Where to Find High-Yield Dividend Stocks Now
February 21, 2019
High-Yield Dividend Stocks Here
If you’re searching for high-yield dividend stocks, Canada nears the top of the list.
Resource shares, which make up most of that country’s stock index, have fallen out of favor. And with a left-wing government in office, investment dollars have searched out better returns elsewhere.
Here’s the thing: this actually presents a great opportunity for investors.
Canadian stocks now trade at rock-bottom valuations. And those willing to do some digging can find some big yields.
You don’t need a degree in statistics to follow market sentiment; just follow the money.
People pour cash into ideas they’re excited about and pull money out of (and then avoid like the plague) whatever they hate.
Today, investors hate Canada. Interest in the country’s largest fund has neared multi-year lows.
These folks have bailed on an exchange-traded fund (ETF) you might have heard of, the iShares MSCI Canada ETF (NYSEARCA:EWC).
EWC is a massive fund. It holds around $2.8 billion in assets.
It’s also the easiest way for people to invest in the “Great White North.” You don’t have to worry about currency exchanges or setting up a foreign bank account; with just a few clicks of the mouse, U.S. investors can own a stake in Canada’s largest companies.
That ease of use comes with a downside, however. It also means that folks can bail on iShares MSCI Canada ETF just as quickly. And that’s exactly what has happened in recent months.
As you can see in the chart below, EWC’s total outstanding shares have neared a new multi-year low.
(Source: “EWC Shares Outstanding History,” SharesOutstandingHistory.com, last accessed February 19, 2019.)
When it comes to funds like iShares MSCI Canada ETF, the number of outstanding shares provides a great insight into what people think of an investment right now.
That’s because ETFs create and liquidate units based on demand. A rising share count indicates a lot of investor interest. A falling share count indicates that investors want to get out.
Based on this indicator, investors haven’t hated Canada this much in years. They want to bail and are selling fast.
And this is exactly what I like to see in an investment.
I always look for the hated markets. And investors are disgusted by Canada today.
As a result, stocks trade at a fraction of the valuations they do stateside. Blue-chip business, which might yield only one or two percent in the U.S., are high-yield dividend stocks paying out as high as seven percent north of the border.
And the smart money has taken notice.
Last week, I pointed out that billionaire investor Warren Buffett purchased a large stake in Canadian oil giant Suncor Energy Inc. (NYSE:SU). We’ve also seen an uptick of hedge fund activity in high-yield dividend stocks like BCE Inc. (NYSE:BCE), Bank of Montreal (NYSE:BMO), and Canadian National Railway (NYSE:CNI).
Income investors might be wise to follow suit.
