Top 10 Canadian High Yield Stocks – January 2018

Top Canadian High Yield Stocks

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 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.

Corus Entertainment

CRJ.B - CorusCorus is a leading media and content company that creates and delivers high quality brands and content for audiences around the world. Founded in 1999 by JR Shaw, the company was built from media assets originally owned by Shaw Communications. Since its inception, Corus' asset base has continued to grow through strategic acquisitions and a strong operating discipline. On April 1, 2016 the company acquired Shaw Media's powerful portfolio of television brands.
  • Opportunity Score: 62%
  • Stock: TSE:CJR.B
  • Sector: Consumer Cyclical
  • Dividend Yield: 10.33%
  • Dividend Payout Ratio: 118.75%
  • Technical Trend: Market Trend

Canoe EIT Income Fund

EIT.UN - Canoe FinancialsOne of Canada’s largest closed-end investment funds, designed to maximize monthly distributions and capital appreciation by investing in a broadly diversified portfolio of high quality securities.

Founded in 2008, Canoe Financial LP established operations with the acquisition of management of the publicly traded $1.2 billion Canoe EIT Income Fund.  Canoe now manages approximately $4.6 billion in assets across a diversified range of open end mutual funds, and private energy equity products.

Canoe has expanded from its Calgary head office to across Canada, including a significant presence in Toronto and offices in Vancouver, Winnipeg, Ottawa and Montreal.  Since launching its first mutual funds in February 2011, Canoe has grown its mutual fund assets to more than $2.8 billion, making it one of the fastest growing entities in the Canadian mutual fund industry.

  • Opportunity Score: 47%
  • Stock: TSE:EIT.UN
  • Sector: Financial Services
  • Dividend Yield: 10.07%
  • Dividend Payout Ratio: 83.92%
  • Technical Trend: Market Trend

Alaris Royalty Corp

Alaris 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 ofThis 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: 38%
  • Stock: TSE:AD
  • Sector: Financial Services
  • Dividend Yield: 8.03%
  • Dividend Payout Ratio: 270.00%
  • Technical Trend: Market Trend

Bonterra Energy Corp.

BNE - Bonterra EnergyBonterra Energy Corp. is a high-yield, dividend paying oil and gas company headquartered in Calgary, Alberta, Canada with a proven history of creating growth and long-term value for shareholders on a per share basis. Bonterra has paid a monthly dividend (distribution) since inception and targets paying approximately 50 to 65 percent of funds flow to investors. Bonterra’s successful performance is due to its experienced management team, conservative capital structure and sustainable pace of development.The company’s asset base consists of concentrated, stable and underdeveloped properties located across western Canada with large amounts of remaining oil still in place, a long reserve life and low-risk drilling locations. Bonterra is one of the leading operators in the Pembina Cardium, the largest reservoir in Canada and the company’s operations are currently focused on creating value through the execution of its Cardium horizontal drill program and efficient operating practices.
  • Opportunity Score: 46%
  • Stock: TSE:BNE
  • Sector: Energy
  • Dividend Yield: 7.95%
  • Dividend Payout Ratio: 100.00%
  • Technical Trend: Market Trend

Capital Power Corporation

Capital Power is a growth-oriented North American power producer headquartered in Edmonton, Alberta. The company develops, acquires, operates and optimizes power generation from a variety of energy sources.

Capital Power owns approximately 4,500 megawatts of power generation capacity at 24 facilities and is pursuing contracted generation capacity throughout North America.

  • Opportunity Score: 78%
  • Stock: TSE:CPX
  • Sector: Utilities
  • Dividend Yield: 6.97%
  • Dividend Payout Ratio: 109.15%
  • Technical Trend: Market Trend

Enbridge Income Fund

When 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: 79%
  • Stock: TSE:ENF
  • Sector: Energy
  • Dividend Yield: 6.96%
  • Dividend Payout Ratio: 97.31%
  • 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: 42%
  • Stock: TSE:GEI
  • Sector: Energy
  • Dividend Yield: 7.12%
  • Dividend Payout Ratio: 100.00%
  • Technical Trend: Market Trend

First National Financial Corporation

Over the last 25 plus years, First National has grown to become a recognized and respected leader in real estate financing. On both the residential and commercial sides of our business, FN has grown and evolved, yet have maintained true to their values – trust, honesty, transparency, delivery, ingenuity, responsiveness and partnership.Their mortgage specialists have earned a reputation for delivering exceptional service underscored by unparalleled knowledge. That reputation is a collective one. It’s not one individual or even a group of individuals standing out from the crowd. Going beyond service is ingrained in how they do business, in how they operate, in how they innovate and in how they deliver.
  • Opportunity Score: 67%
  • Stock: TSE:FN
  • Sector: Financial Services
  • Dividend Yield: 6.48%
  • Dividend Payout Ratio: 48.05%
  • Technical Trend: Market Trend

Inter Pipeline Ltd

Inter 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: 69%
  • Stock: TSE:IPL
  • Sector: Energy
  • Dividend Yield: 6.44%
  • Dividend Payout Ratio: 121.74%
  • Technical Trend: Market Trend

Ensign Energy Services

Ensign 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: 46%
  • Stock: TSE:ESI
  • Sector: Energy
  • Dividend Yield: 6.35%
  • Dividend Payout Ratio: 100.00%
  • Technical Trend: Market Trend

Exchange Income Fund

Exchange 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: 6.12%
  • Dividend Payout Ratio: 101.94%
  • 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.

Image courtesy of David Castillo Dominici - FreeDigitalPhotos.net