In times of uncertainty in the market, dividend-paying stocks are sought after as safe havens, because they are less volatile than non-dividend-paying stocks and because they provide consistent streams of income regardless of which way the market goes. With this in mind, I’ve compiled a list of three great dividend stocks from different industries, so let’s take a quick look at each to determine if you should buy one or more of them today.
1. A&W Revenue Royalties Income Fund
A&W Revenue Royalties Income Fund (TSX:AW.UN) owns the trademarks and other intellectual property associated with the A&W brand in Canada, and it licenses these properties for use in operating and franchising quick-serve restaurants in exchange for a royalty of 3% of sales. It pays a monthly distribution of $0.13 per share, or $1.56 per share annually, which gives its stock a yield of approximately 4.8% at today’s levels.
It’s also very important to make two notes regarding its distribution.
First, the company’s two distribution hikes since the start of 2015, including its 4% hike last month, has it on pace for 2016 to mark the second consecutive year in which it has raised its annual distribution.
Second, it has a target payout of at or below 100% of its distributable cash.
2. Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is Canada’s third-largest bank with approximately $895 billion in assets as of April 30, 2016. It pays a quarterly dividend of $0.72 per share, or $2.88 per share annually, which gives its stock a yield of approximately 4.6% at today’s levels.
It’s also very important to make two notes regarding its dividend.
First, the company’s three dividend hikes since the start of 2015, including its 2.9% hike in March of this year, have it on pace for 2016 to mark the sixth consecutive year in which it has raised its annual dividend payment.
Second, it has a target payout range of 40-50% of its net earnings.
3. Hydro One Ltd.
Hydro One Ltd. (TSX:H) is the largest electric transmission and distribution utility in Ontario. It pays a quarterly dividend of $0.21 per share, or $0.84 per share annually, which gives its stock a yield of approximately 3.3% at today’s levels.
It’s also very important to make two notes regarding its dividend.
First, the company went public in November 2015, and it paid its first quarterly dividend in March of this year.
Second, it has a target payout range of 70-80% of its net earnings.
