Friday, November 05, 2010

High Yields North of the Border

Why Canada? The country came through the housing crisis and financial crisis much better than the United States. Canada is filled with natural resources, and with gold and silver making new highs has certainly helped. Our northern neighbor also has a huge petroleum industry, the second largest oil reserves in the world. It is a net exporter of energy, one of the few nations that can make that claim. It is also one of the top twelve countries in the world by gross domestic product at purchasing power parity per capita, and has a lower unemployment rate than the United States.

Although Canada has lots of penny mining stocks, it also has plenty of large cap companies paying high dividends. According to which just updated a list of top yielding Canadian stocks, 15 yield more than 2.7%. Here are some examples:

Bank of Montreal (BMO) sports a healthy yield of 4.6%. This is Canada's oldest bank, founded in 1817. The stock has a trailing price to earnings ratio of 13 and a forward PE of 11. Earnings for the latest quarter were up over 20% on a 2.4% revenue increase.

Enbridge Inc. (ENB) is primarily an oil and gas pipeline company but it also is involved in green energy, owning four operating wind farms, investing in the 80 megawatt Sarnia Solar Project, and creating the first hybrid fuel cell power plant in the world. The stock provides a yield of 2.9% and trades at 19.5 times trailing and forward earnings. Adjusted net income was down for the latest quarter due to crude oil spills, however revenues were up 38%, and adjusted operating income was also up.

Rogers Communications Inc. (RCI), a Toronto based communications and media company, yields 3.5%. The stock trades at 15 times trailing earnings and 11 times forward earnings. Earnings were down over 23% for the latest quarter, primarily due to a large loss on repayment of long-term debt and higher sales expenses, but revenues were up 2.7%.

To see a list of over 15 high yield Canada stocks, which can be downloaded, sorted, changed, updated, and added to, go to

A reminder: Income on Canada stocks is subject to Canadian withholding tax.

Author does not own any of the above.


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