Thursday , 27 June 2019


+5% Dividend Stocks – Here Are 5 Of the Best

“…Finding solid companies paying high yields is a very difficult task but I excel at that task and present here 5 blue chip stocks that have dividend yields in excess of 5%…”

By Lorimer Wilson, editor of munKNEE.com – Your KEY To Making Money! 

[This article of edited excerpts* (832 words) from the original article (1179 words) by DivGuy provides you with a 29% FASTER – and EASIER – read.  Please note: This complete paragraph, and a link back to the original article, must be included in any article re-posting to avoid copyright infringement.]

“1. Inter Pipeline (IPL.TO)

Inter Pipeline Ltd. is an energy infrastructure business engaged in the transportation, processing, and storage of energy products across western Canada and Europe…The company operates 4 distinct business segments:

  1. Oil Sands Transportation, consisting of three pipeline systems;
  2. NGL Processing, including both natural gas and off-gas processing facilities;
  3. Conventional Oil Pipelines, consisting of 3,900 km of pipeline across three systems;
  4. and Bulk Liquid Storage.

(Click on image to enlarge)

Inter Pipeline (IPL.TO)

Source: IPL Q3 2018 fact sheet

IPL stock has been down most of 2018. This is the case with many pipeline companies. However, you can see that it’s a “sector thing” as IPL just closed a record year with double-digit FFO increase for the year. Management increased its dividend significantly and still shows an FFO payout ratio well under control.

2. Polaris Infrastructure (PIF.TO)

Polaris Infrastructure Inc. is a renewable energy company…engaged in the operation, acquisition, and development of renewable energy projects in Latin America…

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Polaris Infrastructure (PIF.TO)

Source: PIF October presentation

The investment thesis around Polaris Infrastructure is a risky play that it could pay off a lot.

  • While management has proven its ability to increase its revenue and cash flow consistently since 2014, the stock plunged severely in 2018. This all happened because of the violence in Nicaragua.
  • PIF shows a solid contract and great execution providing increasing cash flow and allowing management to pay off debts.
  • Geothermal energy is part of the future for many countries, and it is a reliable & green source of power. Unfortunately, political instability gathers all the attention. If you are willing to take the bet, PIF could definitely make you richer.
  • While there is a problem with the current president, Nicaragua shows the strongest GDP growth in Central America.
  • Now that the company has found another growth vector in Peru. We think PIF will be a solid investment in the Utility sector.

3. Enbridge (ENB.TO)

Enbridge owns and operate an impressive network of liquid (OIL) and natural gas pipelines…

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Enbridge (ENB.TO)

Source: ENB Q3 2018 presentation

  • ENB shows about 96% of its business done through “take-or-pay” contracts. The pipeline is like a toll on a highway; people pay for each use and the company piles-up the cash…
  • Enbridge clients enter into 20-25-year transportation contracts. The company is already well positioned to benefit from the Canadian oil sands (as its Mainline covers 70% of Canada’s pipeline network).
  • Now that is has merged with Spectra, about a third of its business model will come from natural gas transportation.
  • The company has a handful of projects on the table or in development…[including] the Line 3 replacement…[which it] expects to be completed…in mid-2019.

4. Emera (EMA.TO)

Emera is an energy and service company…[with its] main market is Nova Scotia where it owns Nova Scotia Power, the province’s main electricity provider. Emera owns power plants and distributes natural gas in Canada, the USA and the Caribbean. This utility employs over 7,000 workers and serves more than 2.5 million customers. Tampa Electric (41%), NSPI (14%) and Maritime Link (11%) generate most of EMA’s earnings.

Emera (EMA.TO)

Source: EMA Q3 2018 investors presentation 

  • Emera has been increasing its dividend payment each year for over a decade now. With the purchase of TECO energy, management intends to continue its tradition. The company forecasts a 4-5% dividend growth rate throughout 2020 while targeting a payout ratio of 70-75% (Emera Investors Presentation). At 5%+ dividend yield, this is a keeper for several years.
  • Emera…counts on several “green projects” with hydroelectricity and solar plants. This decreases the risk of future regulations affecting its business as the world is slowly moving toward greener energy.

5. BCE (BCE.TO)

BCE is the largest Canadian telecom by market cap, about twice the size of Telus. It shows the most balanced business model among this small group…

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BCE (BCE.TO)

Source: BCE investors fact sheet

  • BCE has shown a very solid dividend profile for several years and my analysis proves it will continue to rise in the future. All BCE services are based on some sort of monthly subscription generating a consistent base for cash flow.
  • BCE debt level is not [to] be underestimated. BCE is a giant… with a giant’s debt. This is not a perfect situation as interest rates are now rising and, as the Canadian Government keeps pushing for more competition in the wireless industry, BCE may see additional competitors adding more pressure on margins in the future.
  • When you have the opportunity to invest in a strong yielder like BCE, and still hope for a small stock appreciation growth, you must take a hold of it. BCE shows a well-diversified business model and will continue to generate strong cash flow in the future.
  • The company is a real money printing machine. As BCE is part of an oligopoly (Telus, Rogers and BCE controls about 90% of wireless market), there is limited competition and high barriers to entry. Since BCE offers a wide array of products, it can increase revenue generated by each customer…”
(*The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.)

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