The Canadian dividend stocks we’ve discovered have a history of dividend growth but with much less stock price volatility
SmallCapPower | June 11, 2019: A majority of investors can be classified as risk averse and these investors prefer lower returns with known risks rather than higher returns with unknown risks. Dividend stocks are often favourable for risk-averse investors as it provides guaranteed periodic income. Risk-averse investors generally also look for stocks with less volatility, with a beta equal to, or lower than, 1. Today, we have identified four of the best Canadian dividend stocks for risk-averse investors, on a basis of low beta and strong dividend yield. For reference, the average dividend yield from our sample size of 294 Canadian dividend stocks was 4.2% and the average beta was 1.
*Share prices as at close Friday, June 7, 2019, data obtained from S&P Capital IQ
Algonquin Power & Utilities Corporation (TSX:AQN) – $16.28
Multi-Utilities
Algonquin Power & Utilities Corporation is a North American diversified generation, transmission, and distribution utility with $10B of total assets. It generates and sells electrical energy through a portfolio of non-regulated renewable and clean energy power generation facilities. The Company also owns and operates hydroelectric, wind, solar, and thermal facilities. AQN serves ~266,000 electric connection, ~338,000 natural gas connections, and ~164,000 regulated water distribution and wastewater collection utility systems. On June 3, Algonquin Power & Utilities announced its intention to acquire Bermuda Electric Light Company, a provider of regulated electrical generation, transmission, and distribution services to Bermuda, for US$365M, which is expected to close in late 2019.
- Market Cap: $8.0B
- YTD Return: 20.3%
- 90 Day Average Trading Volume: 1,140,000
- Beta: 0.46
- Dividend Yield: 4.7%
Metro Inc. (TSX:MRU) – $50.20
Food Retail
Metro operates as a retailer and distributor in the food and pharmaceutical sectors in Canada. It operates food stores, including supermarkets and discount stores that provide fresh produce & grocery products, prepared foods, general merchandise, bakery products, and deli products. On May 7, Metro announced the rollout of its online grocery shopping service in Ontario. The platform will now be offered in the Greater Toronto Area, servicing 1.9M households.
- Market Cap: $12.8B
- YTD Return: 7.5%
- 90 Day Average Trading Volume: 530,000
- Beta: 0.04
- Dividend Yield: 1.6%
BCE Inc. (TSX:BCE) – $62.24
Integrated Telecommunication Services
BCE is a telecommunications and media company that provides wireless, wireline, Internet, and television services to residential, business, and wholesale customers in Canada. Its three business segments include Bell Wireless, Bell Wireline, and Bell Media. Bell Wireless offers wireless voice and data communications products and services. The Bell Wireline segment provides data, including Internet access, Internet protocol television, and local & long-distance telephone services. The Bell Media segment provides conventional & specialty TV, digital media, radio broadcasting, and broadcasting services.
- Market Cap: $55.9B
- YTD Return: 15.3%
- 90 Day Average Trading Volume: 1,860,000
- Beta: 0.39
- Dividend Yield: 5.1%
Emera Incorporated (TSX:EMA) – $53.10
Electric Utilities
Emera is a geographically-diverse energy and services company headquartered in Halifax, Nova Scotia, with approximately $32 billion in assets and 2018 revenues of more than $6.5B. The Company invests primarily in regulated electricity generation, transmission, and distribution companies with a strategic focus on transformation from high carbon to low carbon energy sources. Emera has investments throughout North America, and in four Caribbean countries. On May 10, Emera Inc reported Q1/19 results, highlighted by net income of $312M and revenue of $1.8B, which represent sequential increases of 2% and 35%, respectively.
- Market Cap: $12.5B
- YTD Return: 21.6%
- 90 Day Average Trading Volume: 810,000
- Beta: 0.17
- Dividend Yield: 4.4%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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