Skip to main content

As an income investor, you have to love stock market corrections.

Falling stock prices mean rising dividend yields. As a result of the big market declines of last week, the menu of blue chip stocks listed on the TSX with dividend yields above 4 per cent is as varied as it's been in a while. If you have new money to invest, you have a chance to earn yields of more than double the 1.9 per cent inflation rate.

A total of 14 stocks in the S&P/TSX 60 index of big blue chips made "4 per cent list" as of mid-February, including pipeline, bank, utility, telecom and energy companies. To narrow down the group some, let's include only companies that have increased their dividend by 5 per cent or more in the past year. This leaves us with:

Story continues below advertisement

- Enbridge Inc. (ENB-T): This one time darling of dividend investors was falling out of favour even before the recent market sell-off. The yield has lately been in the low 6-per-cent range, which would have been unthinkably high a couple of years ago. Investors are concerned that a big U.S. acquisition will slow profit and dividend growth going forward. One-year dividend growth came in at 15 per cent, according to Globeinvestor.com

- Pembina Pipeline Corp. (PPL-T): Stocks in the pipelines and utilities sectors are vulnerable to the kind of interest rate increases we've seen lately. PPL's yield has been in the 5.5-per-cent range, while one-year dividend growth was 12.5 per cent.

- Emera Inc. (EMA-T): This utility stalwart has a yield in the 5-per-cent range, and one-year dividend growth of 8 per cent. Higher rates would be a headwind for this stock.

- BCE Inc. (BCE-T): One-year dividend growth of 5 per cent is just enough to put this telecom giant onto our list. The dividend yield was just above 5 per cent.

- Power Corp. of Canada (POW-T): This conglomerate had a 4.8-per-cent yield and one-year dividend growth of 7 per cent.

- TransCanada Corp. (TRP-T): If you don't mind the downside risk posed by high rates, you can tap into a yield of 4.7 per cent and a dividend growth record that produced one-year growth of 10.6 per cent.

- Telus Corp. (T-T): A slightly lower yield than BCE, with similar dividend growth over the past year.

Story continues below advertisement

- Bank of Nova Scotia (BNS-T): The only bank to make this list offers a yield of 4 per cent and dividend growth over the past year of close to 7 per cent. Scotiabank stock has lagged compared to other banks in the past five years.

- Fortis Inc. (FTS-T): The final stock on this list brings a 4-per-cent yield and dividend growth of just over 6 per cent.

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments are closed

We have closed comments on this story for legal reasons or for abuse. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter