Looking for Yield!
I've narrowed my list of high yielding stocks to the following, any holders?
I'm looking for a good option to park extra cash in my non-registered cash (CAD) account. These all have attractive yields, but seem almost too good to be true. Any insight would be greatly appreciated.
Ag Growth International (7.3% yield)
Chemtrade Logistics Income Fund (7.7% yield)
Student Transportation (7.7% yield)
Atlantic Power (8.4% yield)
Bonavista Energy (8.7% yield)
Freehold Royalties (8.8% yield)
Just Energy (11.3% yield)
I don't own any of these. Chemtrade seems to be the best of the bunch, but as it is an income fund it does pay non-eligible dividends. I would avoid AG, Student and Atlantic as I have looked into those and they all have dividend payout ratios higher than net earnings.
Own Chemtrade and like it.
STB has a short seller passing rumours that the yield isn't sustainable. I'm not sure one way or the other, need to look into it more.
ATP had to pay 9% to get a bond issue out last year, which is a red flag to me. Might be fine going forward.
The other three are exposed to commodity price risk AFAIK, and I don't know enough about ag growth to comment.
I really only like Chemtrade Logistics off of the group you listed.
Bonavista should do okay but is a bit more risky.
I'd suggest you avoid STB, ATP and JE.
I don't know all that much about Ag Growth or Freehold Royalties.
Always make sure that a yield is sustainable (for most non-utilities, payout ratio < 60% is advisable). If a yield gets too high in a certain business it is usually a sign the market doesn't believe it is sustainable and that a dividend cut is right around the corner.
I've owned Chemtrade for a while and like that one.
I have owned STB and got out of it. The reason I got out of it is for pretty much the reasons listed by the short seller. The are just sustaining the yield by issuing more shares and more debt.
I have owned Bonavista but there is talk of them cutting the dividend in the near term. They are more weighted toward natural gas and there is a lot of price pressure there.
I do own Just Energy but thinking of getting out of it. The yield is nice and they have committed to paying it after a recent report but i'm unsure. The results are out on the 9th so I may make my decision then. I'm slightly down with it but factoring in the yield I would be about even if I sold today.
If you are looking for yield there are other options out there. For example Chesswood group. They are a small company but released an excellent set of results earlier today. Over 8% yield.
What's your goal? If you want income you should know that removing 8% from the markets is likely unsustainable for long term income. If you want growth then yield should play a minor consideration. If you want protection of your cash, you should be out of stocks and into short bonds or GICS. It sound like you want to protect your cash short term but don't want to make <2%.. If you INSIST on using stocks, at least pick something ultra stable like P&G (for example).
I would recommend 'the little book of big dividends'. It had a pretty good chapter regarding dividend payers with higher yields.
Do you guys put Chemtrade in your TFSA?
Thanks for the feedback everyone!!
Doctrine, by non-eligible dividends, you mean they won't qualify for the dividend tax credit? Are all "income funds" like this?
Originally Posted by doctrine
Yes, I saw you put up a post about them a couple days ago. I'll certainly look into them some more. Any other good yield options that I'm missing?
Originally Posted by liquidfinance
Peterk, what do you mean by removing 8% from the markets? I'm looking for a good investment option that is better than GICS. Both my TFSA and RRSP are maxed out at the moment, so I figured I would invest some money in high yielding stocks, in order to take advantage of the dividend tax credit. But perhaps it would be better to look at growth options, and then move this money into a registered account once I have more room? I'm unsure on how to continue at this point. What do you guys do once your TFSA and RRSP are maxed out?
Originally Posted by peterk
stick with companies over a billion market cap paying 4-6% dividends... playing 8%+ dividend stocks you need lots of experience with the market, good timing and most important nerves of steel...