The dream of nearly every investor is to live off a juicy dividend income that leaves your principal intact. To the surprise of many newer investors, establishing that safe dividend income stream is easier than you think.
That’s especially true when considering these ultra-high-yield dividends which can supercharge your portfolio.
The big banks are always a great option
You can’t mention safe dividend income in 2024 without thinking about one or more of Canada’s big banks. And there’s a good reason for that view.
The banks provide a reliable revenue stream that is backed by a mature domestic segment. They also boast international growth and a juicy dividend, which collectively makes them great buy-and-forget candidates.
So then, which big bank can provide safe dividend income in 2024 and beyond? While all of the big banks do boast reliable revenue and stable growth, Canadian Imperial Bank of Commerce (TSX:CM) is a unique option for investors to consider right now.
CIBC is smaller than its peers, and by extension has a smaller international presence. This makes the bank rely more on its domestic business to drive higher earnings. It also means that during times of increased market volatility, such as the rising rate environment we’ve seen recently, the stock is more volatile than its peers.
As a result, CIBC trades near flat year to date. But as the market continues to improve, the stock has staged a recovery. As of the time of writing, the stock has surged 14% over the past year. Prospective investors should recall that investing in CIBC is a long-term play despite any shorter-term movements.
In other words, buy it, hold it, and watch it (and your safe dividend income) grow.
Perhaps the main reason why investors should consider CIBC is the juicy dividend that it offers. As of the time of writing, CIBC offers investors a yield of 5.58%. The bank also has an established precedent of providing annual upticks to that dividend.
This handily puts it onto a list of stocks to generate safe dividend income.
Some energy is what your portfolio needs
Most investors are familiar with Enbridge (TSX:ENB). The energy sector behemoth operates the largest and most complex pipeline system on the planet. That pipeline network, which contains both natural gas and crude elements, generates the bulk of Enbridge’s revenue.
But that’s not all that Enbridge does.
The company also operates a growing renewable energy portfolio of over 40 facilities. Those sites are located across North America and Europe, generating another growing (and important) revenue stream.
In fact, Enbridge has invested over $9 billion into the segment over the past two decades.
Enbridge also operates the largest natural gas utility in North America. That title comes thanks to a trio of acquisitions completed last year that boosted Enbridge’s customer count in the segment to seven million.
And like traditional utilities, both the renewable and natural gas segments are subject to long-term regulated contracts that provide a reliable and recurring revenue stream.
That revenue stream allows Enbridge to invest in growth and pay out one of the best dividends on the market. As of the time of writing, Enbridge’s quarterly dividend pays out an insane 7.47% yield.
This means that investors who drop $40,000 into Enbridge will generate an income of over $2,960.
Oh, and like CIBC, Enbridge has an established history of annual bumps to that dividend stretching back three decades.
In short, Enbridge is one of the stocks to generate a safe dividend income. The company is a well-diversified option with both growth and income-earning potential.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
