Markets have never been as prosperous as they are now. On the other hand, things have never been so risky, either. We’ve all heard the mantra: diversify, diversify, diversify. As cliche as it is, there’s a lot of truth to it.
When the stocks in your portfolio are spread across classes, the odds of disaster decrease. When one market sector suffers, others experience growth. When energy prices fall, sectors dependent on cheap energy benefit. When investors fear a crash, gold soars. And when it does come, bankruptcy firms boom.
American stocks have been hot lately. But, now there is a lot of uncertainty. Trump’s next move is anyone’s guess. And if Bernie beats him this November, whole industries could be disrupted by his policies. As such, it’s a good idea to invest in not just other sectors, but in other countries as well.
Before researching overseas markets, take a long look north of the border. Canada has scores of highly profitable, publicly-traded firms. These companies are stable and pay dividends that are sizable and stable.
Which Canadian equities should you add to your portfolio? In today’s post, we’ll talk about the best dividend stocks Canada has to offer.
(1) Canadian Imperial Bank of Commerce (CM.TO)
Canadian banks, from top to bottom, are rock-solid. During the Global Financial Crisis, when hundreds of American financial institutions were failing, Canada’s Big Five stood tall.
Thanks to their size and their diversified assets, they weathered the storm virtually unscathed. CIBC, or the Canadian Imperial Bank of Commerce, is among the largest of these institutions. This 150-year-old bank has branches in Canada, the United States, and in many Caribbean countries. They also have investments in operations located in Europe and Asia.
These activities have given CIBC a market cap of 48 billion CAD. Thanks to the stable yet prosperous nature of the banking sector, they pay a dividend of 5.76%. Considering its blue-chip status, this is a stunning figure no serious investor should ignore.
(2) Great-West Lifeco Inc (GWO.TO)
Do you know what the future holds? None of us does – if you did, you wouldn’t be reading this article. This simple truth is the compelling sales pitch that life insurers use to sell millions of policies every year.
In Canada, Great West Life is a household name. Founded in Winnipeg in 1891, Manitoba’s capital city still serves as the headquarters for this provider of health and life insurance solutions. They operate not just in Canada, but across America and Europe as well.
The nature of its product ensures a steady, stable, cash flow. As a result, it has been a popular dividend stock among Canadian investors for generations. With a market cap of 31 billion CAD and a dividend yield of 4.95%, your mouth should be watering.
(3) Enbridge Inc (ENB.TO)
The oil & gas industry has had a rough go of it over the past five years. Ever since the shale boom flooded markets with crude oil and natural gas, prices have been depressed.
Even so, every unit of gas and barrel of oil sold still makes prodigious amounts of money for companies like Enbridge. Without these products, our cars wouldn’t run, and we’d freeze in the dark. However, they don’t extract the oil & gas – they transport it through their pipelines.
This fact gives them a modicum of stability in a very volatile industry. Whether Enbridge's pipelines are full or half-empty, they still get paid. So, if you’re prepared to take on some risk, Enbridge could pay you some handsome dividends.
With a market cap of 105 billion CAD and a dividend of 6.25%, ENB.TO could be a worthwhile gamble.
(4) TransAlta Renewables Inc (RNW.TO)
As profitable as fossil fuels are, a new world is coming – perhaps, sooner than we expect. Greta Thunberg has inspired a global movement, pressuring politicians to act.
Already, governments are bending the knee. Renewables are growing at a breakneck pace worldwide, but especially in China. Norway, with its colossal sovereign wealth fund, is divesting from fossil fuel projects. And some nations, like the United Kingdom, have passed laws that will ban the sale of gas-fuelled cars as soon as 2035.
Getting in front of a trend is one of the best ways to make a fortune in the stock market. Despite the current dominance of fossil fuels, the evidence for change can be found all around us.
Want to get in on the ground floor? Start by buying some shares in RNW.TO. Although this company got its start servicing Alberta’s oil & gas industry, it has started to pivot towards renewables. Already, it has erected wind turbines at sites across Canada and the United States, as well as hydro and solar plants.
With a market cap of 4.1 billion CAD and a dividend of 5.99%, you can save the planet AND make a killing at the same time.
(5) Emera Incorporated (EMA.TO)
You flick a switch, and you get light. When this doesn’t happen, life as we know it – STOPS. Electricity is a necessity for modern living. As a result, few investments are as reliable as electrical utilities.
Emera Incorporated is one of Canada’s largest private power corporations. Formed from the remains of the Nova Scotia Power Corporation, it has holdings across Canada’s four Atlantic provinces. Together with its assets in New England, they have a market cap of 13 billion CAD.
They primarily provide energy services, but they also transport natural gas through a pipeline they control. Thanks to the consistent revenues that Emera earns, they offer investors a stable dividend of 4.42%.
Given the necessity of electricity to everyday life, investing in companies like EMA.TO should be a no-brainer.
Make Income From Your Canadian Investments
Buying and holding is dead. These days, it’s all about income. Take your capital and invest it in stable but intensely profitable dividend stocks. By doing this, you can establish a cash flow stream capable of funding your lifestyle.
Tarik Pierce is the founder of InvestorTrip.com and regularly contributes articles to this website.
While living overseas, he uses PureVPN for a low cost VPN service.
He recommends Bluehost for setting up your own personal and/or business blog.
While his background is mostly related to trading stocks, he recently gained interest in real estate crowdfunding with Fundrise.