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Top High Yield Dividend Stocks on the TSX Index – The Motley Fool Canada

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High yield dividend stocks are attractive for a number of reasons. A higher yield leads to more income. This is important for those who rely on dividends to support their annual income. A high yield can also be an indication that the stock price is struggling, and is now trading at attractive valuations.

On the other hand, it can also be a warning sign that the dividend is about to be cut or that the company’s operations are not performing. These are high-yield traps. 

One way to avoid these traps is to invest in stocks that have an investment grade credit rating. A strong credit rating is important for a number of reasons. It allows companies to more easily access debt markets and negotiate favourable terms. In such ways, they are also less risky than those with a high debt-load and whose ratings are non-investment grade. 

With that in mind, here are the top high yield dividend stocks on the TSX Index with investment grade credit rating. For the purpose of this article, I will be using the Standard & Poor’s (S&P) long-term credit rating. 

An unlikely high grade dividend stock 

This one might surprise you. There are very few high yield dividend stocks that own a high grade S&P rating. In fact, the highest grade was AA and it belongs to Imperial Oil (TSX:IMO)(NYSEMKT:IMO). Now yielding well above historical averages (4.22%), Imperial Oil is establishing itself as the best oil stock on the TSX Index. 

Given that oil prices remain near multi-year lows, Imperial Oil’s rating is impressive. Oil and gas companies are cutting or suspending the dividend at an unprecedented pace. Low oil prices and COVID-19 mitigation efforts are having a significant impact on the industry. 

At one point, it appeared a forgone conclusion that all producers would either cut or suspend the dividend. Even Suncor, which is largely considered best-in-class, announced a 55% dividend cut. For its part, Imperial Oil kept the dividend steady, a testament to its strong balance sheet. 

As long as low oil prices persist, then no dividend in the sector is safe. However, Imperial Oil’s strong credit rating and financial situation has allowed them to extra time to navigate the current bear market. 

The highest yielding stock

Shifting focus, the company with the highest yield and an investment grade rating is Brookfield Property Partners (TSX:BPY.UN)(TSX:BPY). Brookfield Property currently yields north of 14% and has a BBB S&P credit rating. 

Of note, a BBB rating is in the lower medium grade tier, two notches away from losing investment-grade status. Although a little concerning, S&P has maintained a BBB rating on Brookfield Property Partners for a number of years. 

The biggest headwind facing Brookfield Property is the exposure to retail. The struggles began before COVID-19 and have only accelerated since. In the month of April, Brookfield Property collected just 20% of rents due from retail clients. 

On the bright side, parent company Brookfield Asset Management is stepping in with an assist. It is investing $5 billion to support retail in a bid to help them cover rent. In turn, this will benefit Brookfield Property Partners. 

Despite recent headwinds, this high yield dividend stock is committed to the dividend. According to CEO Brian Kingston, “We continue to have more than sufficient resources to pay our stated quarterly dividend.” 

Brookfield is largely considered a best-in-class name and Brookfield Property Partners dividend is likely one of the safest double-digit yields on the TSX Index. 

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Fool contributor Mat Litalien has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Brookfield Asset Management. The Motley Fool recommends BROOKFIELD ASSET MANAGEMENT INC. CL.A LV and Brookfield Property Partners LP.

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Telus skips Huawei, picks Ericsson and Nokia to build 5G network – Vancouver Sun

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Telus has opted to go with Ericsson and Nokia — skipping Chinese tech giant Huawei — to build its 5G network.

The Vancouver-based company announced Tuesday it had signed a deal with Sweden’s Ericsson and Finland’s Nokia to provide the components for its 5G network. No figures were given on how much the deal cost.

“Telus has a successful track record of building globally leading networks with amazing speeds, robust quality and extensive coverage that are consistently recognized as the best in the world,” Telus president Darren Entwistle said  in a statement.

“Our team is committed to rolling out superior network technology from urban to rural communities, fuelling our economy and driving innovation as we power Canadians into the 5G era through an unparalleled network experience.”

Entwistle promised in his statement the 5G boost would support post-pandemic economic recovery, virtual health, remote work and other practices now common as a result of COVID-19.

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Bell inks 5G equipment deal with Ericsson; leaves door open to Huawei – BNNBloomberg.ca

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MONTREAL – Huawei Technologies Inc.’s ambitions to be a player in Canada’s 5G network took a major hit Tuesday as two of the country’s three largest telecom companies announced partnerships with the Chinese tech giant’s European rivals.

Bell Canada announced Tuesday morning that Sweden-based Ericsson will be its second supplier of the radio access network equipment that has been Huawei’s main product line in Canada since entering the market in 2008. Earlier this year, Bell signed its first 5G wireless network supplier agreement with Nokia, a rival of Ericsson and China’s Huawei.

Later Tuesday, Telus Corp. announced that it had also selected Ericsson, as well of Nokia of Finland, as suppliers for its 5G networks.

Neither Bell nor Telus provided details on how much their contracts with Ericsson and Nokia were worth.

Huawei’s participation in the construction of Canada’s 5G network has become a major sticking point between Ottawa and Washington. The U.S. has warned Canada, the United Kingdom and other allies that it will limit intelligence sharing with countries that have Huawei equipment in their 5G networks – citing the potential for spying by China, an allegation Huawei denies.

“Huawei has worked closely with Bell in Canada for many years, helping them build one of the world’s leading 4G LTE networks,” Huawei Canada spokesman Alykhan Velshi said in a statement.

He added that Huawei’s remains committed to Canada and looks forward to the federal government completing its 5G review and its decision about Huawei’s role in Canada.

“We continue investing more than a quarter of a billion dollars a year in R&D in Canada. We continue building new research partnerships with Canada’s world-class universities. As we have for more than a decade, we continue to work with our Canadian telecom partners to help them build and support state-of-the-art networks that connect Canadians,” Velshi said.

Ericsson, already a supplier of 4G LTE wireless and other technology to Bell and the main supplier for its rival Rogers Communications, also has a major research and development presence in Montreal.

Bell said Ericsson will also support its rollout of 5G-enhanced fixed wireless home internet service to rural areas, which generally have less access to land-based fibre optics networks.

On Tuesday, Bell indicated the door remains open to partnering with Huawei, depending on the outcome of the federal government’s review.

“We’re working with multiple vendors to build our 5G network – as we did with our successful buildout of 4G LTE, which included Cisco, Ericsson, Huawei, Nokia and others,” said Bell spokesperson Marc Choma in an email to BNN Bloomberg. “Huawei has been a reliable and innovative partner in the past and we would consider working with them in 5G if the federal government allows their participation.”

A spokesperson for Telus did not respond to BNN Bloomberg’s question about whether it is also open to partnering with Huawei on its 5G network if permitted by the government.

Prior to the arrest of Huawei Technologies chief financial officer Meng Wanzhou in Vancouver in December 2018, the Chinese company wasn’t a household name in Canada.

Since Meng’s arrest, which has sparked a major rift between China and Canada and focused worldwide attention on Huawei, the federal government has been undecided about whether the Chinese company will be allowed in Canada’s 5G networks – which are currently being assembled.

Analysts have said Bell and Telus use Huawei extensively in their fourth-generation networks and would be more affected by a Huawei ban than their rival Rogers Communications, which has predominantly used Ericsson network gear.

Besides Huawei, Ericsson and Nokia, there are other companies that want a piece of the 5G network upgrades.

Samsung Electronics has announced a deal to supply equipment for Videotron’s wireless network in the province of Quebec and the Ottawa region of Ontario.

With files from BNN Bloomberg

BNN Bloomberg is a division of Bell Media, which is owned by BCE.

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Telus selects Nokia, Ericsson as 5G suppliers – Yahoo Canada Finance

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Toronto, Canada - June 16, 2019: TELUS Scarborough office building in Toronto, canada. Telus is a Canadian telecommunications company that provides telecommunications products and services.

Vancouver-based national carrier Telus has selected Nokia and Ericsson as its 5G vendors, a press release from the company said. 

The news comes the same day that Bell announced it too would use Ericsson to provide radio access network (RAN) equipment. 

“Our team is committed to rolling out superior network technology from urban to rural communities, fueling our economy and driving innovation as we power Canadians into the 5G era through an unparalleled network experience,” Telus’ CEO Darren Entwistle said in the release. 

“Our 5G deployment will support economic growth and diversity that will be essential for the virtualization of health, education, teleworking, and stimulating the economic growth and recovery given the impact of COVID-19.”

During its Q1 2020 earnings, CFO Doug French said its focus right now is to help its customers during the COVID-19 crisis.

In its Q4 2019 earnings, the carrier said it was not going to pre-announce its 5G launch plans but that its initial module, or the first phase of the 5G rollout, would be with Huawei until the government approves its RFP.

Bell and Telus use Huawei’s network equipment in some areas. The federal government is still reviewing whether or not it intends to ban the Chinese telecommunications manufacturer from participating in Canada’s 5G rollout.

Rogers also uses Ericsson as a 5G vendor.

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