The main content for this article first appeared in the Seeking Alpha Marketplace service DGI Across North America, in which other utilities were discussed.
Utilities have been great income-growth investments over the long term. The Canadian utilities have dipped meaningfully recently. So, I think it’s a great time to check out Fortis Inc. (TSX:FTS)(NYSE:FTS).
This first appeared as 1 of 3 top Canadian dividend ideas for October 2017 in the Seeking Alpha Marketplace service DGI Across North America.
Altagas’s (TSX:ALA) share price surely looks like it’s turning around after management hiked its dividend for December. Specifically, the dividend increase was nearly 4.3%. That doesn’t sound much until you hear that the company now offers a ~7.5% yield.
Don’t be spooked by Altagas’s big yield, though.
Is Altagas’s Dividend Safe?
The company is working on a big acquisition, which requires lots of resources. It also plans to sell some of its assets to fund the acquisition. By investing in internal projects, at least some of the lost cash flow will be replenished.
Altagas is devoted to paying out 50-60% of its cash flow as the dividend. Moreover, the dividend is largely backed by long-term contracted cash flow. Altagas’s investment-grade balance sheet also helps.
Altogether, Altagas should be able to maintain its dividend.
This first appeared as 1 of 3 top US dividend ideas for September 2017 in the Seeking Alpha Marketplace service DGI Across North America.
Open Text Corp. (TSX:OTEX)(NASDAQ:OTEX) is a mid-cap technology company, which has been growing by acquisitions in the expanding industry of enterprise information management. It is a global leader that offers software applications and cloud services in managing data.
Source: August presentation (pdf)
Shares Experienced a Meaningful Dip
The stock has dipped about 15% on the Toronto Stock Exchange since April. This is partially because of a stronger Canadian dollar against the USD, as the company reports in USD. So, interested Canadian investors should take advantage of a stronger loonie and pick up some shares for technology exposure.
For U.S. or Canadian investors, the stock offers above-average growth (and dividend growth) at a low multiple. At ~US$32.30, it trades at a multiple of roughly 15 and a forward multiple of roughly 13, which is attractive for the analyst consensus’s estimated 3-5 year earnings per share growth rate of 19.7% for the company.