Boost your portfolio with these 2 dividend-paying stocks
The Canadian stock market is near its all-time high in the midst of a pandemic. Canada’s recent unemployment rate of 7.5% in March 2021 was still relatively high compared to 5.7% in 2019. Here are some safe dividend-paying stocks you can consider to boost your portfolio!
Buy this defensive dividend stock
Power Corporation of Canada (TSX: POW) is a holding company of insurance, pension, wealth management and investment companies. It consists of approximately 67% of Great-West Lifeco, 62% of IGM Financial, 14% of GBL, some investment platforms and economic interests in China AMC.
Power Corp. is also the largest shareholder of Wealthsimple, an online brokerage firm that makes it easy for Canadians to invest with low fees and no minimum account. China AMC is an asset manager in China with approximately RMB 1.6 trillion in assets under management at the end of 2020.
Power Corp. has maintained or increased its dividend for at least 20 years and is a Canadian Dividend Aristocrat. Its five-year dividend growth rate is 7.9%. It offers a yield close to 4.9% and is assigned a strong S&P credit rating of A +.
Dividend stock has a price boost. It erupted in March and has climbed 15% higher since then. At a reasonable valuation, it could continue to provide steady price appreciation while paying good dividend income to long-term investors.
Interested investors may consider waiting for its first quarter financial results until Power Corp. will publish very soon on Friday.
Boost your portfolio with wind power
There is a positive wind for renewable energy companies, including for Northland Power (TSX: NPI), which primarily includes a wind portfolio. Wind contributes approximately 58% of Northland Power’s operating capacity, including offshore wind 46% and onshore wind 12%. Natural gas also contributes 39% of its portfolio.
A large portion of the utility’s cash flow comes from its wind portfolio. Specifically, 65% of its Adjusted EBITDA, a cash flow indicator, comes from its offshore wind assets, 6% from onshore wind, 6% from solar assets and 23% from natural gas.
The company is at the forefront of offshore wind development. About 70% of its construction capacity uses this technology.
Northland Power sees an acceleration in offshore wind development in the second half of the decade until 2030.
Last month, in a share issue, Northland Power raised $ 990 million at $ 44 per share. The share offering was used in part to finance its acquisition of an operational 540 MW wind and solar portfolio for its entry into the Spanish renewable energy market.
The stock has corrected more than 20% from its 52-week high. At $ 39.13 per share as of writing, analysts estimate the dividend may appreciate as much as 36% over the next 12 months. Northland Power stock is also providing a good return of almost 3.1%.
Over the next five years, he identified potential investments of $ 15 billion to $ 20 billion with his partners (Northland’s $ 10 billion to $ 14 billion net stake). Management estimates a double-digit average rate of return for these projects, which could double the size of the company again by 2030.
The insane takeaway
Power Corp. and Northland Power are decent dividend-paying stocks to buy right now. Power Corp. is reasonably priced and offers a hefty dividend yield of almost 5%, which could be attractive to income investors. Northland Power is approximately 3% lower in return, but can deliver greater total returns over the next several years.
Here are more dividend paying stocks that are trading at good valuations!
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool service or advisor. We are Motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer, so we’re posting sometimes articles that may not meet recommendations, rankings or other content. .
Fool contributor Kay Ng has no position in any of the listed securities.