Breaking News
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

2 Best Dividend Stocks With Yields Above 5%

Stock MarketsJul 27, 2021 12:45
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2 Best Dividend Stocks With Yields Above 5%

Dividend stocks are topics of discussion, too, in the Reddit thread. It shows that some retail traders are interested in earning recurring income streams, not only capital gains from meme stocks. Their focus is on 10 high-yield stocks recommended by Gordon Pape, the editor and publisher of the Internet Wealth Builder. Four names are established dividend payers in the energy sector.

Besides Enbridge, Pembina Pipeline, and Keyera, TC Energy (TSX:TRP)(NYSE:TRP) is tops on Pape’s list. Anglo Pacific (LON:APF) Group is the only royalty company, although the more prominent Freehold Royalties (TSX:FRU), not part of the list, should be a better buy.

Income investors should find the combination of TC Energy and Freehold Royalties attractive because the average yield is a fantastic 5.57%. There are risks involved but not as volatile as meme stocks since dividends serve as financial cushions should the stock prices drop.

Industry goliath TC Energy investors enjoy a 21.34% gain as the energy stock benefits from rising oil prices and demand in 2021. At $61.02 per share, the $59.74 billion energy infrastructure company pays an over-the-top 5.7% dividend. A $20,000 investment will produce $1,140 in passive income.

The 70-year-old company is a goliath in North America’s oil & midstream industry. TC Energy’s business segments include Canadian Natural Gas Pipelines, U.S. Natural Gas Pipelines, Mexico Natural Gas Pipelines, Liquids Pipelines, and Power & Storage.

TC Energy incurred a $1.1 billion net loss in Q1 2021 (quarter ended March 31, 2021) due to the asset impairment charge on the Keystone XL Pipeline suspension. However, its President & CEO, François Poirier, said that notwithstanding the tax-impairment charge, TC Energy is well-positioned to deliver sustainable, high-quality growth in the years ahead.

Poirier adds that TC Energy will advance its $20 billion secured capital program in 2021. Since the business models are regulated and supported by long-term service contracts, earnings and cash flows are visible. Management believes the capital projects will enable TC Energy to raise dividends by 8% to10% this year and 5% to 7% annually in the ensuing years.

Oil & gas royalty titan Freehold Royalties has a market cap of $1.16 billion compared to Anglo Pacific’s $555.05 million. At $8.79 per share, the dividend offer is 5.44%. Moreover, the royalty stock’s year-to-date gain is an incredible 72.61%. Market analysts also see a potential upside of 39.4% to $12.25 in the next 12 months.

The more than 6.7 million gross acres of land holdings make Freehold the largest oil and gas royalty company in Canada. It creates shareholder value to by pursuing oil and gas development in the properties through lease-out programs. Management acquires high-quality assets with acceptable risk profiles and long economic life only.

With the energy sector on the road to recovery, Freehold’s revenue in Q1 2021 (three months ended March 31, 2021) soared 40% to $36.74 million versus Q1 2020. The quarter’s highlight was the $5.63 million net income compared to the $9.02 million net loss in the same period last year.

Freehold is confident that it will meet its 2021 production guidance, between 10,500 and 11,000 barrels of oil equivalent per day (boe/d). The recent royalty acquisitions in the U.S. should contribute an additional 1,335 boe/d to the average production this year.

Less volatile Reddit traders are better off investing in the Toronto Stock Exchange’s best dividend stocks. They are less volatile than meme stocks and produce recurring income streams.

The post 2 Best Dividend Stocks With Yields Above 5% appeared first on The Motley Fool Canada.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends FREEHOLD ROYALTIES LTD., KEYERA CORP, and PEMBINA PIPELINE CORPORATION.

This Article Was First Published on The Motley Fool

2 Best Dividend Stocks With Yields Above 5%
 

Related Articles

Oils, Gannett, Rise in Premarket; Facebook Falls
Oils, Gannett, Rise in Premarket; Facebook Falls By Investing.com - Sep 27, 2021

By Geoffrey Smith  Investing.com -- Stocks in focus in premarket trading in New York on Monday, 27th September. Please refresh for updates. Facebook (NASDAQ:FB) stock fell 0.9%...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email