Tag Archives: NYSE:BPY

Get a +5% Yield From This Stable Company

The main content for this article first appeared as 1 of 9 top Canadian dividend ideas for December 2017 in the Seeking Alpha Marketplace service DGI Across North America.

Brookfield Property Partners LP (TSX:BPY.UN)(NYSE:BPY) is a reasonably-priced stock in a fully-valued market. Now is an excellent opportunity to buy Brookfield Property (below ~CAD$28 per unit on the Toronto Stock Exchange and at ~US$22 on the New York Stock Exchange) for income.

office building with a friendly smiling cartoon character beside it

The Business

Brookfield Property owns and operates a global portfolio of real estate assets with a focus in North America. It has ~US$152 billion of assets under management, of which ~73% are in North America. Nearly 17% are in the United Kingdom and Europe, ~8% are in Australia and Asia, and <2% are in Brazil. It has 30 offices, around the globe, where it has ~250 investment professionals and ~16,000 operating employees to get the job done.

About 80% of its portfolio is in core office and retail assets, which targets total returns of 10-12%. The remainder of the portfolio is in opportunistic investments, which target higher returns of 18-20%.

The core portfolio focuses on generating stable cash flows, which help with paying its +5% yield. The opportunistic portfolio aims to invest in mispriced properties in multifamily, industrial, hospitality, triple net lease, self-storage, student housing, and manufactured housing sectors.

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3 Top Dividend Growth Stocks For Now

Are you looking for stable growing income? If so, you should have these stocks on your radar. They offer sustainable yields of 4.5-5.6% with dividend growth potential of at least 5% per year.

High-growth utility with a 4.5% yield

Algonquin Power & Utilities Corp (TSX:AQN)(NYSE:AQN) has returned about 24.6% on the TSX in the last 12 months. The utility offers a U.S. dollar-denominated dividend which benefits Canadian investors no matter if they opt to receive its dividend in the Canadian or U.S. currency. For U.S. investors, Algonquin offers above-average growth in the relatively stable utility space.

Algonquin continues to execute. In Q1, its adjusted earnings per share increased 19% and its assets grew 94% compared to Q1 2016.

These are thanks partly to its acquisition of Empire, which added 218,000 new water, gas, and electric utility customers to its portfolio, as well as 1,400 MW of regulated electrical power generation.

wind-power facility

Photo: warrenski. License: CC SA 2.0 Source: flickr

Algonquin also put in service 210MW of net power generation capacity, of which 160MW has 20 years of power purchase agreements, which implies stable cash flow generation from those facilities.

The utility offers an above-average yield with an above-average growth rate. Due partly to the strength of the U.S. dollar, Algonquin yields 4.5% and aims to grow its dividend by 10% a year.

Thomson Reuters analysts have a mean 12-month price target of C$14.20 on the stock. So, it’s fairly valued. Investors looking for stable, growing income can consider the shares today. However, weakness in the U.S. dollar will bring the yield down for Canadian investors. Investors looking for a margin of safety  should wait until a pullback to at least the low C$13 level.

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How to Double Your Money

Can you imagine doubling $10,000 to $20,000? Or perhaps you have a nest egg of $500,000 and want to double it to $1 million? No matter where you are in your financial journey, you can benefit from doubling your money.

To grow your money, you earn a rate of return from it. The return is calculated for every year. For example, if you save in a GIC or CD (depending if you’re in Canada or the U.S.), you earn a fixed rate of say 2% every year. So, if you place $1,000 in a GIC or CD, you’ll get $1,020 a year later. $1,000 was your principal and $20 was the interest you earned.

It doesn’t always work that way because instead of a maturity of one year, a GIC can mature in 3 months, 6 months, 9 months, 1.5 years, 2 years, 3 years, or 5 years. Your money is parked for that duration and you are guaranteed to retrieve your principal and interest.

You might notice that a 2% rate of return is too low for you to meet your goals. So, you turn to the stock market for higher returns. In contrary to what some would believe, the stock market is not a casino and it can be a safe way to double your money (and double your money again and again) if you know what to look for and what to expect.

First, let’s look at what contributes to total returns. Read More