3 High-Yield Stocks to Consider for 2019
The Motley Fool
Published Nov 14, 2018 16:00
Updated Nov 14, 2018 16:15
Dividend stocks are starting to recover after a dismal 2018, and the rally could continue into next year.
Let’s take a look at three companies that deserve to be on your income stock radar right now and might be interesting picks for your dividend portfolio in 2019.
Inter Pipeline Ltd. (TSX:IPL) IPL is a midstream player in the Canadian energy patch with conventional oil pipelines, oil sands pipelines, and natural gas liquids (NGL) extraction assets. The company also owns a growing storage business in Europe.
A $3.5 billion polypropylene development is currently underway and is scheduled for completion in late 2021. Once the facility goes into service, IPL expects to see additional annual EBITDA of $450-500 million.
The company reported record Q3 2018 results, with funds from operations rising 11% year over year to $300 million.
The quarterly payout ratio was 55%, so there is ample room for dividend hikes, even as the company works through its large development project. The current monthly payout of $0.14 per share provides a yield of 7.5%.
The stock recently bounced from $21 to $23 per share. A year ago the shares traded for more than $26, so more upside could be on the way.
Fortis (TSX:FTS)(NYSE:FTS) Fortis is one of those stocks you can simply buy and set aside for a couple of decades.
The company operates utility assets in Canada, the United States, and the Caribbean. Most of the revenue comes from regulated businesses, so the cash flow is reasonably predictable.
Fortis grows through strategic acquisitions and organic developments. The company’s current five-year capital program is up to $17.3 billion and is expected to significantly boost the rate base. As a result, management is forecasting annual dividend growth of at least 6% through 2023.
The stock is up from $41 to $46.50 in the past month, but is still below the 52-week high near $49. The current dividend provides a yield of 3.9%.
Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) CIBC has a track record of making some big blunders, and that’s part of the reason investors are not willing to give it the same multiple as its peers. However, management has worked hard to make the company a safer bet, and the market might not be giving the stock the credit it deserves.
Get The App
CIBC is very profitable, and the addition of a large U.S. business through a major acquisition last year should provide balance to the revenue stream and positions the company for additional growth south of the border.
The stock is up from $112 to $114 per share in the past couple of weeks, but could extend the run back to the September high above $124. The dividend should be safe and currently provides a yield of 4.8%.
The bottom line IPL, Fortis, and CIBC appear attractively priced and have solid growth potential in the coming years. If you have some cash sitting on the sidelines, it might be worthwhile to start a small position in these three stocks.
Fool contributor Andrew Walker has no position in any stock mentioned.
This Article Was First Published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.