Canada markets closed
  • S&P/TSX

    19,062.91
    +345.79 (+1.85%)
     
  • S&P 500

    3,911.74
    +116.01 (+3.06%)
     
  • DOW

    31,500.68
    +823.32 (+2.68%)
     
  • CAD/USD

    0.7757
    +0.0062 (+0.81%)
     
  • CRUDE OIL

    107.06
    +2.79 (+2.68%)
     
  • BTC-CAD

    27,644.36
    +55.93 (+0.20%)
     
  • CMC Crypto 200

    462.12
    +8.22 (+1.81%)
     
  • GOLD FUTURES

    1,828.10
    -1.70 (-0.09%)
     
  • RUSSELL 2000

    1,765.74
    +54.06 (+3.16%)
     
  • 10-Yr Bond

    3.1250
    +0.0570 (+1.86%)
     
  • NASDAQ

    11,607.62
    +375.43 (+3.34%)
     
  • VOLATILITY

    27.23
    -1.82 (-6.27%)
     
  • FTSE

    7,208.81
    +188.36 (+2.68%)
     
  • NIKKEI 225

    26,491.97
    +320.72 (+1.23%)
     
  • CAD/EUR

    0.7347
    +0.0040 (+0.55%)
     

3 Under-$20 Dividend Stocks to Boost Your Passive Income

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
A close up image of Canadian $20 Dollar bills
A close up image of Canadian $20 Dollar bills

Written by Rajiv Nanjapla at The Motley Fool Canada

With inflation at a multi-decade high, the Federal Bank has increased interest rates and expects to raise them further in the coming months. The rising interest rate could increase borrowing costs, thus hurting the margins of growth stocks. So, given the uncertain outlook, investors could strengthen their portfolios by investing in quality dividend stocks.

If you are ready to invest, here are my three top picks that you can buy for under $20.

Algonquin Power & Utilities

Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) operates regulated utility assets and is also involved in renewable power production. Its solid underlying utility business, long-term power-purchase agreements, and strategical acquisitions generate stable and reliable cash flows. Supported by these robust cash flows, the company has raised its dividend for 12 years. It had increased its quarterly dividend by 6% to $0.2345/share earlier this month, with its forward yield currently at 5.1%.

Meanwhile, the company is continuing its capital investment program of $12.4 billion for the next five years, which could grow its rate base at a CAGR of 14.6%. The rate base growth could expand its adjusted EPS at a 7-9% annualized rate. So, the company is well positioned to continue its dividend growth in the coming years. Given its growth prospects, high dividend yield, and attractive NTM price-to-earnings multiple of 19.2, I believe Algonquin Power & Utilities would be an excellent addition to your portfolio.

Pizza Pizza Royalty

Supported by its highly franchised business model, Pizza Pizza Royalty (TSX:PZA) generates stable cash flows irrespective of the economic cycle. Meanwhile, with the easing of restrictions, the company has reopened its non-traditional restaurants and dining spaces, which could boost its walk-in sales. The company has restarted its restaurant development program and expects to increase its restaurant count by 5% this year.

Along with these initiatives, the company’s investment in strengthening its digital channels could continue to drive its sales. So, I believe Pizza Pizza Royalty’s dividend is safe. With a monthly dividend of $0.065/share, its forward yield stands at a juicy 6.22%. Meanwhile, the company’s NTM price-to-earnings stands at 15.3, making it an attractive buy.

NorthWest Healthcare Properties REIT

REITs must pay 90% of their net earnings to shareholders, thus making them a reliable source of stable passive income. So, I have picked NorthWest Healthcare Properties REIT (TSX:NWH.UN) as my third pick. Supported by its highly defensive healthcare portfolio, long-term agreements, and government-backed reliable tenants, the company’s occupancy and collection rate remain higher.

Also, its strategical acquisitions and inflation-indexed rent boost its cash flows, allowing it to pay a dividend at a healthy rate. With a monthly dividend of $0.0667, its forward yield stands at a juicy 6.18%.

Meanwhile, NorthWest Healthcare delivered three fully leased projects valued at around $103 million in the first quarter. It has around $306 million worth of projects under construction. It is also working on expanding its presence in Australia, the U.K., and the U.S. It also strengthened its liquidity position by raising approximately $174 million through new equity offerings. So, given its growth initiatives, stable cash flows, and strong balance sheet, I believe NorthWest Healthcare is well equipped to continue paying a dividend at a healthy rate.

The post 3 Under-$20 Dividend Stocks to Boost Your Passive Income appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Algonquin Power and Utilities?

Before you consider Algonquin Power and Utilities, we think you’ll want to hear this.

Our nearly S&P/TSX market doubling* Stock Advisor Canada team just released their top 10 starter stocks for 2022 that we believe could supercharge any portfolio.

Want to see if Algonquin Power and Utilities made our list? Get started with Stock Advisor Canada today to receive all 10 of our starter stocks, a fully stocked treasure trove of industry reports, two brand-new stock recommendations every month, and much more.

See the 10 Stocks * Returns as of 4/14/22

More reading

The Motley Fool has positions in and recommends PIZZA PIZZA ROYALTY CORP. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.

2022

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting