Here are five high-quality monthly dividend stocks. I bought four of them based upon their merits to grow their dividends and provide a reliable income stream.
Student Transportation (STUXF.PK)
In my opinion, STUXF.PK is a stock that should be on your shopping list this week. Student Transportation will begin initial trading on the NASDAQ on Tuesday, September 6th. The influx of new US dividend income investors is significant. The NASDAQ symbol, beginning September 6th, will be STB.
STUXF.PK CEO, Denis J Gallagher, stated the company's investor base currently is 15% from the US, Mr. Gallagher highlighted the potential increase in US shareholder interest with this excerpt:
Purchasing shares now may benefit from US dividend hungry investors beginning on September 6th. The company's basic business model is building school buses for the North American school systems.
Here is some key information on the company:
- The company pays a monthly dividend of 4.6-cents per share. This equates to a 55.2 cent annual dividend. Based upon STUXF.PK trading at $6.52 per share, the annual dividend yield is 8.46%.
- Page 5 of management's discussion highlights key financial data. The company is not profitable during the summer months, as children are not attending school. The company is aggressive in pursuing and acting on accretive acquisitions. These terms are highlighted in the financial statements as well.
- Here is a link to Student Transportation's dividend tax info.
ARC Resources Ltd. (OTC:AETUF)
ARC Resources is focused upon creating shareholder value. Its key internal policy is to manage risks, maintain a flexible balance sheet, and create shareholder value. ARC is a Canadian top-tier conventional oil and gas production company. Its business model is to focus upon long-life oil and gas assets. The focus is upon assets located in western Canada.
Arc Resources is conservatively managed to provide stability, growth, and a sturdy balance sheet during all economic environments. Here are a few key financial issues:
- Arc Resources currently pays a 10-cent per month dividend. This equates to a $1.20 annual dividend.
- The company provided a 13.1% total annualized rate-of-return over the past two years in comparison to the S&P 500’s 4.7% return.
- US tax information can be found on the website.
Potential investors can view page 8 of the company’s July presentation for total investment returns. The presentation provides further analysis on management’s desire to grow assets, pay dividends, and provide year-after-year positive investor returns.
Below is a 10-year table with analysts projections for dividend and earnings growth. The stock currently trades at $24.02. The $1.20-annual dividend provides investors a 5% annual dividend.
Enerplus Corporation (ERF)
ERF started, in 1996, as Canada’s first oil and gas royalty trust. ERF converted to a corporation beginning January 1st, 2011. This was due to Canada’s tax law changes. Currently Enerplus possesses the current financial details:
- The current monthly dividend is 18-cents. This amounts to an annual $2.16 dividend. Based upon ERF’s closing price of $28.62, the stock provides a 7.5% annual yield.
ERF has a diverse energy portfolio focused upon western Canada and in the US. The western Canada properties have a long-life expectation. ERF management has intentionally accumulated concentrated assets in the Bakken and Marcellus areas. These will provide Enerplus future growth in revenues and free cash flow. Page 4 of a August 16th, 2011 presentation highlights the key locations for ERF production growth:
ERF has anticipated 2012 oil and gas production will increase by 10-15% from current levels.
Baytex Energy Corp. (BTE)
Baytex is a growth and income corporation. The company converted from a trust to a corporation. Its business model is to grow organically and also deliver a growing stream of dividends. The 2-year return has been an impressive 42.5% vs. the S&P 500’s 4.7% return.
Essential BTE data includes the following issues:
- BTE pays a 20-cent per month dividend. This amounts to a $2.40-per year dividend, equaling a 4.8% yield. This is calculated on today’s closing price per share of $49.75.
- US investor tax information can be located on Baytex’s website.
- BTE’s business model is to grow organically 8% per year. The focus is to pay 40-50% in dividends of funds from operations.
- The stock has 83% of current production deriving from oil extraction. 91% of reserves are in oil projects. The management team has focused upon oil exploration and production to increase shareholder value.
The stock, and previously a trust, has performed very well since inception. The growth and income strategy fit perfectly with my desire to receive a decent yield with the potential for even higher dividends in the future. Its stock performance backs up management’s goals.
Bayeux has a strong Canadian ownership base (68%) and a strong Canadian institutional ownership (51%) base. Typically these investors are patient and willing to let projects develop.
Pembina Pipeline Corporation (OTC:PBNPF)
Pembina is a conservatively operated pipeline. The company has been in operational for 50-years.
Key issues to consider prior to investing in Pembina include the following:
- Pembina has provided shareholders a 29.7% 2-year total annualized rate of return. This significantly outpaced the S&P 500’s 4.7%.
- Monthly dividends are 13-cents per share. Based upon a Pembina stock price of $26.04, the dividend yield is 6% per year.
- US investor tax information can be found on Pembina’s website.
Pembina is involved with the transport, midstream, and related duties associated with heavy oils, gas services, and Canadian oil sands.
Pembina has four intertwined business units. All four are located in Alberta and north eastern British Columbia. The main objective is to provide safe and reliable services to Pembina's customers. The company acts in an efficient and environmentally sensitive process for all Canadians.
Pembina management has stated its clear intention to diversify outside of the Alberta and British Columbia. This will diversify its asset base and provide projects for additional growth.