Yesterday, I’ve made my list of my favorite 5%+ yielder on the U.S. market. Finding solid companies paying high yields is a very difficult task. Many investors think they can simply pull out a filter including a 5 year history and some more metrics and they can build their portfolio by picking any stocks in this basket. This sounds a lot like the perfect recipe to suffer from dividend cuts in a few years from now!
Since I started Dividend Stocks Rock 5 years ago, I haven’t suffered a single dividend cut. This is mostly because I follow a strict investment process and follow each company quarterly. The following are examples of companies that meet my retirement rules.
Inter Pipeline (IPL.TO)
Inter Pipeline Ltd. is an energy infrastructure business engaged in the transportation, processing, and storage of energy products across western Canada and Europe. IPL is among the rare companies making our list of the top dividend energy stocks. The company operates four distinct business segments: Oil Sands Transportation, consisting of three pipeline systems; NGL Processing, including both natural gas and off-gas processing facilities; Conventional Oil Pipelines, consisting of 3,900 km of pipeline across three systems; and Bulk Liquid Storage.
Source: IPL Q3 2018 fact sheet
IPL stock has been down most of 2018. This is the case with many pipeline companies. However, you can see that it’s a “sector thing” as IPL just closed a record year with double-digit FFO increase for the year. Management increased its dividend significantly and still shows an FFO payout ratio well under control.
Polaris Infrastructure (PIF.TO)
Polaris Infrastructure Inc is a renewable energy company. It is engaged in the operation, acquisition, and development of renewable energy projects in Latin America. In fact, Polaris owns and operates San Jacinto Geothermal power plant in Nicaragua. PIF has a contractual price per MWh (Power Purchase Agreement or PPA) with the government including annual escalator through 2029. Management recently announced the acquisition of Union Energy Group Corp. This transaction will open the door for many hydro electric projects in Peru and will help PIF to diversify its business model.
