high dividend

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). The best Canadian dividend stocks are responding by doing their best to maintain, or even increase, their payouts. That’s great news for Canadian investors. That’s because dividends are far more reliable than capital gains. More important, a dividend is a sign of investment quality. After all, dividends are impossible to fake — either the company has the cash to pay dividends or it doesn’t. What’s more, dividends can now contribute up to a third of your long-term investment return, without even considering the benefits of the dividend tax credit....

The German government recently announced that it plans to shut down all of its nuclear reactors by 2022. Germany’s decision is the result of anti-nuclear sentiment in the wake of the earthquake and tsunami in Japan, which damaged the reactors at the Fukushima nuclear plant. Right now, nuclear reactors supply about a quarter of Germany’s electric power. It’s doubtful that the country can replace that with wind and solar. What’s more likely is that Germany will have to increase its already large imports of electricity from France, where nuclear already accounts for about 80% of electricity generation....

Diebold Inc., symbol DBD on New York, is a leading maker of automated teller machines (ATMs). It also makes safes, vaults and building-security systems. Diebold recently raised its quarterly dividend by 3.7%, to $0.28 a share from $0.27. The dividend stock’s new annual rate of $1.12 yields 3.5%. The company has raised its dividend each year for the past 58 years. The company earned $2.5 million, or $0.04 a share, in the three months ended March 31, 2011. That’s down sharply from $24.9 million, or $0.37 a share, a year earlier. If you exclude costs related to the dividend stock’s restructuring and other one-time items, earnings per share fell 32.4%, to $0.23 from $0.34....

YAMANA GOLD $11.68 (Toronto symbol YRI; TSINetwork Rating: Speculative) (416-815-0220; www.yamana.com; Shares outstanding: 741.9 million; Market cap: $8.8 billion; Dividend yield: 1.5%) has raised its quarterly dividend by 50%, to $0.045 a share from $0.03 a share. This is the second time this year that the company has raised its payout: it increased its quarterly dividend by 50%, to $0.03 from $0.02, with the January 2011 payment. The new rate gives the shares a 1.5% yield. That’s a high dividend rate for a gold stock. By contrast, Barrick Gold yields 1.1%, Newmont Mining yields 1.5% and Goldcorp yields 0.9%. Yamana is also increasing its exploration budget. It will spend $105 million on exploration in 2011, up 23.5% from $85 million in 2010. Yamana expects to keep raising this spending in the following years. It could spend as much as $125 million on exploration in 2012....

YAMANA GOLD, $11.46, symbol YRI on Toronto, has raised its quarterly dividend by 50%, to $0.045 a share, from $0.03 a share. This is the second time this year that the company has raised its payout: it increased its quarterly dividend by 50%, to $0.03 from $0.02, with the January 2011 payment. The new rate gives the shares a 1.6% yield. That’s a high dividend rate for a gold stock. By contrast, Barrick Gold yields 1.1%, Newmont Mining yields 1.5% and Goldcorp yields 0.9%. Yamana is also increasing its exploration budget. It will spend $105 million on exploration in 2011, up 23.5% from $85 million in 2010. Yamana expects to keep raising this spending in the following years. It could spend as much as $125 million on exploration in 2012....

Verizon Communications Inc., symbol VZ on New York, owns 55% of Verizon Wireless, which is the largest wireless provider in the U.S.; U.K.-based Vodafone plc owns the other 45%. This business has 104 million customers in 50 states, and accounts for 63% of Verizon’s revenue. The remaining 37% comes from its wireline division, which sells local and long-distance telephone service to over 25 million customers in 28 states. The high dividend stock’s annual payout rate is $1.95 a share, for a yield of 5.2%. In the three months ended March 31, 2011, Verizon earned $0.51 per share, up 218.8% from $0.16 a year earlier. If you exclude costs related to the spinoff of a subsidiary and other unusual items in the year-earlier quarter, earnings per share would have risen 6.3%. Sales rose just 0.3%, to $27.0 billion from $26.9 billion a year earlier....

Today, many investors might not immediately recognize the name of master investor John Templeton. In the final quarter of the last century, however, Templeton was as famous and highly regarded as Warren Buffett is today. Templeton got his start as an investor during the 1930s Depression. At the time, he felt investors were way more pessimistic than the facts warranted. Instead of dwelling on negative predictions, Templeton focused his investing strategy on the low p/e ratios, high dividend yields and other value indicators he saw in the market. In 1939, Templeton famously ordered his broker to buy 100 shares of every New York Stock Exchange stock that traded for less than $1....

Oil now trades at around $110 U.S. a barrel. That’s up over 29% from $85 U.S. a year ago, and 175% higher than its low of $40 U.S. in February 2009. We think oil prices could rise even further if the global economy continues to rebound, as we expect. Even so, we continue to advise against overindulging in Canadian oil stocks. That’s because the Resource sector (including oil) is highly volatile, and no one can accurately predict future oil prices. However, you can profit nicely over long periods by investing a reasonable portion of your portfolio in well-established or well-managed Canadian oil stocks, especially those with high-quality reserves and rising production. These companies are well-positioned to profit during periods of high oil prices, and are able to at least partly offset price declines by producing more oil....

ARC RESOURCES LTD. $26.34 (Toronto symbol ARX; Shares outstanding: 275.9 million; Market cap: $7.3 billion; TSINetwork Rating: Speculative; Dividend yield: 4.6%; www.arcresources.com) produces oil and natural gas in western Canada. Its average daily production of 84,686 barrels of oil equivalent (including gas) is weighted 61% to gas and 39% to oil. In the three months ended December 31, 2010, ARC’s revenue rose 18.2%, to $329.3 million from $278.6 million a year earlier. Cash flow per share rose 10.0%, to $0.66 from $0.60. Increased production and higher oil prices pushed up results. The company has $803.6 million of debt. That’s a low 11.0% of its market cap. The shares trade at 8.8 times ARC’s forecast 2011 cash flow of $2.99 a share. It plans to spend $625 million on exploration and development this year, up 5.8% from 2010....

Investors generally look to aggressive stocks for capital gains and to more conservative stocks, like utilities, for income. However, there are some aggressive Canadian dividend paying stocks whose payouts are as high — or even higher — than more established companies. (We updated our buy/sell/hold advice on a high-dividend aggressive stock in the February 25, 2011, Stock Pickers Digest hotline. See below for further details.) ...