Top 10 Canadian High Yield Stocks – July 2018

Top 10 Canadian High Yield Stocks - July 2018

Are you looking for income with high yield stocks? While the highest yield isn’t always the best investment, it’s a good place to start looking for income.

Based on stock prices which can move up or down depending on company news and performance, the list will change. As such, the opportunities will vary every month and that’s why it’s important to have a systematic approach to understanding which high yield stocks are an opportunity.

An opportunity can be for a stock you already own or simply for a new addition to your portfolio. It is important to note that the rankings below do not assess the viability of the business.

Top 10 Canadian High Yield Dividend Stocks

This month’s results are a snapshot in time at the time of writing and many factors could change the rankings. It’s important to be aware that a high yield stock can either be a good income source or a warning sign for the dividend. Do look further into their payout strategy and history before committing to a high yield stock to avoid unnecessary risks on your portfolio.

Get your list of STRONG Dividend Growth Stocks
DISCLOSURE: Please note that links to merchants mentioned within this post might be using an affiliate link. Using an affiliate link means that, at zero cost to you, I might earn a commission if you buy something through that affiliate link.

Alaris Royalty Corp

AD - Alaris RoyaltyAlaris Royalty Corp is a Canadian company based in Calgary, Alberta. We provide cash financing to private businesses across North America using an innovative structure which fills a niche in the private capital markets. This niche is: providing capital to successful businesses, which are in need of This niche is: providing capital to successful businesses, which are in need of capital but are unwilling to compromise the current state of their equity ownership and operational control of the business. Alaris provides capital to well-run, profitable private companies in exchange for a monthly cash distribution on our new preferred equity position. These distributions to Alaris are based on the yield on the original contribution, set 12 months in advance and adjusted annually based on the year over year percentage change in a “top-line” performance metric such as net sales, gross profit or same location sales. Alaris creates long-term partnerships with companies that have a proven track record of stability and profitability in varying economic conditions.

  • Opportunity Score: 43%
  • Stock: TSE:AD
  • Sector: Financial Services
  • Dividend Yield: 9.96%
  • Dividend Payout Ratio: 100.00%
  • Technical Trend: Market Trend

Ensign Energy Services

ESI - Ensign Energy ServicesEnsign Energy Services is a global enterprise that provides a unique edge in oilfield service. We are defined by our inspired thinking; our innovative use of technology; our confident, dedicated, well-trained workforce; and our culture of achievement. We are built to serve. We deliver a superior customer experience and trusted, reliable performance.

We are among the world’s strongest, fastest-growing energy services companies. Ensign is equipped with industry leading technology and empowered by a culture of innovation and action. Our employees across the globe are united in a commitment to service. We are able to deliver safety and excellence to our customers where they need us, when they need us.

  • Opportunity Score: 45%
  • Stock: TSE:ESI
  • Sector: Energy
  • Dividend Yield: 8.38%
  • Dividend Payout Ratio: 100.00%
  • Technical Trend: Market Trend

AltaGas

ALA - AltaGasAltaGas is a North American diversified energy infrastructure business with a focus on owning and operating assets to provide clean and affordable energy to its customers. AltaGas' business strategy is underpinned by strong growth in natural gas supply and the growing demand for clean energy. More than 1,600 employees across North America are focused on executing AltaGas’ strategy through three business segments: gas, power, and utilities.

  • Opportunity Score: 31%
  • Stock: TSE:ALA
  • Sector: Energy
  • Dividend Yield: 7.86%
  • Dividend Payout Ratio: 3128.57%
  • Technical Trend: Market Trend

Chemtrade Logistic

CHE.UN - Chemtrade LogisticsChemtrade operates a diversified business providing industrial chemicals and services to customers in North America and around the world. Chemtrade is one of North America’s largest suppliers of sulfuric acid, spent acid processing services, inorganic coagulants for water treatment, sodium chlorate, sodium nitrite, sodium hydrosulfite and phosphorus pentasulfide. Chemtrade is a leading regional supplier of sulfur, chlor-alkali products, liquid sulfur dioxide, potassium chloride, and zinc oxide.
  • Opportunity Score: 61%
  • Stock: TSE:CHE.UN
  • Sector: Basic Materials
  • Dividend Yield: 7.75%
  • Dividend Payout Ratio: 142.86%
  • Technical Trend: Market Trend

Gibson Energy Inc

GEI - Gibson EnergyGibson Energy is an integrated midstream company headquartered in Calgary, Alberta. Gibson Energy provides midstream energy infrastructure and logistics services to customers across North America. With an enviable footprint in Canada’s energy hubs, the company has nearly 12 million barrels of storage capacity along with a North American network to move, blend, process, market and distribute crude oil, liquids and refined products.

Ultimately, their storage facilities, along with our processing plants, transportation network, marketing capabilities and related energy services, connect people with the energy they need to fuel their modern lives.

  • Opportunity Score: 58%
  • Stock: TSE:GEI
  • Sector: Energy
  • Dividend Yield: 7.56%
  • Dividend Payout Ratio: 100.00%
  • Technical Trend: Market Trend

Exchange Income Fund

EIC - Exchange Income CorporationExchange Income Fund is a diversified, acquisition-oriented corporation focused on opportunities in two sectors: aviation services and equipment, and manufacturing. The business plan of the EIF is to invest in profitable, well-established companies with strong cash flows operating in niche markets.

  • Opportunity Score: 66%
  • Stock: TSE:EIF
  • Sector: Industrial
  • Dividend Yield: 6.77%
  • Dividend Payout Ratio: 95.63%
  • Technical Trend: Market Trend

Enbridge Income Fund

ENF - Enbridge Income FundWhen Enbridge Income Fund was formed in 2003, their objective was to create the lowest-risk, high payout energy infrastructure investment in the energy sector. The value proposition to investors is based on the following four key elements.

  • A Low-risk Business Model
  • Diversified Asset Base
  • High Payout of Predictable Cash Flows
  • Strong Sponsorship

ENF has the necessary financial flexibility and access to capital markets to execute our growth strategy. This successful business model provides long-term stability and gives us confidence that we’ll continue to deliver reliable and attractive returns to our investors both today and well into the future.

  • Opportunity Score: 37%
  • Stock: TSE:ENF
  • Sector: Energy
  • Dividend Yield: 7.02%
  • Dividend Payout Ratio: 426.34%
  • Technical Trend: Market Trend

Chorus Aviation

Chorus Aviation - SmallChorus Aviation Inc is a Canadian holding company. Headquartered in Halifax, Nova Scotia, Chorus has various aviation interests and is the parent company of Jazz Aviation LP, Voyageur Aviation Corp. and Chorus Aviation Capital Corp.
  • Opportunity Score: 66%
  • Stock: TSE:CHR
  • Sector: Industrials
  • Dividend Yield: 6.50%
  • Dividend Payout Ratio: 42.11%
  • Technical Trend: Market Trend

Extendicare

EXE - ExtendicareFor more than 45 years, Extendicare has developed a reputation for providing quality, clinically based services in a cost-effective manner. The hallmarks of Extendicare’s philosophy are dignity and respect, which guide its interactions with residents, clients and their families, as well as with staff and business partners. Extendicare’s goal is to be the provider of choice in every community where it operates and we are committed to providing quality care and services – ensuring we continue to look after the best interests of residents, home care clients, employees, and the company as a whole. Through a network of 118 owned and operated health care centers, as well as a home health care operations, Extendicare is committed to delivering care to meet the needs of a growing seniors’ population in Canada. The qualified and highly trained workforce of 23,700 individuals is dedicated to helping people live better through a commitment to quality service.
  • Opportunity Score: 34%
  • Stock: TSE:EXE
  • Sector: Real Estate
  • Dividend Yield: 6.68%
  • Dividend Payout Ratio: 100.00%
  • Technical Trend: Market Trend

Inter Pipeline Ltd

IPL - InterPipelineInter Pipeline is a major petroleum transportation, storage and natural gas liquids processing business based in Calgary, Alberta, Canada. IPL owns and operates four business segments operating in western Canada and Europe. Our pipeline systems span over 7,700 kilometers in length and transport approximately 1.3 million barrels per day (b/d). In Europe, IPL operates 16 strategically located petroleum and petrochemical storage terminals that have a combined storage capacity of approximately 27 million barrels. Their NGL business is one of the largest in Canada, processing an average of 3 bcf/d in 2016, with the capacity to produce over 240,000 b/d of NGL.

  • Opportunity Score: 71%
  • Stock: TSE:IPL
  • Sector: Energy
  • Dividend Yield: 6.90%
  • Dividend Payout Ratio: 120.00%
  • Technical Trend: Market Trend
Get your list of STRONG Dividend Growth Stocks

Methodology

The top 10 high yield stocks identified are based on the highest yield of dividend stocks excluding REITs within the Canadian Dividend Performance List covering over 120 of the top Canadian stocks. For a REIT list, se the Canadian REIT list.

Please note that generating income with a high yield is a great short-term reward but it’s not without risks. Either a dividend cut is imminent or growth is limited. Make sure you look for the right stock for your portfolio and that you really understand the business you are investing in. I like to look at the Chowder Score to assess growth for both the stock appreciation and the dividend.

If you are interested in more details, the Canadian Dividend Performance List provides many more data points to help make your investment decision.

DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.

DISCLAIMER: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your investment decisions at your own risk – see my full disclaimer for more details.
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