Canada Markets close in 2 hrs 6 mins

3 Stocks That Will Pay You More Dividends Than RBC (TSX:RY)

Adam Othman
Increasing yield

Investors gravitate towards Canadian banks, and with good reason. As few of the most stable banks in the world and generous dividend providers, they make for excellent long-term stocks — stocks you can “bank” on. And, of course, the first stock that draws the eyes of the investors is the king itself: Royal Bank of Canada — a bank that possesses every significant attribute that makes the country’s banking sector stand out.

But if you want to explore more investment options, there are other stable and attractive ones in the market — Dividend Aristocrats with juicier yields than Royal Bank’s 3.86%. TC Energy, Emera (TSX:EMA), and Exchange Income are three stocks to consider for higher yields.

A large pipeline company

TC Energy owns and operates one of the largest natural gas pipeline networks in North America, spanning 92,600 kilometres. The company has a 4,900-kilometre liquid pipelines and electricity production capacity of 6,000 MW. TC Energy has steady cash flows, and it’s banking on its ongoing projects for better future profitability — projects like Keystone XL, NGTL, and Bruce Power Life extension.

The company is stable, relative to the market, with a beta of 1.04. TC Energy’s operating margin of 45% is better compared to the overall sector. This year has been especially fruitful for the company’s growth, with the market value up by 38%. Currently, the company is trading at $67.2 per share. The yield of 4.43% is also an attractive attribute to consider TC Energy as a potential investment.

Clean energy company

Emera is an energy company with a focus on clean electricity production. It focuses on zero-emission renewables like wind, hydro, and solar, as well as low-emission sources like natural gas. With its eye on a cleaner and sustainable future, the company’s growth potential seems high. Emera operates in Canada, the U.S., and four Caribbean countries.

The company has well earned its title of a Dividend Aristocrat by increasing dividends for 12 consecutive years. The current yield of 4.45% is also a significant scale up from Royal Bank. But the dividend yield isn’t the only factor that makes Emera an attractive investment. Its impressive history of growth is also worth considering. In the past five years, the company has grown its market value by 40%, including this year’s sizeable increase of 22%.

But even at a conservative estimate, the company stands at a chance 8% growth a year, all the while handing out increasingly generous payouts.

An acquisition-oriented company

If you are thinking about diversifying your portfolio, the adequately diversified company, Exchange Income, might prove to be a fantastic stock. Exchange income focuses on acquiring aerospace and aviation-based businesses, and it has created a well-balanced portfolio of many such companies. This acquisition policy has played out very well for the company and investors.

The company’s five-year growth is a whopping 92%. Even if the company underperforms a bit, it stands at a chance of doubling its investors’ money in the next seven years. And the cherry on top is the yield of 5.15%, with a prestigious payout history of increasing dividends for nine consecutive years.

Foolish takeaway

Stability, growth, and dividends payouts — three common attributes that almost every long investor should consider before choosing stocks. The stocks mentioned above provide the right mix of all three traits, maybe even an edge better than the Royal Bank.

More reading

Fool contributor Adam Othman has no position in any of the stocks mentioned.

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2019