5 Canadian dividend stocks to sleep well as inflation rises

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5 Canadian dividend stocks to sleep well as inflation rises

5 Canadian dividend stocks
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Highlights

  • On Wednesday, May 18, StatCan reported that inflation rose in April and the inflation rate year-over-year stood at 6.8 per cent, the highest since January 1991
  • Building on the reduction of unemployment seen in February and March, April saw further decrease for a new record low
  • Amid inflation fears, and as the country gets back to work to earn that moola, one way to rest easy might be to consider dividend-paying stocks

On Wednesday, May 18, StatCan reported that inflation rose in April and the inflation rate year-over-year stood at 6.8 per cent, the highest in 31 years. This was primarily driven by food and shelter.

However, not all of it was particularly bad news. Building on the reduction of unemployment seen in February and March, April saw further decrease for a new record low. This may also be a factor in the rise of prices.

Amid inflation fears, and as the country gets back to work to earn that moola, one way to rest easy might be to consider dividend-paying stocks.

Returns on the stock’s price aside, dividends can provide passive income. Dividend yield is the dividends paid by a stock divided by its price and is expressed in percentage.

The dividend yields of the stocks mentioned here far out pass the inflation rate of 6.8 per cent.

Newport Exploration Ltd (TSXV:NWX)

A miner operating in Australia and Canada, Newport’s stock closed Wednesday at C$0.47. It has gained 3.33 per cent in a week and over one per cent year-to-date (YTD).

Considering that its price is under 50 cents, NWX pays a quarterly dividend of C$0.02 and that makes its dividend yield 17.2 per cent.

Its price-to-earning (P/E) ratio is 9.2 and this implies the number of dollars needed to invest in the stock for a profit of one dollar.

WestBond Enterprises Corporation (TSXV:WBE)

A paper manufacturer catering to a variety of sectors, WestBond’s stock closed out Wednesday at C$0.26.

Though in the red on a YTD basis, it is up four per cent in the last week from its 52-week low of C$0.25 seen on May 11.

WBE has a P/E ratio of 13 and a quarterly dividend is C$0.005. Its dividend yield stands at nearly 32 per cent and its three-year dividend growth is 71.12.

Doman Building Materials Group Ltd (TSX:DBM)

A wholesale distributor of building and renovation products, Doman’s stock at market close Wednesday stood at C$6.91.

It is up 2.23 per cent over the last week. Though it has lost 11 per cent this year, its earnings-per-share (EPS) is in positive territory (1.33) which suggests no loss to shareholders.

Its quarterly C$0.14 dividend per share means DBM’s dividend yield stands at over 8.1 per cent.

Its P/E ratio of 5.4, which is the best in this list, tied with Mineros’ MSA stock, suggests making each dollar of profit from these stocks necessitates just C$5.4 in investment.

Mineros S.A. (TSX:MSA)

Mineros’s journey on the TSX is relatively new. On November 25, 2021, it became the first Latin American company to debut on the TSX. However, it has traded for decades on the Bolsa de Valores de Colombia, the Colombia Stock Exchange.

The gold miner’s stock on Wednesday closed at C$0.90, a new low. It currently seems undervalued given its P/E ratio mentioned above. Its positive EPS of 0.2 suggests no loss to shareholders.

MSA’s quarterly dividend is US$0.016 for a dividend yield of nine per cent.

Also read: TPZ, TVE, FM, LUN & CAS: 5 TSX commodity stocks amid slowdown fears

ZoomerMedia Limited (TSXV:ZUM)

A multimedia content provider for the 45-plus demographic, its stock closed Wednesday at C$0.08, having spiked nearly seven per cent.

ZUM’s C$0.003 quarterly dividend for its cheap stock gives it a dividend yield of 15 per cent. It P/E ratio is 13.3.

5 Canadian dividend stocks

Bottom line:

Some of the above stocks have seen losses in the current bear season but all their EPS values are in positive territory. They are currently some of the top dividend payers in Canada right now but because of their relatively low market caps and stock prices, may experience volatility.

Another way might be checking out TSX dividend aristocrats but though they may be more stable stocks, their dividend yields may not be as high as these.

Also read: FFN, DF, DGS, LCS & FTN: 5 top TSX dividend stocks under $10

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks. 

 

On Wednesday, May 18, StatCan reported that inflation rose in April and the inflation rate year-over-year stood at 6.8 per cent, the highest in 31 years. This was primarily driven by food and shelter.

However, not all of it was particularly bad news. Building on the reduction of unemployment seen in February and March, April saw further decrease for a new record low. This may also be a factor in the rise of prices.

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