high dividend

Dividends often don’t get the respect they deserve, especially from beginning investors. That’s because a dividend stock’s yearly 3% or 5% yield may not seem impressive alongside yearly capital gains of 10%, 20% or 30% or more. Yet dividends are far more reliable than capital gains. So with today’s low interest rates, investors are paying more attention to dividend yields (a company’s total annual dividends paid per share divided by the current stock price). That’s why the high dividend yield of a company like Bell Aliant stands out....

Olympia Financial Group, $39.25, symbol OLY on Toronto (Shares outstanding: 2.5 million; Market cap: $99.1 million; www.olympiatrust.com), conducts most of its business through its wholly owned Olympia Trust Company subsidiary, which started up in September 1995. Rather than take deposits from customers and then make loans, Olympia Trust acts as a trustee and manages self-administered registered plans. It also acts as a registrar and transfer agent for companies listed on the Toronto stock market and administers employee stock purchase plans for corporations. In addition, Olympia Financial provides other services, such as foreign currency exchange. One of its divisions, Olympia Benefits, sells private health-service plans. Right now, Olympia only operates in Alberta, B.C., Saskatchewan and Manitoba. However, it has been granted a license to operate as a non-deposit-taking trust company in Quebec. That will let it expand its registered-plans and foreign-exchange businesses in that province....

Lexmark International, $21.60, symbol LXK on New York (Shares outstanding: 70.3 million; Market cap: $1.5 billion; www.lexmark.com), makes and services a wide range of printers. It also sells related consumable supplies, such as toner cartridges. Printers contribute about 23% of the company’s revenue. Supplies account for 70%, and services (including software licenses) provide the remaining 7%. In the three months ended September 30, 2012, Lexmark’s revenue fell 11.2% to $919.2 million from $1.03 billion a year earlier. The decline mainly came from weakness in Europe, a lower contribution from its international operations due to unfavourable foreign-exchange rates and its exit from the inkjet printer business....

Pat McKeough responds to many personal questions about specific stocks and other investment topics from the members of his Inner Circle. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for the Inner Circle. This week, one question from an Inner Circle member concerned a fund that holds gold stocks. The fund’s high distributions give it a substantial dividend yield. Pat examines whether it can sustain its yield and also looks at its policy of using call options to boost returns....

Natural gas prices hit a high of over $13 U.S. per thousand cubic feet in June 2008. But the economic slowdown, plus vast new shale gas discoveries, pushed prices down to a 10-year low of under $2 earlier this year. Since then, though, gas has rebounded to $3.70 U.S. per thousand cubic feet. There is still a lot of gas in storage, and rising prices are prompting many producers to restart wells they had shut down. However, utilities continue to switch to natural gas from coal to fuel power plants. That demand, plus the prospect of rising liquefied natural gas (LNG) exports, to countries like Japan, China and South Korea, could push prices higher. ARC RESOURCES $24.25 (Toronto symbol ARX; Shares outstanding: 307.0 million; Market cap: $7.4 billion; TSINetwork Rating: Speculative; Dividend yield: 5.0%; www.arcresources.com) produces oil and natural gas in western Canada. Its average daily production of 94,970 barrels of oil equivalent is weighted 62% to gas and 38% to oil....

Pat McKeough responds to many personal questions on investing in stocks and other investment topics from the members of his Inner Circle. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for the Inner Circle. This week, one Inner Circle member asked about one of the more recent energy stocks on the scene. This specialist in deep-sea drilling has only been in business for seven years, which gives it the advantage of having modern high-quality rigs that are in demand. Pat assesses the company’s ability to keep adding to its record backlog and maintain its high dividend yield....

Automodular Corp., $2.00, symbol AM on Toronto (Shares outstanding: 20.4 million; Market cap: $40.8 million; www.automodular.com), assembles car and truck components, such as instrument panels, engines and rear suspensions. The company operates two plants in Oakville, Ontario, that assemble components for its one remaining automotive customer: Ford Motor Company at its Oakville Assembly Plant. Automodular closed its plant in Oshawa in 2010 after it lost its contracts with General Motors of Canada, which switched to a U.S. supplier after Automodular refused to sharply cut its prices. These contracts, to supply parts for the Camaro made at GM’s Oshawa plant, accounted for roughly 20% of Automodular’s business....

BROOKFIELD RENEWABLE ENERGY PARTNERS L.P. (Toronto symbol BEP.UN; brookfieldrenewable.com) owns 170 hydroelectric generating stations, seven wind farms and two natural-gas-fired plants. In all, it has 4,909 megawatts of generating capacity. Roughly 35% of Brookfield Renewable’s generating capacity is in Canada, with another 45% in the U.S. and 20% in Brazil. The company sells virtually all of its power under agreements that are an average of 24 years in length....

These two Midwest utilities have risen sharply in the past year, mainly because their high dividend yields have attracted more income-seeking investors. However, both must spend heavily to comply with stricter environmental regulations. As well, regulators are less likely to approve rate increases due to the slow U.S. economy. We still like both, but we see only one as a buy right now. AMEREN CORP. $33 (New York symbol AEE; Income Portfolio, Utilities sector; Shares outstanding: 242.6 million; Market cap: $8.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 4.8%; TSINetwork Rating: Average; www.ameren.com) sells power and natural gas to 3.3 million clients in Illinois and Missouri. In the three months ended March 31, 2012, Ameren’s earnings fell 11.7%, to $53 million, or $0.22 a share. A year earlier, it earned $60 million, or $0.25 a share. These figures exclude unusual items, such as a recent writedown of a coal-fired power plant....

ANDREW PELLER LTD. (Toronto symbol ADW.A; www.andrewpeller.com) is Canada’s second-largest wine producer, after Vincor Canada. Peller operates wineries in B.C., Ontario and Nova Scotia. It also imports wines and sells home-winemaking kits. In its 2012 fiscal year, which ended March 31, 2012, Peller’s sales rose 4.3%, to $276.9 million from $265.4 million in fiscal 2011....