Written by Christopher Liew, CFA at The Motley Fool Canada
No investors have successfully timed the stock market. Even billionaire Warren Buffett hasn’t attempted it, because he knows it’s a waste a of time. However, you can still be successful, even with only $800. The key is to buy the smartest dividend stocks. Whether the market is surging or declining, the businesses will deliver.
Imperial Oil (TSX:IMO)(NYSE:IMO) is one of the most prolific income providers on the TSX. This dividend payer belongs to the select few that you buy today with no worries, regardless of the economic environment. The $29.44 billion crude oil and natural gas producer was established in 1880 and began paying dividends in 1881.
From that time on, Imperial Oil hasn’t missed a single dividend payment. Management also raised the dividend in each year since 1995 (26 years). It’s also an excellent time to take a position, given the red-hot performance of the energy sector in 2021.
At $41.79 per share, Imperial Oil investors enjoy a 76.92% year-to-date gain on top of the 2.35% dividend yield. Your overall return could be higher if the price continues to soar. The company is having a great year, posting an average $379 million in net income in Q1 and Q2 versus the average net loss of $357 million of the same quarters in 2020.
Overlooked Dividend Aristocrat
Most investors focus on the Big Six Canadian banks and overlook the Canadian Western Bank (TSX:CWB). Besides being a Schedule I bank, this lender is a super-regional bank. You can sit pretty once you own the asset, given CWB’s Dividend Aristocrat status.
The $3.34 billion bank has raised its dividends for 28 consecutive years. CWB has been steady since last year. It has returned 43.23% in one year and is up 35.72% year to date. Market analysts recommend a strong buy rating and forecast the price to climb from $37.90 to $41.92 (+10.6%) in the next 12 months.
CWB’s net income growth year to date in fiscal 2021 (nine quarters ended July 31, 2021) versus the same period in fiscal 2020 is 28%. Its president and CEO Chris Fowler said, “We continued to drive strong growth of lower-cost branch-raised deposits, and our quarterly loan growth remains at one of the strongest levels in our history.”
Management expects to end this fiscal year with a 20% growth in adjusted earnings per common share. Fowler credits CWB’s remarkable loan growth to prudent lending structures. Also, the bank is strongest in branch-raised deposits.
An industry with solid fundamentals
Automotive Properties (TSX:APR.UN) is an attractive option for income investors. Besides the high yield, Canada’s auto industry is resilient. The $496.92 million real estate investment trust (REIT) owns 66 automotive dealership properties that cater to the mass market segment or high-end buyers.
Because of the industry’s strong fundamentals, the rental business endured a downturn in 2020. Brisk sales are back, given the REIT’s operating results in the first half of 2021. From a net loss of $7.6 million last year, management reported $44.18 million in net income.
Moreover, it collected 100% of the rent due in July and August 2021. Automotive Properties trades at $12.72 per share and pays a generous 6.3% dividend if you invest today.
Canadians need only to choose reliable income providers for $800 in capital to produce income streams. The three dividend stocks in focus are the top choices for business resiliency and payout consistency.
For the first time ever, The Motley Fool has issued an official BUY alert on a cryptocurrency.
We’ve taken the exact same detailed analysis that we’ve used to find world-beating stocks like Amazon, Netflix, and Shopify to find what we believe will be the ONE cryptocurrency to rise above more than 4,000 cryptocurrencies.
Don’t miss out on what could be a once-in-a-generation investing opportunity.
Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends AUTOMOTIVE PROPERTIES REIT.