In terms of top dividend stocks I continue to tout, I’ve got a couple of names to discuss here that still look like solid buying opportunities this month.
These are both companies that have been on a nice run of late, but it’s one I think can continue. Here’s why these two companies look like buying opportunities now, and why I think more long-term upside is to come.
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Fortis
My top dividend pick of them all right now, Fortis (TSX:FTS), is a utility giant with an attitude. This stock simply doesn’t know how to take a breather and has been running higher for most of the past two years.
What a nice chart to look at (above).
Much of this recent rally can be tied to expectations that utility companies could be the ultimate winners from AI and electrification trends, which are currently capturing most investor mindshare. These are indeed some of the most important trends of our time, and if the buildout schedule is correct, we’re going to need a lot more power all across North America.
As a powerhouse with more than 3 million customers in Canada, the U.S. and the Caribbean, Fortis has a durable business model creating very robust cash flows the company delivers back to investors. Indeed, with more than five consecutive decades of dividend hikes, this is among the best dividend growth stocks investors can get their hands on right now.
Now, the company’s current yield has been pushed lower thanks to its recent stock price rise. But at around 3.3%, investors are getting bond-like income with some serious capital appreciation upside that most fixed income products cannot provide. In this environment, it’s hard to ignore the sort of long-term total return potential of a giant like Fortis, and I’m going to continue pounding the table on this name moving forward.
Whitecap Resources
In the energy sector, Whitecap Resources (TSX:WCP) is my top pick as a way for investors to generate monthly income (and significant capital appreciation) over time.
Whitecap Resources cranks out a juicy 5.4% dividend yield, making it a cash machine for income chasers in the energy patch. This light oil producer focuses on low-decline assets in Western Canada, boasting top-tier declines under 10% thanks to optimized batteries and secondary recovery. These trends should keep production steady without endless drilling.
Indeed, last year’s results were strong. The company posted robust free funds flow, with dividends hiked multiple times amid oil at $70–80. Accordingly, with oil prices on the rise, I’d expect to see even more capital appreciation down the road, as retirees and plenty of younger investors look for cash flow machines like WCP stock.
Again, this is a monthly dividend payer, so investors get regular and consistent (and growing) income each month. That’s a thesis I think investors can understand, particularly with the geopolitical trends in place, which support fossil fuel production in North America.