3 Canadian Dividend Stocks With Great Yields

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The search for income continues to be one of the more frustrating endeavors for investors. To make matters worse for yield-hungry investors, it now looks like the Fed may drag its heels raising rates as a result of continued global economic weakness.

canada investmentsIt could be many years before rates rise enough that bonds, bank products and treasury securities offer realistic opportunities for investors.

Dividend stocks and securities have been pretty well picked over here in the U.S. as the great yield chase has been going on for almost five years.

The recent weakness in energy stocks and natural resource stocks has created some bargain income producing activities to our North. Although investors may have to accept some commodity related volatility, there are several decent dividend stocks that trade at a discount to their asset value. Investors with a long-term view of the world can get paid handsomely to wait for energy and natural resources to recover.

MFC Industrial (MIL)

mfc-industrial-mil-stock-185MFC Industrial (MIL) is a global commodity supply chain company that sources, delivers and even finances a wide range of commodities. The company has experience rounding up and delivering things like ores, metals, energy, plastics and lumber. It also invests its own capital via a merchant banking operation that invests in commodity- and resource-related companies.

MIL stock is cheap right now, trading at just 55% of book value, and you get paid 3.9% to wait for the economy and commodity markets to improve. Investor Peter Kellogg, who headed up Spear Leeds until selling the specialist firm to Goldman Sachs back in 2000, owns about a third of the company.

Teck Resources (TCK)

teck resources 185Teck Resources (TCK) is another resource-rich company worth considering by patient investors looking for long-term dividend stocks. Teck’s major products are copper, metallurgical coal and zinc but they also produce lead, indium molybdenum and germanium as byproducts of their mining operations. The company also has operation in oil sand projects with 20% interest in the Fort Hills oil project and 100% ownership of the Frontier site.

TCK stock is currently trading at about 55% of book value and yields 5.1%. It may be bumpy due to community price swings, but Teck Resources is currently profitable and should see revenues and profit gains beginning in 2015. Patient investors should do very well over time with dividend stocks as solid as TCK.

TransAlta Corporation (TAC)

transalta-tac-stock-promoTransAlta Corporation (TAC) is Canada’s largest publicly traded power generator. TransAlta is not selective about how it produces power — using coal, natural gas and green energy sources like hydro and wind to produce power. TransAlta has widespread, global market exposure as well, with 65 facilities strategically positioned in Canada, the Western U.S. and Western Australia.

TAC stock trades at 1.4 times book value which is normally too high for me, but the EV/EBITDA ratio of 3.9 combined with the 6.7% dividend yield make the stock worth consideration by long-term fans of dividend stocks.

Investores looking for yield and who are willing to withstand some short term volatility as a result of commodity price moves would be wise to consider some of these Canadian Energy and resource stocks as long-term opportunities.

As of this writing, Tim Melvin was long MIL and TCK.


Article printed from InvestorPlace Media, https://investorplace.com/2014/10/canadian-dividend-stocks/.

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