Last week, we discussed a more aggressive industrial stock with the kind of substantial dividend yield usually associated with finance or utility stocks. (View the post: How an industrial stock sustains a strong dividend yield.) Today we look at another dividend stock you could hold in the more aggressive portion of your portfolio.

Investors generally look to aggressive stocks for capital gains and to more conservative stocks, like banks and utilities, for income. Yet there are a number of aggressive stocks that also pay a regular dividend. Some even have dividend yields that are as high — or even higher — than yields on more established companies.

(An aggressive dividend-paying stock that we analyze in our Stock Pickers Digest newsletter had a remarkable rise last year—while most of the stocks in its industry were lagging. I’ll give you the details a little further on.)

A dividend is a welcome bonus in aggressive investing—but focus on quality

As with conservative dividend-paying stocks, aggressive dividend stocks offer investors a measure of security. Dividends, after all, are much more stable than earnings projections. More important, dividends are impossible to fake—either the company has the cash to pay them or it doesn’t.

However, it’s important to avoid judging a company based on the fact that it pays a dividend. Nor should you be tempted solely by a high dividend yield (the percentage you get when you divide a company’s current yearly payment by its share price).

That’s because high yield can sometimes be a danger sign rather than a bargain. For example, a dividend stock’s yield could be high simply because its share price has dropped sharply (since you use a company’s share price to calculate yield). That drop may signal coming bad news.

As well, you should always remember that while aggressive stocks hold the potential for greater gains than conservative selections, they expose you to a higher level of risk — even if they are dividend stocks.

That’s why we recommend that you look beyond dividend yield when making investment decisions, and look for dividend stocks that have established a business and have at least some history of building revenue and cash flow.

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Dividend stocks: This aggressive stock rose more than 200% for us in the past year

Trilogy Energy (symbol TET on Toronto; www.trilogyenergy.com) owns oil and gas properties in the Kaybob and Grande Prairie areas of central Alberta. About 74% of Trilogy’s production is natural gas. The remaining 26% is oil.

Trilogy continues to bring new wells into production and expects to push its average daily production to over 40,000 barrels a day in 2012. The company pays a monthly dividend of $0.035, which gives it a yield of 1.1%.

Over the course of the past year—a year in which many energy stocks sagged—the shares of Trilogy gained 210.8% for our Stock Pickers Digest readers. We will continue to update our advice on Trilogy and whether or not its shares can continue to rise.

If you’re looking for dividend stocks that suit the more aggressive portion of your portfolio—stocks that have the potential for gains of 50% or more in 6 months or less as well as providing income—you really should subscribe to Stock Pickers Digest.

The latest issue of Stock Pickers Digest gives you our full analysis, including clear buy/sell/hold advice, on 20 stocks that you can hold in that part of your portfolio you devote to aggressive investing. What’s more, you can save $50.00 off regular annual subscription rate as a new subscriber. Click here to learn how.

The company gets 65% of its sales from consumers. Businesses, such as restaurants, account for the remaining 35%.

The company’s sales fell 3.5%, from $12.0 billion in 2007 to $11.6 billion in 2008. That’s because ConAgra sold its commodity trading operations. Sales rebounded to $12.7 billion in 2009, but fell 5.1%, to $12.1 billion, in 2010. Sales rose to $12.3 billion in 2011, thanks to acquisitions and price increases.

Earnings fell from $1.35 a share (or a total of $683.8 million) in 2007 to $1.06 a share (or $518.7 million) in 2008. Earnings improved to $1.75 a share (or $761.0 million) in 2011.

Unlike Heinz, ConAgra prefers to focus on the U.S., which accounts for 90% of its sales. Recently, it tried to buy rival food company Ralcorp Holdings Inc. (New York symbol RAH) for $7.7 billion. Buying Ralcorp would have made ConAgra the third-largest packaged food maker in the U.S. However, ConAgra dropped its bid after Ralcorp moved ahead with its plan to spin off its cereals business.

Lower costs will support dividend

Meanwhile, ConAgra continues to cut costs, mainly by closing older plants, streamlining its distribution network and selling slow-growing, low-margin businesses. These savings will let it keep raising its annual dividend. The current rate of $0.96 yields 3.8%.

ConAgra’s long-term debt of $2.9 billion is a manageable 28% of its market cap. It holds cash of $1.1 billion, or $2.64 a share.

The company will probably earn $1.79 a share in fiscal 2012. The stock trades at 14.0 times that estimate.

ConAgra is a buy.

DRIPs also eliminate the nuisance effect of receiving small cash dividend payments. Second, some DRIPs let you reinvest your dividends in additional shares at a 5% discount to current prices. Third, many DRIPs also allow optional commission-free share purchases on a monthly or quarterly basis.

Generally, investors must first own and register at least one share before they can participate in a DRIP. Registration will generally cost $40-$50 per company. The investor must then notify the company that he or she wishes to participate in the company’s DRIP.

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There are also separate dividend reinvestment plans available through most discount brokers (known as “synthetic DRIPs”). The bookkeeping is simpler with these DRIPs. Under these plans, brokers will reinvest dividends on shares that you hold in your account. Not all your dividend stocks may be eligible for these plans.

Overall, we think that dividend reinvestment plans are okay to participate in. But here are a few things to keep in mind:

• Many investors make their investment choices solely on the basis of the existence of the DRIP option. We think the availability of a DRIP is only a bonus, rather than a reason to invest by itself. Investing only in stocks that offer DRIPs limits both investment choice and opportunity.
• The advent of the low-cost discount brokerage and online investing has reduced the commission cost of investment trades. Thus, the commission-free investing that DRIP investing allows is less of an advantage today than it was in the past.
• Taxes are still payable on dividends that are reinvested.

Most companies that offer DRIPs provide details on their web sites. Another place to look for information is the inside back cover of most companies’ annual reports. You can also contact the investor relations department of companies you wish to invest in.

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Heinz’s sales rose 18.9%, from $9.0 billion in 2007 to $10.7 billion in 2011 (fiscal years end April 30).

Earnings rose 16.6%, from $791.6 million in 2007 to $923.1 million in 2009. Earnings per share rose 21.8%, from $2.38 to $2.90, on fewer shares outstanding. Unfavourable foreign-exchange rates cut Heinz’s earnings to $914.5 million, or $2.87 a share, in 2010. In 2011, earnings rebounded to $991.9 million, or $3.08 a share.

The company’s sales continue to increase in fast-growing markets, like China and Brazil. It now gets two-thirds of its sales from outside the U.S.

Heinz continues to expand its international presence. Recently, it paid $165 million for privately held Foodstar, a leading soy sauce maker in China. In addition, Heinz recently bought 80% of Brazil’s leading maker of tomato pastes, sauces and condiments for $493.5 million.

Fast-growing markets such as China, India and Russia accounted for 16.2% of Heinz’s sales in fiscal 2011. The company aims to raise this to 25% by 2016, and eventually to 35% to 40%.

New packaging gives Heinz an edge

In addition to its international expansion, Heinz plans to spur its sales with innovative new products and packaging. For example, it recently replaced its fast-food ketchup packet with a new, easier-to-use plastic container called Dip & Squeeze. Major fast-food chains, like McDonald’s and Dairy Queen, have already switched to the new package. Consumers can also buy 10 packs of Dip & Squeeze ketchup in retail stores.

Heinz has also put together a new restructuring plan to further improve its profitability. Under this plan, the company will close five of its 81 factories and cut 3% of its workforce.

The restructuring will cost Heinz $0.35 a share. However, the plan should add $0.15 a share to its annual earnings, starting in fiscal 2013. These savings will help Heinz absorb rising costs for corn, wheat and other ingredients.

The company’s strong balance sheet will let it keep making acquisitions and investing in new products. Its long-term debt of $3.9 billion is a moderate 23% of its market cap. Heinz holds cash of $677.7 million, or $2.11 a share.

The company will probably earn $3.33 a share in fiscal 2011. The stock trades at 15.9 times that figure.

Heinz continues to raise its dividend annually. The current rate of $1.92 a share yields 3.6%.

Heinz is a buy.

WELLS FARGO & CO. $26 (New York symbol WFC; Conservative Growth Portfolio, Finance sector; Shares outstanding: 5.3 billion; Market cap: $137.8 billion; Price-to-sales ratio: 1.7; Dividend yield: 1.8%; TSINetwork Rating: Average; www.wellsfargo.com) provides a wide variety of financial services through roughly 9,000 branches in the U.S. It also operates in Canada, the Caribbean and Central America. Warren Buffett’s Berkshire Hathaway holding company owns 7% of Wells Fargo’s shares.

In the quarter ended September 30, 2011, Wells Fargo earned $4.1 billion, up 21.4% from $3.3 billion a year earlier. Earnings per share rose 20.0%, to $0.72 from $0.60, on more shares outstanding. More clients are repaying their loans on time. As a result, loan-loss provisions fell 47.4%, to $1.8 billion from $3.4 billion. That was the main reason for the earnings increase.

Even so, revenue fell 6.0%, to $19.6 billion from $20.9 billion. That’s largely because Wells Fargo is getting less interest income from borrowers due to today’s low interest rates. As well, it has a smaller investment banking business than J.P. Morgan (see below), so it is more reliant on traditional lending.

Wells Fargo should earn $2.82 a share in 2011. It trades at 9.2 times that estimate. The $0.48 dividend yields 1.8%.

Wells Fargo is still a hold.

J.P. MORGAN CHASE & CO. $34 (New York symbol JPM; Income Portfolio, Finance sector; Shares outstanding: 3.9 billion; Market cap: $132.6 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.9%; TSINetwork Rating: Average; www.jpmorganchase.com) is one of the world’s largest financial-services companies, with 5,400 retail bank branches in the U.S. It also offers credit cards, wealth-management and investment-banking services.

In the three months ended September 30, 2011, Morgan earned $4.3 billion, down 3.5% from $4.4 billion a year earlier. However, earnings per share rose 1.0%, to $1.02 from $1.01, on fewer shares outstanding. If you exclude unusual items, such as costs to settle lawsuits related to subprime mortgages, Morgan would have earned $0.97 a share in the latest quarter.

Revenue fell 0.3%, to $23.76 billion from $23.82 billion. Loan-loss provisions fell 25.2%, to $2.4 billion from $3.2 billion. However, the latest figure is up from $1.8 billion in the second quarter of 2011.

The stock trades at just 7.4 times Morgan’s likely 2011 earnings of $4.59 a share. That low p/e ratio reflects slowing earnings at the company’s securities-trading operations, plus falling advisory fees as business clients focus on managing their current operations instead of pursuing acquisitions. The $1.00 dividend still seems safe, and yields 2.9%.

J.P. Morgan is still a hold.

Food safety is a sensitive issue in China, and Wal-Mart is co-operating with local officials. That should prevent any permanent damage to its brand, and limit any loss of its Chinese market share.

Wal-Mart is a buy.

VISA INC. $90 (New York symbol V; Conservative Growth Portfolio, Finance sector; Shares outstanding: 816.9 million; Market cap: $73.5 billion; Price-to-sales ratio: 8.3; Dividend yield: 1.0%; TSINetwork Rating: Above Average; www.visa.com) continues to profit as more consumers pay for their purchases with credit and debit cards instead of cash or cheques. The company processes credit, debit, prepaid and commercial payments under the Visa, Visa Electron, Interlink and PLUS brands.

As a result, the company has raised its quarterly dividend by 46.7%, to $0.22 a share from $0.15. The new annual rate of $0.88 yields 1.0%.

This is the third time the company has raised its dividend since it became a public company in March 2008.

Visa is a buy.

AMEREN CORP. $31 (New York symbol AEE; Income Portfolio, Utilities sector; Shares outstanding: 241.7 million; Market cap: $7.5 billion; Price-to-sales ratio: 1.0; Dividend yield: 5.2%; TSINetwork Rating: Average; www.ameren.com) sells electricity and natural gas to 3.4 million customers in Illinois and Missouri.

The company recently raised its quarterly dividend by 3.9%, to $0.40 a share from $0.385. The new annual rate of $1.60 yields 5.2%.

However, Ameren generates two-thirds of its power by burning coal. To comply with tougher environmental standards, it will switch to low-sulphur coal. This move will increase its operating costs. Moreover, regulators will probably reject the company’s proposed electricity and gas rate hikes.

Ameren is a hold.

However, we feel high-quality information providers like these three will adapt and thrive. All three are market leaders, and they own some the industry’s best-known brands. What’s more, they are building strong Internet businesses of their own, and doing a good job of controlling their costs. These moves will help them increase their earnings, and give them more cash for dividends.

THOMSON REUTERS CORP. $29 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 836.8 million; Market cap: $24.3 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.5%; TSINetwork Rating: Above Average; www.thomsonreuters.com) has two main divisions: Markets (which supplied 57% of Thomson Reuters’ 2010 revenue and 48% of its earnings), sells news and information products to banks and other financial institutions. Professional (43%, 52%) sells information to professionals in the legal, taxation, accounting and scientific research fields.

Thomson Reuters recently said it plans to sell its healthcare business, which sells data and software that helps hospitals, clinics and health-care professionals cut costs and reduce fraud. In 2010, this division accounted for $450 million, or 3%, of the company’s revenue of $13.1 billion (all amounts except share price and market cap in U.S. dollars).

Thomson Reuters may use proceeds from the sale to make more acquisitions, particularly in developing markets, where demand for reliable information is growing quickly.

For example, in May 2011 the company bought Mastersaf, a Brazilian firm whose software helps businesses comply with increasingly complex tax and accounting laws. In all, Thomson Reuters spent $733 million buying other related companies in the first half of 2011.

These acquisitions are part of the reason why the company’s revenue rose 7.2% in the quarter ended June 30, 2011, to $3.4 billion from $3.2 billion a year earlier. Earnings rose 26.5%, to $429 million, or $0.51 a share, from $339 million, or $0.41.

These earnings exclude one-time costs related to Thomson Corp.’s 2008 merger with the U.K.-based Reuters news agency. To date, the the merger has let the company cut its annual costs by $1.54 billion, mainly by closing overlapping operations. It expects to reach its goal of $1.7 billion in annual savings when it finishes integrating Reuters by the end of 2011.

Thomson Reuters is in a good position to make more acquisitions. Its long-term debt of $7.0 billion is a manageable 29% of its market cap. It holds cash of $713 million, or $0.85 a share.

Investors are concerned that the European debt crisis and the weak U.S. economy will prompt the company’s biggest clients to cut spending on information products. That fear has hurt the stock, and it now trades at 14.1 times the $2.02 U.S. a share that the company will probably earn in 2011. That’s a reasonable p/e ratio in light of Thomson Reuters’ long-term earnings prospects.

Thomson Reuters is a buy.

TRANSCONTINENTAL INC. $12 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 81.0 million; Market cap: $972.0 million; Price-to-sales ratio: 0.5; Dividend yield: 4.5%; TSINetwork Rating: Average; www.transcontinental.com) is the largest commercial printer in Canada, and the fourth-largest in North America. Its printing operations provide two-thirds of its revenue.

The remaining third comes from publishing over 170 newspapers and magazines. The publishing division also has over 1,000 web sites, which will become more important to Transcontinental’s growth in the next few years as advertisers spend more on the Internet than print products.

In the quarter ended July 31, 2011, the company’s revenue rose 2.3%, to $492.6 million from $481.3 million a year earlier. It has won a number of new printing contracts, including an expanded deal to print The Globe and Mail.

Transcontinental recently swapped its printing operations in Mexico for six printing plants in Canada. Excluding the Mexican plants’ contribution and other unusual items, the company would have earned $32.8 million, or $0.40 a share, down 1.8% from $33.4 million, or $0.41 a share, a year earlier. The decline was due to the strong Canadian dollar, which hurt the contribution from the company’s international operations.

Transcontinental’s long-term debt of $642.2 million is a high 66% of its market cap. However, its debt is down 9.9% from $712.9 million on October 31, 2010. The company also holds cash of $60.8 million, or $0.75 a share.

The stock trades at just 6.4 times the $1.88 a share that Transcontinental should earn in fiscal 2011. That low p/e ratio mainly reflects investor concern that the slowing economy will hurt the company’s advertising revenue.

However, Transcontinental gets 40% of its revenue from less-cyclical clients, such as supermarket chains. As well, it gets more than half of its printing revenue from customers whose contracts range from one to 18 years.

Transcontinental is a buy.

TORSTAR CORP. $8.97 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.5 million; Market cap: $713.1 million; Price-to-sales ratio: 0.5; Dividend yield: 5.6%; TSINetwork Rating: Above Average; www.torstar.com) publishes The Toronto Star, which is Canada’s largest daily newspaper by circulation. The company also publishes three other daily newspapers and over 100 weeklies, mainly in southern Ontario. Torstar’s newspaper business accounts for about 70% of its revenue and 60% of its earnings.

The company’s other main business is wholly owned Harlequin Enterprises Ltd., the world’s leading publisher of romance novels.

Torstar recently received $291.6 million from the sale of its 20% stake in CTVglobemedia to BCE Inc. (Toronto symbol BCE). CTVglobemedia owns CTV Television and other broadcasting businesses.

Torstar used most of this cash to pay off its long-term debt. It still has $137.3 million of loans due within one year. That’s equal to 19% of its market cap. However, it will likely take advantage of today’s low interest rates and convert some of these loans to long-term debt.

Thanks to its lower debt levels, Torstar’s interest costs fell 69.3% in the three months ended June 30, 2011, to $2.0 million from $6.6 million a year earlier. That helped push up its earnings by 25.7%, to $38.2 million, or $0.47 a share (excluding the gain on the CTVglobemedia sale). It earned $30.4 million, or $0.39 a share, a year earlier. The company’s revenue rose 4.2%, to $393.3 million from $377.6 million.

Earnings were flat at Torstar’s media operations, because savings from last year’s restructuring offset slow advertising sales at its newspapers.

Harlequin’s earnings fell 21.4%. However, that’s because this subsidiary is now selling more electronic books than printed books. As a result, retailers are returning more unsold printed books to Harlequin.

Torstar will probably earn $1.65 a share in 2011. The stock trades at just 5.4 times that figure.

Torstar is a buy.

In its 2012 first quarter, which ended June 30, 2011, Peller’s sales rose 7.7%, to $69.4 million from $64.5 million a year earlier. The company launched a number of new products, and is seeing rising demand for its more-profitable premium brands. That offset higher taxes on wines sold in its Ontario stores and slower sales of its home winemaking kits.

Peller’s earnings fell 2.3%, to $3.9 million from $4.0 million. Earnings per share were unchanged at $0.28. The drop was mainly due to losses on hedging contracts that the company uses to lock in foreign-exchange rates. If you exclude all unusual items, earnings would have jumped 26.9%.

Andrew Peller is a buy.

BCE INC. $38.22 (Toronto symbol BCE; Shares outstanding: 777.1 million; Market cap: $30.3 billion; TSINetwork Rating: Above Average; Dividend yield: 5.4%; www.bce.ca) is Canada’s largest provider of telephone, Internet and wireless services. It also sells wireless and satellite-TV services across Canada.

In the three months ended June 30, 2011, BCE’s earnings per share rose 10.3%, to $0.86 from $0.78. Revenue rose 11.6%, to $5.0 billion from $4.4 billion a year earlier. Revenue fell 2.0% at the wireline division, which accounts for 53% of total revenue. This division, which includes BCE’s traditional land-line business, faces rising competition. As well, many customers are cancelling their land lines and switching to wireless devices.

Revenue from wireless services (26% of total revenue) rose 6.1%. The company’s recent network upgrades continue to attract new subscribers and prompt existing customers to upgrade their mobile-phone plans. BCE is also benefiting from rising use of smartphones, which generate higher monthly fees.

The stock has gained 16% in the past year, but it still trades at just 12.6 times BCE’s forecast 2011 earnings of $3.03 a share. There is also potential for further dividend increases.

BCE is still a safety-conscious buy.

Even with higher oil prices, Pengrowth’s cash flow per share fell 23.3% in the three months ended June 30, 2011, to $0.46 from $0.60 a year earlier. However, that was mainly because wet weather, pipeline outages and forest fires in northern Alberta cut its average daily production by 4.3%, to 72,288 barrels of oil equivalent (including natural gas) from 75,572 barrels.

Pengrowth is using some of the cash from its conventional properties to expand into more risky areas, such as oil sands and shale gas. Still, these projects have strong long-term potential, and their cash flows will help Pengrowth maintain its high 9.1% dividend yield.

The company’s debt of $1.1 billion is a reasonable 36.7% of its market cap. It trades at 4.7 times its estimated 2011 cash flow of $1.95 per share.

Pengrowth Energy Corp. is still a buy.

ENERPLUS CORP. $25.11 (Toronto symbol ERF; Shares outstanding: 180.1 million; Market cap: $4.6 billion; TSINetwork Rating: Extra Risk; Dividend yield: 8.6%) produces an average of 75,483 barrels of oil equivalent per day (weighted 57% to natural gas and 43% to oil). Its properties are mainly in Alberta, Saskatchewan, B.C., North Dakota and Montana, as well as the Marcellus Shale, which passes through Pennsylvania, New York, Ohio and West Virginia.

In the three months ended June 30, 2011, Enerplus’ cash flow per unit fell 1.8%, to $0.54 from $0.55. However, that was mostly because unusually wet weather slowed drilling activity.

The company recently sold 91,000 acres of natural gas properties in the Marcellus Shale for $568 million U.S. It still owns 110,000 acres in the region. To take advantage of drilling opportunities on its land, Enerplus has raised its planned 2011 exploration and development spending by 18.5%, to $770 million from $650 million. By the end of 2011, it aims to produce an average of 81,000 to 84,000 barrels a day.

The company used some of the funds from the land sale to cut its debt. As a result, its long-term debt now stands at $420.0 million, down from $686.7 million at the end of 2010. It will put the rest of the sale proceeds toward its high exploration and development spending. Its long-term debt is now just 9.1% of its market cap.

Enerplus trades at 6.4 times its forecast 2011 cash flow of $3.90 a share. The shares yield 8.6%.

Enerplus Corp. is still a buy.