Investing

High Yield Stock Ideas

  • Last Updated:
  • Nov 24th, 2020 5:53 pm
[OP]
Deal Addict
Feb 26, 2017
1989 posts
2316 upvotes

High Yield Stock Ideas

I'm posting this thread to discuss high yield stocks.

In general I invest almost all of funds in dividend growing stocks, which I think is great long term strategy. Over the past several months I've been trying to increase my yield of my portfolio and have been buying some higher yielding stocks to supplement my core portfolio. Dividend growth with a high yield would be ideal (I've recently bought tse:CPX and more tse:BPY.un). These stocks tend to be a bit riskier but I still view avoiding dividend cuts as very important.

This is what I currently own that yields over/around 6%.

tse:key 6.32%
tse:enb 6.20%
tse:afn 5.71%
bpy.un 6.89%
tse:cpx 6.32%
nys:T 5.53%

Here is a list of other stocks I'm following. Note, I'm not necessarily recommending these stocks but there on my watch list.

tse:ipl 7.71%
tse:cgx 7.88%
tse:srv.un 9.65%
tse:pza 9.02%
cve:nxr.un 7.77%
tse:nvu.un 5.61%
tse:mrt.un 8.21%
tse:nwh.un 6.70%
tse:tnt.un 8.15%
tse:rnw 6.71%
nys:MO 7.18%
nys:MIC 10.05%

Here is a list of stocks I view as too risky (I owned BRE earlier this year but sold it). I think there is a good chance these stocks will cut their dividend.

tse:dr 14.28%
tse:cwx 12.84%
tse:bre 9.04%

Anyways, opening this to discussion on these stocks or other high yield ideas.
92 replies
Jr. Member
User avatar
Sep 5, 2018
180 posts
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IPL - I think this is a good time to be getting in as a long-term hold, with its Propane Dehydrogenation and Polypropylene Complex due to come online end of 2021. That will add significant cashflows, so long as the rollout is on time and without (too) many hiccups.

CWX - The payout ratio on this stock is estimated to drop from 90% this year to about 50% in 2021. It also has high insider ownership (roughly 20%) and insiders have been buying at these levels. Don’t expect much capital growth, but the divvy should be safe barring some industrial/home start collapse.

RNW - Long term hydro contracts, strong balance sheet, and you’d have to think the whole renewables push will have investors throwing money at it just because (like BEP.UN).
Late Cycle Investing
[OP]
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Feb 26, 2017
1989 posts
2316 upvotes
pistilogo wrote: IPL - I think this is a good time to be getting in as a long-term hold, with its Propane Dehydrogenation and Polypropylene Complex due to come online end of 2021. That will add significant cashflows, so long as the rollout is on time and without (too) many hiccups.

CWX - The payout ratio on this stock is estimated to drop from 90% this year to about 50% in 2021. It also has high insider ownership (roughly 20%) and insiders have been buying at these levels. Don’t expect much capital growth, but the divvy should be safe barring some industrial/home start collapse.

RNW - Long term hydro contracts, strong balance sheet, and you’d have to think the whole renewables push will have investors throwing money at it just because (like BEP.UN).
I like RNW but I probably should be cutting myself off from buying any more utilities (I currently own BIP.un, AQN, CU, NPI and CPX).

IPL was actually my biggest holding about 3 years ago but the stock price going down really stressed me out and I ended up getting out at around $26. I may buy it again but I'm a bit scared investing in anything long term in the energy sector (even pipelines at this point)... I see it as amazing value though as it has safe almost a 8% dividend with the heartland providing a 30-40% boost in ebitda in 2021.
Deal Addict
Nov 9, 2013
4033 posts
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Edmonton, AB
Chance7652 wrote: I like RNW but I probably should be cutting myself off from buying any more utilities (I currently own BIP.un, AQN, CU, NPI and CPX).

IPL was actually my biggest holding about 3 years ago but the stock price going down really stressed me out and I ended up getting out at around $26. I may buy it again but I'm a bit scared investing in anything long term in the energy sector (even pipelines at this point)... I see it as amazing value though as it has safe almost a 8% dividend with the heartland providing a 30-40% boost in ebitda in 2021.
I think the sentiment would work to your advantage as it suppresses prices and increases yields. Ultimately though multiples probably won’t expand all that much moving forward so I would focus on those with highly stable cash flows that are likely to grow.
Keep calm and go long
Deal Fanatic
Oct 1, 2004
6205 posts
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Toronto
How are you finding your picks? Just sorting by div %? Or do you have criteria you use such as constant growth for certain amount of years?
[OP]
Deal Addict
Feb 26, 2017
1989 posts
2316 upvotes
greg123 wrote: How are you finding your picks? Just sorting by div %? Or do you have criteria you use such as constant growth for certain amount of years?
For the stocks that I own I've done a lot of research on those (seeking alpha, Fastgraphs read earnings call transcripts and analyst reports). In general some type of earnings growth is necessary to make a good investment even if your relying on the dividend for most of your returns.

For the others I have a watch list in Google Sheets where the prices auto update. These ideas are in general from either seeking alpha or postings on redflagdeals that I've also looked up in Fastgraphs. Compared to the stocks I own I haven't put that much research into most of the stocks on the list. A lot of contrarian ideas (movie theaters, tobacco companies, pipelines and retail reits).
Deal Fanatic
Feb 15, 2006
8860 posts
3353 upvotes
Toronto
With the BOC's earlier intention to gradually increase interest rate, many dividend stocks and REITS tanked. But now BOC is not increasing interest rate, those stocks came to life. They may look good now, but do watch the effect of interest rate directions.

Also the REITS with distributions are taxed differently than dividends. It's better to hold them inside registered instruments, if there is room.
Last edited by Arrgh on Oct 29th, 2019 5:24 pm, edited 1 time in total.
Banned
Nov 23, 2018
592 posts
516 upvotes
Most of them are bad, just go with the banks. US Banks that is.
Sr. Member
Jun 28, 2018
906 posts
643 upvotes
Toronto
Chance7652 wrote: A lot of contrarian ideas (movie theaters, tobacco companies, pipelines and retail reits).
Ooo interesting why movie theatres?
The Distracted Investor

Dividends through quality companies 😃 Though I usually lose money with trades :facepalm:
Penalty Box
Dec 2, 2014
405 posts
226 upvotes
Toronto, ON
What do you guys think about VET.TO? Its at a really good value but im not sure how long theyll be able to sustain their current payout ratio. Otherwise id be all over it.
[OP]
Deal Addict
Feb 26, 2017
1989 posts
2316 upvotes
johnnychi wrote: Ooo interesting why movie theatres?
Declining box office ticket sales. People watching Netflix instead of going to a theatre. As an antidote, my kids watch YouTube and don't really watch tv or movies anymore.

Cgx has always looked good to me in fastgraphs. A 7.8% yield + a 3.4% raise this year is also really good. I've just never been able to convince myself to buy it. It's the type of stock where I can't picture how the business will look in 10 years. My Dad does own it though and he's got a pretty good track record at investing in high yield companies.
[OP]
Deal Addict
Feb 26, 2017
1989 posts
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BRKAMZN wrote: Most of them are bad, just go with the banks. US Banks that is.
I'm biased but I think there are some good ideas :). I'm very cautious when looking at stocks yield 7-8%.
Deal Fanatic
Feb 4, 2015
6665 posts
2987 upvotes
Canada, Eh!!
Was holding some USD in CIBC MM that was paying bit above 2% but yield getting lower.

So decided to add some risk of stocks going lower/higher but more then doubled yield by buying:

TU
SPG
MFC
RCI.B
TD
AQN
ABBV
SJR
PBA

This was done over several months starting mid summer.

Plus some will be eligible for dividend tax credit. There will be some exchange loss in dividends conversion but ok with that as DTC will result in less taxes then if went strictly US stocks. Good that AQN pays in USD.

Tried to vary from dividend payers held in CAD like EIF.to, NPI.to, KEY.to, NFI.to, IPL.to, etc. but some overlap with TD.to and T.to
.......
July 13, 2017 to October 25, 2018: BOC raised rates 5 times and MCAP raised its prime rate next day each time.

2020: BOC dropped rates 3 times and MCAP waited and waited to drop its prime rate to include all 3 drops.
[OP]
Deal Addict
Feb 26, 2017
1989 posts
2316 upvotes
georvu wrote: Was holding some USD in CIBC MM that was paying bit above 2% but yield getting lower.

So decided to add some risk of stocks going lower/higher but more then doubled yield by buying:

TU
SPG
MFC
RCI.B
TD
AQN
ABBV
SJR
PBA

This was done over several months starting mid summer.

Plus some will be eligible for dividend tax credit. There will be some exchange loss in dividends conversion but ok with that as DTC will result in less taxes then if went strictly US stocks. Good that AQN pays in USD.

Tried to vary from dividend payers held in CAD like EIF.to, NPI.to, KEY.to, NFI.to, IPL.to, etc. but some overlap with TD.to and T.to
I like those picks and own 6 of the names you mentioned.

I looked at ABBV when it was yielding over 6% but couldn't think of anything to sell. It got away from me I think (its up around 20% since then).
Sr. Member
Jun 28, 2018
906 posts
643 upvotes
Toronto
Chance7652 wrote: Declining box office ticket sales. People watching Netflix instead of going to a theatre. As an antidote, my kids watch YouTube and don't really watch tv or movies anymore.

Cgx has always looked good to me in fastgraphs. A 7.8% yield + a 3.4% raise this year is also really good. I've just never been able to convince myself to buy it. It's the type of stock where I can't picture how the business will look in 10 years. My Dad does own it though and he's got a pretty good track record at investing in high yield companies.
A lot of contrarian ideas (movie theaters, tobacco companies, pipelines and retail reits).
hmm I must have misread, what is the contrarian point to buy theatres? That it has raised its dividend despite the perceived issues of the industry?
The Distracted Investor

Dividends through quality companies 😃 Though I usually lose money with trades :facepalm:
[OP]
Deal Addict
Feb 26, 2017
1989 posts
2316 upvotes
johnnychi wrote: hmm I must have misread, what is the contrarian point to buy theatres? That it has raised its dividend despite the perceived issues of the industry?
Meant buying the stock is contrarian.
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Sep 8, 2007
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Way Out of GTA
Chance7652 wrote: Declining box office ticket sales. People watching Netflix instead of going to a theatre. As an antidote, my kids watch YouTube and don't really watch tv or movies anymore.

Cgx has always looked good to me in fastgraphs. A 7.8% yield + a 3.4% raise this year is also really good. I've just never been able to convince myself to buy it. It's the type of stock where I can't picture how the business will look in 10 years. My Dad does own it though and he's got a pretty good track record at investing in high yield companies.
Most people on CGX miss the other elephant in the room. Hollywood’s unhinged political messaging has turned off many viewers from ever going to see the trash they produce. If the product appealed to everyone it would be a much bigger audience, which to a large extent in the older days it did. I’m rather happy to see it melt down and burn.
Deal Fanatic
Jun 27, 2007
5502 posts
1952 upvotes
rate reset preferred shares of two biggest banks/insurers? easy 6%, friendly tax on divvy
It's easy to grin when your ship comes in and you've got the stock market beat.
But the man worthwhile is the man who can smile when his shorts are too tight in the seat 😃
In Fed We Trust - Make ES Limit Down Great Again!
Sr. Member
May 9, 2006
865 posts
181 upvotes
Mississauga
can someone explain me this?

For DR.tse

Total Dividend ($) per Share :0.09375
Record Date : 31.10.2019
Payment Date : 15.11.2019
Declaration Date : 22.10.2019
Ex-Dividend Date : 30.10.2019

when is the last day I can buy this in order to qualify for Yield? and when can I sell it and still get the dividend? can someone help me understand?
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Dec 8, 2010
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djjungly wrote: can someone explain me this?

For DR.tse

Total Dividend ($) per Share :0.09375
Record Date : 31.10.2019
Payment Date : 15.11.2019
Declaration Date : 22.10.2019
Ex-Dividend Date : 30.10.2019

when is the last day I can buy this in order to qualify for Yield? and when can I sell it and still get the dividend? can someone help me understand?
Ex-dividend day. Because there is a 2 day settlement process. Buy before ex-div, sell on or after.

Declaration: "I will pay a dividend!"

Ex-div: Date on which the stock price adjusts, so you must have bought the day before, you can sell on this day.

Record: you must hold the shares on this day but there is a two day lag for buys and sells ("settlement") which is why the ex-div date matters from your perspective.

Payment: "Here's your money, person who was owner on the record date"

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