Top 10 Canadian High Yield Stocks – November 2018

Top 10 Canadian High Yield Stocks - November 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

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: 56%
  • Stock: TSE:ALA
  • Sector: Energy
  • Dividend Yield: 13.97%
  • Dividend Payout Ratio: 100.00%
  • Technical Trend:

Bonterra Energy

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: 40%
  • Stock: TSE:BNE
  • Sector: Energy
  • Dividend Yield: 11.06%
  • Dividend Payout Ratio: 342.86%
  • Technical 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: 47%
  • Stock: TSE:CHE.UN
  • Sector: Basic Materials
  • Dividend Yield: 10.22%
  • Dividend Payout Ratio: 428.57%
  • Technical Trend:

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: 51%
  • Stock: TSE:AD
  • Sector: Financial Services
  • Dividend Yield: 9.19%
  • Dividend Payout Ratio: 108.72%
  • Technical Trend: 

Gluskin Sheff + Associates

Gluskin Sheff + Associates Inc. is one of Canada’s pre-eminent wealth management firms. Founded in 1984 and serving high net worth private clients and institutional investors, we are dedicated to meeting the needs of our clients by delivering strong risk-adjusted returns together with the highest level of personalized client service.
  • Opportunity Score: 62%
  • Stock: TSE:GS
  • Sector: Financial Services
  • Dividend Yield: 9.08%
  • Dividend Payout Ratio: 80.65%
  • Technical 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: 46%
  • Stock: TSE:ESI
  • Sector: Energy
  • Dividend Yield: 9.07%
  • Dividend Payout Ratio: 100.00%
  • Technical Trend: 

Vermillion Energy

Vermillion Energy Inc. (TSE:VET) is a Calgary, Alberta based international oil and gas producer celebrating over 20 years of outstanding performance.  Vermilion adheres to a value creation strategy through the execution of full cycle exploration and production programs focused on the acquisition, exploration, development, and optimization of producing properties in North America, Europe and Australia.  Our business model targets annual organic production growth, along with providing reliable and increasing dividends to investors.
  • Opportunity Score: 53%
  • Stock: TSE:VET
  • Sector: Energy
  • Dividend Yield: 8.85%
  • Dividend Payout Ratio: 100.00%
  • Technical Trend: 

High Liner Foods

High Liner Foods is the leading North American processor and marketer of value-added frozen seafood. The retail branded products are sold throughout the United States, Canada and Mexico under the High Liner, Fisher Boy, Sea Cuisine and C. Wirthy labels, and are available in most grocery and club stores. HLF also sells branded products under the High Liner, Icelandic Seafood, and FPI labels to restaurants and institutions, and are a major supplier of private-label, value-added frozen seafood products to North American food retailers and foodservice distributors.
  • Opportunity Score: 73%
  • Stock: TSE:HLF
  • Sector: Consumer Defensive
  • Dividend Yield: 8.63%
  • Dividend Payout Ratio: 45.31%
  • Technical Trend: 

TransAlta Renewables Inc.

RNW - TransAlta RenewablesTransAlta recognizes renewable power generation as a high growth opportunity. The company has grown this segment of our business significantly during the last several years and continues to see tremendous opportunities going forward to accelerate the growth of this part of its business. Establishing an entity with scale and diversity comprised of fully contracted assets, the majority of which are renewable, will enhance the ability of both companies to compete for growth and create value for shareholders. Scale and diversification also provide investors with more stable base cash flows.
  • Opportunity Score: 68%
  • Stock: TSE:RNW
  • Sector: Utilities
  • Dividend Yield: 8.22%
  • Dividend Payout Ratio: 132.34%
  • Technical Trend: 

Dorel Industries

DII.B Dorel IndustriesDorel Industries Inc. has annual sales of US$2.6 billion and employs approximately 10,000 people in facilities located in twenty-five countries worldwide. The Company operates three distinct business segments. Each consists of several operating divisions or subsidiaries: juvenile, sports, and home.

Dorel's strength lies in the diversity, innovation and quality of its products as well as the superiority of its brands. A high level of customer satisfaction has been achieved through the location of permanent Dorel teams in close proximity to certain major accounts. Dorel maximizes cross-selling, cross-marketing, procurement and other complementary business opportunities.

  • Opportunity Score: 40%
  • Stock: TSE:DII.B
  • Sector: Consumer Cyclical
  • Dividend Yield: 8.11%
  • Dividend Payout Ratio: 100.00%
  • Technical 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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