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The year just ended was a good one for income-oriented investors. Prices of interest-sensitive securities rose as the U.S. Federal Reserve Board changed direction and lowered rates three times.

The two most rate-sensitive subindexes on the TSX ended the year with significant gains. The S&P/TSX Capped REIT Index advanced 17.3 per cent in 2019, while the S&P/TSX Capped Utilities Index gained an amazing 31.7 per cent.

So, what about 2020? Will we see a repeat?

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Probably not to the same extent. The big rise in the Capped Utilities Index was a historical outlier. But I do think income stocks as a whole will perform well again this year.

The reason is interest rates. There is no indication they are going up in the next 12 months. In fact, the probability is we’ll see a drop in Canadian rates while the United States stands pat.

As things stand right now, Canada’s overnight rate is 1.75 per cent. That’s higher than the U.S. federal funds rate, with its target range of 1.5 to 1.75 per cent. However, based on recent numbers, the U.S. economy is in much better shape than ours. Figures released on Jan. 10 showed that a seasonally adjusted 145,000 jobs were created in the U.S. in December, with unemployment at a 50-year low of 3.5 per cent. Canada created 35,000 jobs in the same month, but that was after a loss of 71,000 jobs in November. Our unemployment rate is 5.6 per cent.

Final U.S. GDP growth numbers for 2019 had not been released at the time of writing, but the projection is for a gain of 2.1 per cent. The Bank of Canada has predicted our growth for the year will be 1.5 per cent.

Based on these numbers, there is no obvious catalyst for an increase in the Bank of Canada’s key rate in 2020. A rate cut is more likely, especially if the economy weakens.

Most income stocks thrive when interest rates go down. That’s why I believe 2020 will be another good year for income-oriented investors.

Here are five stocks with above-average yields to consider for your portfolio this year.

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BCE Inc. (BCE). The stock, which closed Monday at $61.95, has dropped back from its 52-week high of $65.45 reached in late September. But that’s good news if you’re buying for the first time or adding to existing holdings. The lower price means a higher yield. The stock currently pays 79.3 cents a quarter ($3.172 annually), to yield 5.1 per cent. And a dividend increase is expected when the company releases year-end results and 2020 guidance on Feb. 6.

Firm Capital Mortgage Investment Corp. (FC). This small company has been a dependable source of cash flow ever since I first recommended it in my Income Investor newsletter way back in 2004. The dividend, which is treated like interest for tax purposes, hasn’t changed in years, at 7.8 cents a month (93.6 cents a year). But the price doesn’t change much, either, closing Monday at $14.91 and trading in a range of $13 to $15 over the past year. The current yield is 6.4 per cent.

Capital Power Corp. (CPX). Capital Power is an Edmonton-based power generator with 26 operating facilities across Canada and the U.S. The stock has been moving steadily higher since midsummer, aided by falling interest rates. Its shares closed Monday at $35.51. The dividend was raised in September to 48 cents a quarter ($1.92 annually), giving the shares a yield of 5.4 per cent.

Pembina Pipeline Corp. (PPL). The energy sector may be in a slump, but a few companies are thriving, and this is one of them. Pembina has a network of oil and gas pipelines across Western Canada and into the U.S., and also operates natural-gas processing facilities. On Jan. 9, the shares hit a multiyear high of $51.30 before slipping back a little. The stock, which closed Monday at $50.48, pays a monthly dividend of 20 cents a share (and rising another penny for shareholders of record on Jan. 24) to yield 4.8 per cent.

Morguard REIT (MRT.UN). Many REITs offer attractive yields, but few are higher than Morguard. It owns 48 commercial properties with approximately 8.5 million square feet of space, mainly in the retail and office sectors, in six provinces. Investors receive a monthly payment of 8 cents a unit (96 cents a year) for a yield of 8.1 per cent at the current price of $11.91.

Gordon Pape is editor and publisher of the Internet Wealth Builder and Income Investor newsletters.

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