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The coronavirus pandemic exposed companies that were unprepared for volatile market conditions in 2020. While some entities were brutal impacted, others adopted swift cost-cutting measures such as slicing dividends. By April 2021, the Canadian markets were back in green and companies restored dividends to the levels before the pandemic hit the world. Some even increased their dividend payouts to shareholders!
According to a report by research firm S&P Global Market Intelligence, at least 60 companies listed on the Toronto Stock Exchange (TSX) increased dividends in the first quarter of 2021 and the overall number is expected to rise in this year.
The S&P/TSX Composite Index approximately covers 95 per cent of the Canadian share market and it has grown by 13.3 per cent year-to-date (YTD) and 5.6 per cent quarter-to-date (QTD). This indicates that the overall market is in growth mode, and market experts suggest that the country's main stock index may further climb with economic recovery in sight.
Dividend yields can help understand how much profit is distributed by a company during a year and is relative to the stock price.
It is not always necessary to consider a high dividend yield before investing in a stock. The reason we say this is because if the share prices are low, the dividend yield can be high. Since economic recovery is expected in Canada and the stock prices on the TSX could grow further, exploring high yield dividend stocks might provide you with timely gains this year.
Four TSX Stocks With Dividend Yield Over 7%
- Energy giant Enbridge Inc. (TSX:ENB) has been around for decades and is engaged in the generation and distribution of natural gas and oil. As crude prices rebound and some studies predict further climb this year, Enbridge is likely to capitalize on this opportunity. It pays a quarterly dividend of C$ 0.835 per unit and dividend yield is 14 per cent.
The energy company has an 11.1 per cent return on equity and has grown by about seven per cent in the last one year. It was priced at C$ 46.78 apiece on Wednesday, May 26.
- MCAN Mortgage Corporation (TSX:MKP) is a regulated mortgage investment firm and it pays C$ 0.34 apiece as a quarterly dividend. It registers a dividend yield of 8 per cent. The mortgage stock grew by 46.3 per cent in the past year and about 16 per cent year-to-date (YTD).
In the last three months, MKP stock surpassed the TSX 300 Composite Index and was up 5.7 per cent. - Inovalis Real Estate Investment Trust (TSX:INO.UN) provides office spaces to companies rent and has major business operations in France and Germany. Inovalis distributes a monthly dividend of C$ 0.069 and registers a current dividend yield of 3 per cent.
In Q1 2021, the firm’s rental revenue increased to C$ 7.4 million and net rental income was C$ 4.4 million. The stock surged by 14 per cent in the last three months and it catapulted by 38.5 per cent in the past year. - Labrador Iron Ore Royalty Corporation (TSX:LIF) is an equity investment company that generates its major revenues from the Iron Ore Company of Canada. It holds a price-to-earnings ratio of 10.3 and offers a 36.01 per cent return on assets.
On the dividend front, it pays a quarterly dividend of C$ 1 and holds an amazing dividend yield of 9.3 per cent. Labrador had remarkable share price growth of 102.6 per cent in the past year and outperformed the the S&P TSX Steel Index. LIF stock grew 16 per cent quarter-to-date and about five per cent last month.
Please note: The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view. The reference data in this article has been partly sourced from EODHD/Others
