energy sector. Oil and natural gas can be volatile and most companies that operate in this sector realize that. However, the consistent dividend payers on this list manage property or infrastructure for energy companies which is far less risky.
Stable cash flows and long-term market visibility allow these companies to keep creating wealth for shareholders. If you’ve ever considered diversifying and wondered what are dividend stocks canada, take a pick from this list to add to your portfolio.