The Canadian stocks on our list have generated above-average returns over the past three years with less volatility
SmallCapPower | June 1, 2020: Older, income-oriented investors tend to fear volatility, but in this low interest rate environment these individuals have needed to own more dividend stocks to generate sustainably returns in retirement. That being said, today we have chosen two Canadian stocks that have served volatility-adverse investors well over time.
*Returns are based on closing stock prices as of May 29, 2020
Waste Connections, Inc. (TSX:WCN) – $129.58
Waste Connections is an integrated solid waste services company that provides non-hazardous waste collection, transfer, disposal and recycling services in mostly exclusive and secondary markets in the United States and Canada. Through its R360 Environmental Solutions subsidiary, Waste Connections is also a provider of non-hazardous oilfield waste treatment, recovery and disposal services in several of the most active natural resource producing areas in the United States, including the Permian, Bakken and Eagle Ford Basins. Waste Connections serves more than seven million residential, commercial, industrial, and exploration and production customers in 42 states in the U.S., and six provinces in Canada. The Company also provides intermodal services for the rail haul movement of cargo and solid waste containers in the Pacific Northwest. RBC Capital Markets said WCN’s core defensive characteristics are: an industry-leading growth profile; robust and sustainable free cash flow (FCF) generation and; a top-notch management team. Waste Connections stock has a current dividend yield of 0.8%.
- Average Annual Return Over the Past 3 Years: 19% (Excluding dividends)
Fortis Inc. (TSX:FTS) – $53.01
Fortis is a North American regulated electric and gas utility industry provider, with 2019 revenue of $8.8 billion and total assets of $57 billion as at March 31, 2020. The Company serves utility customers in five Canadian provinces, nine U.S. states and three Caribbean countries. Fortis has a history of being a true ‘Steady Eddy’ grower, with 46 consecutive years of dividend increases and 6% average annual dividend growth planned through 2024. Nearly 100% of the Company’s earnings is expected to come from regulated and/or long-term contracted utility infrastructure. RBC Capital Markets wrote recently, “we see the stock being attractive given utility stocks’ historical “defensive” outperformance in bear markets, as well as current valuations being supported by the very low interest rate environment.” FTS stock has a current dividend yield of 3.6%.
- Average Annual Return Over the Past 3 Years: 11% (Excluding dividends)
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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