If your goal is to get income, you won’t be disappointed with these three stocks that offer big yields. How big are the yields? The Canadian market, represented by iShares S&P TSX 60 Index ETF, offers a yield of 2.92%, while these stocks offer two to three times as much income!
Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) has a global platform of renewable power assets across 10 countries. Its portfolio is primarily comprised of hydroelectric generation, which is the highest-value renewable asset class and is a perpetual source of energy.
The world is in its early stages of transforming fossil fuels to renewables. So, the renewables sector has many years of strong growth ahead of it, and Brookfield Renewable is a good place to be.
With its +90% contracted cash flows that are embedded with organic growth and a 70% long-term target funds from operations payout ratio, Brookfield Renewable offers a safe cash distribution.
At about $38 per unit as of writing, Brookfield Renewable offers a yield of about 6.6%. It plans to increase its distribution per unit by 5-9% per year.
NorthWest Health Prop REIT (TSX:NWH.UN) has an international portfolio of healthcare properties, including medical office buildings and hospitals. Many of its non-domestic assets have high occupancies, long-term leases, and inflation escalations, which improve the quality and defensiveness of its portfolio.
For example, the REIT’s portfolio in Brazil has an occupancy of 100%, an average lease term of about 20 years, and rental increases that are 100% indexed to inflation.
Notably, NorthWest Healthcare Properties’s main tenant is Rede D’Or, which contributes about 13.3% of its gross rent. There’s no need to worry, though. Redo D’Or is a high-quality tenant: it is an industry leader, the largest private hospital operator in Brazil, and is awarded an “AAA” Fitch Rating on a national scale.
At about $10.60 per unit as of writing, NorthWest Healthcare Properties offers a yield of nearly 7.6%. Its recent portfolio occupancy and payout ratio were about 96% and 89%, respectively. Along with a weighted average lease expiry of about 12 years, the REIT’s cash distribution is secure.
American Hotel Income Properties (TSX:HOT.UN) has accumulated hotel assets predominantly in U.S. secondary markets, which have strong demand generators. Its portfolio is diversified across 33 states and 91 cities with about 18% of its net operating income coming from its economy lodging portfolio in the first half of the year.
Recently, it has been upgrading some of its hotels, which has disrupted its performance. By the end of 2020, 81% of its premium branded hotels and more than 50% of its economy lodging hotels will have been recently renovated. As it completes these renovations, American Hotel should be able to drive higher revenue.
American Hotel changed to a new hotel manager, Aimbridge Hospitality, in April. This change should be positive for the REIT because the new manager is very experienced. Aimbridge manages more than 800 upscale, independent, and branded hotel properties, encompassing over 100,000 hotel rooms, and it works for many other hotel REITs.
At about $8.60 per unit as of writing, American Hotel offers a yield of almost 9.9%. Management estimates a payout ratio of close to 90% this year.
