3 Attractive Dividend Stocks Yielding 5-7%

Here’s why Russel Metals (TSX:RUS) and another two unknown dividend stocks deserve to be on your radar.

| More on:

Canadian income investors are constantly searching for quality companies that offer reliable distributions and above-average yield.

Let’s take a look at three under-the-radar names that might be interesting picks for a dividend-focused portfolio today.

Inter Pipeline (TSX:IPL)

IPL operates oil pipelines and natural gas liquids processing facilities in Canada, as well as a liquids storage business in Europe.

Management took advantage of the downturn in the oil sector to buy assets at discounted prices, including the addition of two NGL extraction sites and related infrastructure for $1.35 billion. An improvement in the market is boosting margins, and the new assets are delivering strong results for the gas processing group.

IPL is also constructing a $3.5 billion plastics facility. The Heartland Petrochemical Complex is targeted for completion in late 2021 and is expected to generate $400-500 million in EBITDA on an annual basis.

The company increased the payout every year through the oil rout and additional dividend hikes should be on the way. The payout ratio was just 64% in Q2 2018, so there is ample room to boost the distribution. At the time of writing, IPL provides a yield of 7.3%.

Keyera (TSX:KEY)

Keyera is another midstream player in the Canadian energy sector. The company is primarily a fee-for-service business with operations that include natural gas gathering and processing, NGL processing, transportation, storage and marketing.

The company recently increased its monthly dividend from $0.14 to $0.15 per share. That’s good for a yield of 5.1%.

Growth continues through a combination of acquisitions and organic developments. The company is developing a crude oil storage and blending project at Cushing, Oklahoma and recently purchased a related facility near the project.

Russel Metals (TSX:RUS)

Russel Metals has operations across Canada and the United States. The company operates in three segments, including metals service centres, steel distribution, and energy products.

Russel Metals has done a good job of adjusting to the impacts of tariffs and other trade threats and continues to deliver solid results. The energy segment is benefitting from a recovery in the oil market and earnings generated in the United States can provide a nice increase to the bottom line when the U.S. dollar strengthens against the loonie.

The Q2 2018 results were the best the company has reported since 2008, and the good times look set to continue. Russel Metals has a strong track record of growing through strategic acquisitions and more deals could be in the cards as the industry consolidates.

The current dividend provides a yield of 5.6%.

The bottom line

IPL, Keyera, and Russel Metals might not be the most exciting businesses to own, but they are all growing and pay above-average distributions that should be safe.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Andrew Walker has no position in any stock mentioned.

More on Dividend Stocks

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »

Tractor spraying a field of wheat
Dividend Stocks

Is Nutrien Stock a Buy for its Dividend Yield?

Nutrien is down more than 50% form the 2022 highs. Is NTR stock now oversold?

Read more »

golden sunset in crude oil refinery with pipeline system
Dividend Stocks

Best Stock to Buy Right Now: Enbridge vs TC Energy?

Enbridge and TC Energy rebounded nicely over the past year. Are more gains on the way?

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

2 Utility Stocks That Are Smart Buys for Canadians in November

Are you looking for some of the smart buys to consider in November? These utility stocks offer growth and a…

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

Is Power Corporation of Canada Stock a Buy for its 5% Dividend Yield?

Is Power Corporation of Canada (TSX:POW) stock's 5% dividend yield worth it? Discover why this resilient stock could be a…

Read more »

hand stacks coins
Dividend Stocks

Here Are My Top 3 Dividend Stocks to Buy Now

These three dividend stocks are ideal for strengthening your portfolio and earning a stable passive income.

Read more »

man touches brain to show a good idea
Dividend Stocks

3 No-Brainer REIT Stocks to Buy Right Now for Less Than $200

REITs have long been touted as some of the best dividend stocks out there if you want recurring, strong income.…

Read more »