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The Best High Yield Stocks for September 2021…

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 price, 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. If high yield is necessary, look at the Canadian Financial ETFs, they also pay a sustainable high yield.

Be aware that high yield stocks could be as dangerous as investing in Canadian penny stocks.

1. CES Energy Solutions

CES Energy is a leading producer of consumable chemical solutions across the entire oilfield lifecycle. The company is a primary manufacturer of consumable chemicals, polymers and minerals.

It operates through drilling fluids, completion and simulation, production, and pipelines and midstream businesses. Key solutions include corrosion inhibitors, demulsifiers, H2S scavengers, paraffin control products, surfactants, and other specialty products.

CES has a presence across major resource plays in North America and operates in Permian, Eagleford, Bakken and Marcellus Basins in the U.S., as well as in the Western Canadian Sedimentary Basin in Canada. Its asset-light business model, oil field knowledge, vertically integrated technology and manufacturing are its strong competitive advantages.

CES Energy has a proven history of successful acquisitions. Its latest Catalyst acquisition has significantly increased its market share in the Permian Basin. The company is in a good position to benefit from growth in oil production, as well as growing specialty chemicals production.

Key Investment Data

  • Ticker: tse:CEU
  • Sector: Energy
  • Industry: Oil & Gas Equipment & Services
  • Market Cap: 0.42B
  • P/E: 10.88
  • Dividend Yield: 11.64%
  • Payout Ratio (TTM): 0.00%

Get your list of STRONG Dividend Growth Stocks

2. Chemtrade Logistic

Chemtrade is a leading global provider of industrial chemicals and services. Chemtrade provides industrial chemicals and services primarily in North America and worldwide.

It also provides industrial services such as processing by-products and waste streams. It is one of North America’s largest suppliers of sulfuric acid and inorganic coagulants for water treatment.

The company is known for its reliable products and global distribution channels. Chemtrade’s business segments are sulphur products and performance chemicals (SPPC – 34% of Q3’18 revenues), water solutions and specialty chemicals (WSSC – 27%), and electrochemical (39%).

The company enjoys significant market shares in niche specialty chemicals. A diversified product portfolio and large geographic footprint are the company’s strengths and mitigate commodity risks. Chemtrade has a long history of acquisitions and successful integrations which has resulted in a more resilient business.

Its SPPC business derives 60% of revenue from risk shared contracts, while its WSSC business segment includes specialty chemicals with distinct barriers to entry.

Key Investment Data

  • Ticker: tse:che.un
  • Sector: Basic Materials
  • Industry: Specialty Chemicals
  • Market Cap: 0.75B
  • P/E: 0.00
  • Dividend Yield: 8.26%
  • Payout Ratio (TTM): 0.00%

3. Fiera Capital

Fiera Capital Corporation is a global independent asset management firm with over C$164.7 billion in AUM as at September 30, 2019.

The company delivers customized multi-asset solutions across traditional and alternative asset classes to institutional, retail and private wealth clients across North America, Europe and key markets in Asia.

The company strives to be at the forefront of investment-management science and we are passionate about creating sustainable wealth for clients.

Fiera Capital recognizes that the investment landscape is constantly evolving and seeks to draw on the global industry’s most innovative and diverse offerings to craft strategies that meet the needs of any client, anywhere they are located. 

Key Investment Data

  • Ticker: tse:fsz
  • Sector: Financial Services
  • Industry: Asset Management
  • Market Cap: 0.91B
  • P/E: 31.91
  • Dividend Yield: 7.90%
  • Payout Ratio (TTM): 221.80%

4. Alaris Royalty Corp

Alaris is a Canadian company providing preferred equity financing to private businesses across North America. The company uses a unique structure to service a niche in the private capital markets.

About 91% of Alaris’ investment is in U.S. based companies and the balance is in Canadian companies. Alaris focuses on diversified industries such as business, professional, information and healthcare services, distribution and logistics, industrials and consumer products.

By industry, 58% of its investments are in business services, 35% in industrials, and 7% in consumer products and services. Alaris chooses to partner with companies having steady cash flows, proven management teams and are not very capital intensive.

Its interest in the partner companies could be in the form of a preferred partnership interest, equity interest, loan, or ownership of intellectual property. The company provides cash financing to partners in exchange for a predetermined distribution.

Key Investment Data

  • Ticker: tse:ad.un
  • Sector: Industrials
  • Industry: Conglomerates
  • Market Cap: 0.84B
  • P/E: 6.64
  • Dividend Yield: 7.09%
  • Payout Ratio (TTM): 45.80%

5. Enbridge

Enbridge Inc. is the largest energy infrastructure company in North America. It is Canada’s largest natural gas distributor engaging in the collection, transportation, processing and storage of oil and gas. Enbridge caters to 3.7 million customers in Ontario, Quebec, New Brunswick, and New York.

It owns an extensive network of about 192,000 miles of natural gas and NGL pipelines across North America and the Gulf of Mexico.

Its crude oil and liquids transportation systems are huge comprising of more than 17,000 miles of active pipelines.

The company is known for its high quality liquids and natural gas infrastructure assets. In addition, Enbridge has 3.1 Bcf/d of processing capacity and 438 Bcf of net natural gas storage capacity. It also owns interests in nearly 3,000 MW of renewable generation capacity.

Enbridge operates through five reporting segments – Liquids Pipelines (52% of 2018 earnings), Gas transmission and midstream (22%), Gas Distribution (17%), Green Power and Transmission (4%), and Energy Services (5%).

Key Investment Data

  • Ticker: tse:enb
  • Sector: Energy
  • Industry: Oil & Gas Midstream
  • Market Cap: 102.75B
  • P/E: 16.93
  • Dividend Yield: 6.59%
  • Payout Ratio (TTM): 110.00%

6. Extendicare

Extendicare is a leading provider of senior health care and services across Canada. It operates through a network of 120 senior care and retirement living centers and home health care operations, under the Extendicare, Esprit Lifestyle and ParaMed brands.

The company engages in providing quality care and service that includes long term care (57% of 2018 revenue), home health care (38%), retirement living (3%), and management and consulting services.

Extendicare is at the forefront of senior care across Canada serving more than 85,000 seniors across the country. It owns and operates 58 long-term care homes across Ontario, Manitoba, Saskatchewan, and Alberta.

The company also owns 10 retirement communities in Ontario and Saskatchewan and provides home health care solutions across 35 locations in Canada. Extendicare is in a good position to gain from a growing aging population commanding care services.

The Canadian population with 65+ years of age is expected to rise by approximately 25% by 2036 and Extendicare should benefit from this trend, given its reputation for quality of service, a five-decade long experience and cost-effective solutions.

Key Investment Data

  • Ticker: tse:exe
  • Sector: Healthcare
  • Industry: Medical Care Facilities
  • Market Cap: 0.69B
  • P/E: 11.77
  • Dividend Yield: 6.23%
  • Payout Ratio (TTM): 72.20%

7. Pembina Pipeline

Pembina Pipeline is a leading midstream and transportation service provider in North America. The company is known for providing safe and cost-effective transportation solutions since the last six decades.

The company offers a wide range of midstream and marketing services to the energy sector. It owns an extensive network of pipelines that transport crude oil, natural gas and natural gas liquids produced primarily in western Canada.

It also runs gathering and processing facilities and an oil and natural gas liquids infrastructure business.

Pembina owns a large asset base consisting of pipelines and facilities, which is difficult for newcomers to replicate. As a leading energy infrastructure company, Pembina serves multiple basins and markets throughout Canada and the US.

The company has 19 gas processing facilities and 6 billion cubic feet per day of net gas processing capacity. Pembina owns and operates an 18,000 km pipelines with a total capacity of 3 million barrels of oil equivalent per day.

Key Investment Data

  • Ticker: tse:ppl
  • Sector: Energy
  • Industry: Oil & Gas Midstream
  • Market Cap: 21.88B
  • P/E: 0.00
  • Dividend Yield: 6.33%
  • Payout Ratio (TTM): 0.00%

8. Gibson Energy

Gibson Energy is a leading oil focused infrastructure company in Canada. The company primarily engages in the storage, processing, and gathering of crude oil and refined products.

It also provides a full suite of marketing services to producers. The extent of Gibson Energy’s scale can be gauged from the fact that one in every four barrels of oil produced in Western Canada is associated with the company.

The company’s operations can be divided into three broad segments – infrastructure (5% of 2018 revenue), logistics (1%), and wholesale (94%). Though the wholesale business is Gibson’s largest segment by revenue, its infrastructure business accounts for nearly 60% of total profits. Gibson Energy operates nearly 14 million barrels of storage and over 500 km of crude pipelines.

The company’s operations are focused around its core assets which include Hardisty and Edmonton terminals, the Moose Jaw Facility and a large network of pipelines in the U.S. Strategically located assets and a large marketing network are Gibson’s key competitive advantages.

Key Investment Data

  • Ticker: tse:gei
  • Sector: Energy
  • Industry: Oil & Gas Midstream
  • Market Cap: 3.42B
  • P/E: 36.59
  • Dividend Yield: 5.99%
  • Payout Ratio (TTM): 212.10%

9. Keyera Corp

Keyera Corp. is one of the largest independent midstream energy companies with extensive interconnected assets across Canada.

The company caters to the needs of oil and gas producers in the Western Canada Sedimentary Basin, and provides NGL gathering and processing, fractionation, storage, transportation, logistics and marketing services.

Keyera’s core infrastructure is strategically located in key producing areas of Western Canada Sedimentary basin and Edmonton/ Fort Saskatchewan energy hub. The company also markets iso-octane, propane, butane, condensate and crude oil to customers in Canada and the United States.

It operates through Gathering and Processing, Liquids Infrastructure and Marketing segments. Keyera has strong expertise in operating complex energy processing facilities and provides a full range of essential midstream services to its customers.

Key Investment Data

  • Ticker: tse:key
  • Sector: Energy
  • Industry: Oil & Gas Midstream
  • Market Cap: 7.12B
  • P/E: 57.88
  • Dividend Yield: 5.96%
  • Payout Ratio (TTM): 344.80%

10. Freehold Royalties

Freehold Royalties is an oil and gas royalty company with assets predominantly in western Canada. The company receives oil and natural gas revenue from approximately 300 industry operators with royalty rates varying from less than 1% to 22.5%.

The royalty volumes are weighted nearly 55% oil and natural gas liquids (NGL) and 45% natural gas. Freehold does not incur any capital costs to drill or equip the wells for production.

Its land holdings total more than 6.4 million gross acres, which is one of the largest independently owned royalty lands portfolios in Canada. The company continues to add low decline, growth assets to its portfolio at a fast pace. Freehold owns a diverse portfolio of properties in western Canada.

Its royalties as a percentage of production have remained above 95%. About 10% of industry drilling within western Canada is on Freehold land. Given its strong reputation, the company can conveniently create new leases on its royalty lands.

Key Investment Data

  • Ticker: tse:fru
  • Sector: Energy
  • Industry: Oil & Gas E&P
  • Market Cap: 1.31B
  • P/E: 70.18
  • Dividend Yield: 6.01%
  • Payout Ratio (TTM): 187.00%

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 170 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.

My portfolio is generating over 12% annual returns since 2009. It’s not from the beginning of the year or from 2019, it’s from 2009 !!! That’s a consistent return which means using the rule of 72, I double my portfolio every 6 years.

My approach is simple but you need key data that I have cultivated with the Dividend Snapshot Screeners. No other investment services provide you with easy to understand data but also actionable data. No hidden magic.

In fact, I have tried all of the investment services for dividend investors like a crash test dummy of investment services. Just ask me, and you’ll learn why there was nothing I could use out there and build the Dividend Snapshot Screeners.


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