high dividend

High interest rates boost bond yields—and their appeal with investors. Conversely, those high or rising rates can hurt the appeal of high-yield utilities, and their shares, since utilities are then forced to pay higher interest on their debt. However, with interest rates falling in Canada, and poised to fall in the U.S., the outlook for high-quality utilities is attractive for investors seeking high dividend yields and growth prospects.


Below we discuss two utilities ETFs....

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You can’t fake a record of dividends....

A: Global X SuperDividend ETF, $21.86, symbol SDIV on New York (Units outstanding: 35.1 million; Market cap: $767.3 million; www.globalxetfs.com), invests in 100 of the highest-yielding stocks worldwide.

Stocks in the fund’s portfolio are equally weighted with the aim of reducing the risk associated with high exposure to individual companies....

Insurers write policies, collect premiums from customers, and then invest those premiums to meet future claims. That need to cover claims means they invest significant amounts of their funds in fixed-income instruments, primarily bonds. That also means high interest rates are a boon to their returns....

The shares of oil and gas stocks remain high as energy demand stays strong. We continue to recommend that most investors maintain some exposure to the oil and gas industry as part of a balanced portfolio. But, to cut risk, you should stick with producers that have positive cash flow even in times of low energy prices....

High-quality utility stocks, with their high dividend yields and steady or rising income streams, tend to be sensitive to interest rate increases. TC Energy is no exception. The rise in interest rates in the past couple of years helped push its share price down nearly 30%.

The outlook for interest rates is still uncertain, but TC now offers an attractive buying opportunity, starting with its sustainable dividend yield of 7.4%....

You can’t fake a record of dividends....

You can’t fake a record of dividends....

A key aspect of our TSI investment philosophy is portfolio diversification across the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities).


That way, investors can avoid overloading their portfolios with stocks in one sector that are about to slump simply because of industry conditions or changes in investor fashion....