In what has proved to be a banner year for the US dollar, Canadian equity markets have lagged. Value-oriented investors looking to collect regular dividends while they wait for sentiment to shift should consider these 10 conservative picks.
In the prevailing low-yield environment, income-starved investors have piled into dividend-paying US equities for their superior current returns relative to bonds, pushing valuations on many of these stocks to frothy levels. Last issue, we highlighted opportunities for investors to scoop up high-quality Canadian dividend payers at bargain prices. This time, we shift our focus even further afield, to some of our favorite income-generating names that trade on the Australian Stock Exchange.
The past five years have been a golden age for energy-focused master limited partnerships (MLP). Fueled by access to inexpensive capital, elevated oil prices and rising demand for infrastructure to support the US energy renaissance, MLPs have posted impressive distribution growth and delivered huge returns since the bull-market rally began in spring 2009. However, past performance isn't predictive of future results. And with many MLPs trading at sky-high valuations, investors will need to be selective and avoid value traps.
Investors should regard any pullback related to the government shutdown and debate over raising the debt ceiling as an opportunity to establish or add names leveraged to the strengthening US economy.