Dividend.com has added an international energy firm to the Best Dividend Stocks List and removed a global defense contractor from the list.
The global economy is roaring back. And that’s been great for the basic materials firms. After years of supply/demand imbalances, the producers of various natural resources are once again seeing higher prices for a variety of commodities. None has been as spectacular as the gains in oil and natural gas. Demand for crude oil has finally begun to push prices up to above the $70 per barrel mark – a price not seen since the early days of 2014.
This is wonderful news for our new Best Dividend Stocks List Pick.
As one of the largest integrated energy stocks in Canada, our new pick has continued to see rising earnings and cash flows in this new high price environment. But our pick isn’t just a one-trick pony. Oh no. With one of the largest refining infrastructures in North America, our new pick’s diversity of assets allows it to profit no matter what oil prices are doing.
No wonder our pick has been able to raise its dividend for more than 20 years straight.
With higher oil prices and demand for various transportation fuels/petrochemicals rising, our pick should be able to keep the dividend growth going far into the future.
To summarize, here are five reasons why you should own this stock:
- Massive asset base covering upstream, midstream and downstream energy operations that enables the firm to profit under a volatile energy price environment.
- Majority owned by one of the largest energy firms on the planet and has successfully leveraged that ownership with an investment grade balance sheet and expansion projects.
- Generated nearly $3 billion in operating cash flows, on average, over the last five years.
- Has paid a dividend for over a century and increased its payout for 20+ years straight.
- Healthy payout ratio of 45% and healthy yield of 2.34%.
Removal of a Defense Firm from the Best Dividend Stocks List
As we add our top energy firm, unfortunately, have to say goodbye to one of our list’s top performers in defense. After many quarters of outperformance, our former pick’s potential has finally caught up with itself. Earnings, while still great, have started to slow. And with stocks becoming more volatile, investors are less forgiving with slip-ups. As a result, shares have sold off more than the broader market, pushing several components of the DARS metric below our thresholds. With its overall DARS score lower, we have been forced to remove the firm from our coveted list. However, the firm still offers plenty of potential for income seekers and has numerous positives. As a result, we still remain bullish on the name.
Find out which asset manager made it to our Best Dividend Stocks List here.