The yield on the Bloomberg Global Developed Sovereign Bond Index hit its lowest point in a year on Wednesday, suggesting investors believe interest rates will remain lower for longer than they thought just a few months ago.Comstock Images
Bonds and term deposits are a desert if you're looking for 5-per-cent yields, but you do have options.
High-yield bonds, covered call exchange-traded funds, real estate investment trusts and mortgage investment corporations are a few of them. Others you can find hiding in plain sight. They're stocks that are part of the S&P/TSX 60 index, which is Canada's benchmark for big, blue-chip companies that are publicly traded. As of late May, five stocks in the 60 index offered yields above the 5-per-cent threshold:
Crescent Point Energy
Zero dividend growth in the past five years, according to Globeinvestor.com, but a hot performer lately with a one-year total return of 23 per cent. The yield at May 27 was 6.2 per cent, and the consensus analyst rating was "strong buy."
Canadian Oil Sands
Similar to CPG in yield and one-year total return. However, COS has shown some dividend growth over the past five years. The return over the past five years has been a slim 2.2 per cent annually. Analyst rate the stock a "hold."
Penn West Petroleum
The dividend was slashed in the past year, but PWT still yields 5.6 per cent. While energy stocks have rallied in the past 12 months, this one has risen just 2.7 per cent. PWT is also rated a "hold" by analysts.
TransAlta
The dividend was cut by more than one-third in the past 12 months, but this stock still yields 5.4 per cent. Investors have shunned TransAlta – the shares are down 7 per cent this year on a total return basis – and analysts rate it a consensus "hold."
BCE
The yield as of May 27 came in at 4.96 per cent, which means this stock has a 5-per-cent yield only with rounding. BCE has been a steady dividend grower in recent years and has risen about 9 per cent in the past 12 months. BCE's also a "hold," with the consensus view being that it's fully valued.
How to research these stocks further: Create a Watchlist on Globeinvestor.com and crunch your way through the various views. The dividend view is one I pay a lot of attention to.
Rob Carrick