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3 days ago
- Business
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A 7.6% Dividend Stock Paying Cash Every Single Month
Written by Kay Ng at The Motley Fool Canada Are you looking for high monthly income from your investments? Whitecap Resources (TSX:WCP), a Canadian oil-weighted producer, might be flying under your radar. While energy stocks are often seen as volatile and more suitable for trading than income, Whitecap Resources breaks this notion with a hefty 7.6% dividend yield — paid in cash every single month. At a recent share price of $9.63, a $10,000 investment in Whitecap would generate approximately $757 annually, or about $63 per month. But is this eye-catching dividend too good to be true? Is the dividend safe? One of the first questions any prudent investor should ask is whether a high dividend is sustainable. In Whitecap Resources's case, the short answer is yes — for now. Whitecap's dividend is currently covered by both its free cash flow and earnings. Over the trailing 12 months, the company paid out only 68% of its free cash flow and 47% of its net income. With a breakeven West Texas Intermediate oil price of around US$55 per barrel — and current oil prices sitting above US$68 — there's a decent cushion. This year, the company is targeting production between 295,000 and 300,000 barrels of oil equivalent per day and expects to generate $2.8 billion in funds flow, or about $2.79 per share. Its planned capital expenditures total $2.0 billion, which still leaves room to support dividend payments — $431.4 million over the past 12 months — with some flexibility left over. To top it off, Whitecap is considering buying back shares, a move that can enhance shareholder value over time, especially since shares appear to be undervalued at the moment. Its balance sheet remains solid, with a long-term debt-to-capital ratio of just 13.7%. The risk you can't ignore However, it would be misleading to focus only on the present. Whitecap Resources's dividend history shows that it is highly sensitive to extreme market downturns. In 2020, during the pandemic-induced oil crash, Whitecap cut its dividend by 36%. Back in 2016, amid another energy price collapse, the dividend was slashed by nearly 54%. Each time, share prices also plummeted — falling below $1 during COVID and to around $6 in 2016. But there's a silver lining: both times, Whitecap raised its dividend again once markets recovered. That speaks to a management team willing to restore income when the business stabilizes, though it's clear the payout isn't immune to commodity price shocks. Investors should view Whitecap as a high-yield play with built-in volatility. It's best suited as a satellite position in a diversified portfolio — something to juice income or as a trading position that targets total returns with a focus on price gains, not something to anchor your retirement. Should you buy now? Whitecap Resources reports its second-quarter results on July 23, so waiting for that update could offer added clarity on the business performance and guidance. In the meantime, analysts believe the stock is undervalued by over 20% based on current oil prices and forecasted cash flows. That discount, paired with a secure (for now) 7.6% yield, makes this one of the more compelling income opportunities on the TSX. Bottom line: Whitecap pays a mouth-watering monthly dividend, backed by current cash flow, solid operations, and a strong balance sheet. Just don't forget — it's still an energy stock. If you've got the stomach for some bumps and a long-term outlook, this could be one dividend payer worth holding through the cycles. The post A 7.6% Dividend Stock Paying Cash Every Single Month appeared first on The Motley Fool Canada. More reading 10 Stocks Every Canadian Should Own in 2025 [PREMIUM PICKS] Market Volatility Toolkit A Commonsense Cash Back Credit Card We Love Fool contributor Kay Ng has no position in any of the stocks mentioned. The Motley Fool recommends Whitecap Resources. The Motley Fool has a disclosure policy. 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-07-2025
- Business
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Best Stock to Buy Right Now: Shopify vs. Constellation Software?
Written by Kay Ng at The Motley Fool Canada If you're searching for the best Canadian tech stock to buy right now, Shopify (TSX:SHOP) and Constellation Software (TSX:CSU) are probably at the top of your watchlist. Both companies have trounced the broader Canadian market over the past three years, but which one offers a better opportunity today? Let's compare them side by side. Over the past three years, Shopify turned a $1,000 investment into $3,678 — an extraordinary compound annual growth rate (CAGR) of 54%. Constellation Software was also amazing, growing that same investment to $2,611, for a 38% CAGR. By contrast, a comparable investment in a Canadian stock market exchange-traded fund (ETF) would have grown to just $1,557, with an annualized return of 16%. Both stocks have been exceptional performers, but the paths they've taken are very different. Shopify has become a global e-commerce powerhouse, helping millions of merchants in over 175 countries build and scale their online and offline businesses. Its platform handles everything from storefront design and payments to fulfillment and marketing — all powered by increasingly advanced artificial intelligence (AI) tools. In fact, Shopify is now leading the charge in AI-driven commerce. It recently launched an AI store builder that lets users create entire storefronts using text prompts. Its enhanced Sidekick assistant uses conversational AI to help merchants analyze trends, manage operations, and personalize customer experiences — all in real time. Financially, Shopify has been growing quickly. Over the past three years, revenue rose 24.4% per year to US$8.9 billion, while operating income surged nearly 59% annually to US$1.1 billion. However, net income declined 31% to US$2 billion, and earnings per share (EPS) dropped 32% to US$1.55. Despite those earnings challenges, Shopify maintains a clean balance sheet with very little debt. Still, risks remain. Its customer base is mostly small- and mid-sized businesses (SMBs), which are sensitive to economic slowdowns. Plus, competition is fierce. Amazon, Adobe, BigCommerce, and other AI-native platforms are all fighting for market share. Constellation Software operates a completely different model. It acquires and holds vertical market software businesses — specialized companies that serve industries like healthcare, utilities, education, and government. Each acquisition remains independently operated, and this decentralized structure has earned Constellation comparisons to 'tech's Berkshire Hathaway' by The Economist. The company's growth is driven by constant acquisitions, and its track record is stunning. For example, over the past three years, revenue rose 25.4% to $10.4 billion, while net income more than doubled, growing 33% annually to $731 million. EPS has followed a similar trajectory. Gross profit margins remain strong, and the company has an investment-grade BBB credit rating from S&P. However, Constellation isn't without risk. Its business model hinges on finding and integrating new acquisitions. It also carries a long-term debt-to-capital ratio of 49%. And with a share price near $4,959 and a forward price-to-earnings (P/E) ratio of 78, the stock is priced for perfection. Both Shopify and Constellation Software are elite Canadian tech companies with impressive long-term records. Shopify offers rapid innovation and e-commerce exposure, but comes with higher volatility and more competition. Constellation, however, delivers steady returns through disciplined acquisitions and consistent profitability. According to analysts, Constellation Software offers a better margin of safety right now — especially given its more predictable earnings and proven acquisition strategy. Bottom line: If you're choosing just one, Constellation Software is likely a better stock to buy today. The post Best Stock to Buy Right Now: Shopify vs. Constellation Software? appeared first on The Motley Fool Canada. Before you buy stock in Constellation Software, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Constellation Software wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $24,927.94!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 30 percentage points since 2013*. See the Top Stocks * Returns as of 6/23/25 More reading 10 Stocks Every Canadian Should Own in 2025 [PREMIUM PICKS] Market Volatility Toolkit A Commonsense Cash Back Credit Card We Love John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Fool contributor Kay Ng has positions in Amazon. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Adobe, Amazon, Berkshire Hathaway, and Constellation Software. The Motley Fool has a disclosure policy. 2025
Yahoo
13-07-2025
- Business
- Yahoo
I'm Betting My Future on This Magnificent Canadian Dividend Giant
Written by Kay Ng at The Motley Fool Canada Let's be clear: betting your entire future on a single stock is unwise. Maintaining proper portfolio diversification is always smart. But if I had to pick a single Canadian dividend stock to anchor my long-term portfolio — one with the durability, income, and growth I can rely on for decades — it would be Brookfield Infrastructure Partners (TSX: Here's why this dividend giant has earned my trust — and a prominent place in my retirement plan. Brookfield Infrastructure Partners isn't your average utility. It owns and operates a globally diversified portfolio of high-quality infrastructure assets across utilities, transport, midstream, and data infrastructure. This diversity allows the company to generate consistent, recession-resistant cash flows across economic cycles. At the time of writing, the stock yields a generous 5.2% based on a unit price of $44.89. Even better, the company keeps its payout ratio around 60-70% of funds from operations (FFO) — a level it's maintained for at least a decade. That means the dividend is not only attractive but sustainable. For long-term investors like me, this income can either cover living expenses or be reinvested to accelerate portfolio growth. Even more compelling is Brookfield Infrastructure Partners's track record of dividend growth. The company has increased its cash distribution for 17 consecutive years, with a five-year compound annual growth rate (CAGR) of 6.1% and a 10-year CAGR of 7.7%. These figures far outpace inflation, preserving and growing purchasing power — an essential ingredient for retirement success. BIP targets 6-9% annual organic FFO growth, driven by inflation indexing, GDP growth, and reinvested capital. Roughly 85% of its FFO is backed by regulated or contracted cash flows, with a weighted average contract duration of nine years. That kind of cash-flow visibility is gold in today's unpredictable markets. The company also has a proven ability to recycle capital — buying underperforming or undervalued assets, optimizing them, and then selling them to reinvest in higher-return opportunities. Management's disciplined approach to acquisitions and value creation has helped it deliver superior returns for long-term investors. Over the past decade, has tripled investor capital, delivering an impressive 11.7% annualized return, far ahead of the 8.5% return from the iShares S&P/TSX Capped Utilities Index ETF, a sector benchmark. That kind of outperformance is hard to ignore — and rare among utility stocks. But investors should also know this isn't a sleepy, low-volatility name like Fortis. Brookfield Infrastructure is a capital-intensive, globally active business with more complex operations. Its share price can swing more widely, especially around large acquisitions, asset sales, or macro shocks. For instance, in the last six months, plunged 23% from around a peak of $48 to a trough of $37 per unit. Those with a strong stomach — and a long-term mindset — were rewarded with a buying opportunity. Even now, with units trading near $45, analysts estimate a 15% discount to fair value. Any dip below $40 represents a compelling entry point, in my view. Brookfield Infrastructure Partners isn't just another utility — it's a magnificent dividend machine backed by global assets, reliable income, and a long-term growth strategy that works. While all investments have underlying risks, its combination of yield, operational resilience, and upside potential makes it the kind of stock I'm willing to bet my future on for durable, growing income. The post I'm Betting My Future on This Magnificent Canadian Dividend Giant appeared first on The Motley Fool Canada. Before you buy stock in Brookfield Infrastructure Partners, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Brookfield Infrastructure Partners wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $24,927.94!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 30 percentage points since 2013*. See the Top Stocks * Returns as of 6/23/25 More reading 10 Stocks Every Canadian Should Own in 2025 [PREMIUM PICKS] Market Volatility Toolkit A Commonsense Cash Back Credit Card We Love Fool contributor Kay Ng has positions in Brookfield Infrastructure Partners. The Motley Fool recommends Brookfield Infrastructure Partners and Fortis. The Motley Fool has a disclosure policy. 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
11-07-2025
- Business
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The CRA Mistake That Could Cut Your Old Age Security in Half
Written by Kay Ng at The Motley Fool Canada Every year, thousands of Canadian retirees unknowingly lose out on hundreds – or even thousands – of dollars in Old Age Security (OAS) benefits due to a little-known income trap: the OAS clawback. In 2025, this silent tax could reduce or even eliminate your OAS if you're not careful. But the good news? With the right investment strategy, you can protect your benefits – and possibly even grow your wealth at the same time. The OAS clawback begins when your net world income exceeds $90,997 (This amount rises over time and can be looked up on the Government of Canada website.). For every dollar over that threshold, the Canada Revenue Agency (CRA) claws back 15 cents from your OAS payments. That means if your net income hits approximately $148,000, your entire OAS benefit could be wiped out. Here's the kicker: many Canadians trigger the clawback by mistake, through taxable income from RRIF withdrawals, capital gains, or even dividends from non-registered investments. The impact? You could lose up to $8,819 or more in OAS – essentially handing it right back to the CRA. One way to avoid the clawback is by holding tax-efficient dividend stocks such as Fortis (TSX: FTS). Fortis is one of Canada's top utility companies, with a 51-year track record of annual dividend increases. It is a reliable income-generating stock and currently, it yields around 3.8%. To eliminate the clawback entirely and with sufficient room, retirees could hold their stock investments in their Tax-Free Savings Accounts (TFSA). Because TFSA withdrawals and growth don't count toward your net income, this money has zero impact on your OAS eligibility. Compare that to earning the same dividends in a non-registered account, where grossed-up dividends inflate your net income and can accelerate the clawback. To truly dodge the OAS clawback, consider these additional strategies: 1. Take full advantage of your TFSA Max out your TFSA contributions annually. In 2025, the cumulative TFSA contribution limit for someone who was 18 in 2009 is $102,000, and possibly higher if unused room remains. Dividends, capital gains, and withdrawals from a TFSA are not taxed, nor do they impact net income. 2. Split pension income If you're receiving eligible pension income, split up to 50% with your spouse who may be in a lower tax bracket. This reduces your individual taxable income and could keep you below the clawback threshold. 3. Withdraw from RRSPs strategically If it makes sense for your unique situation, start drawing down RRSPs before age 71 to manage your taxable income in retirement. Large RRIF withdrawals after conversion at age 71 can push you into the OAS clawback zone. Early, gradual withdrawals — especially if reinvested into your TFSA — can smooth your income and preserve OAS benefits. The OAS clawback isn't a tax penalty — it's a retirement planning problem. Without a proactive strategy, your retirement income plan could backfire, resulting in you losing out on thousands of dollars. But by combining TFSA investing, dividend-paying stocks like Fortis, and tax-smart withdrawal planning, you can keep your income high and your clawback low. The biggest mistake? Ignoring the issue. Don't let the CRA take a bigger slice of your retirement than necessary. Plan now, and you'll thank yourself later. Talk to a qualified financial planner if needed. The post The CRA Mistake That Could Cut Your Old Age Security in Half appeared first on The Motley Fool Canada. The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now. The Top Stocks that made the cut could produce monster returns in the coming years, potentially setting you up for a more prosperous retirement. Consider when "the eBay of Latin America," MercadoLibre, made this list on January 8, 2014 ... if you invested $1,000 at the time of our recommendation, you'd have $24,927.94* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 30 percentage points since 2013*. See the Top Stocks * Returns as of 6/23/25 More reading 10 Stocks Every Canadian Should Own in 2025 [PREMIUM PICKS] Market Volatility Toolkit Fool contributor Kay Ng has no position in any of the stocks mentioned. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy. 2025 Sign in to access your portfolio
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23-06-2025
- Business
- Yahoo
Avoid the OAS Clawback: Dividend Strategies Every Retiree Should Know
Written by Kay Ng at The Motley Fool Canada For many Canadian retirees, the Old Age Security (OAS) pension is a welcome source of income. But for those with moderate to high retirement income, the OAS clawback — officially known as the OAS recovery tax — can reduce or even eliminate this benefit. Fortunately, with the right dividend strategies, retirees can build a reliable income stream while minimizing their exposure to the clawback. As of 2025, the OAS clawback begins when your net income exceeds $93,454. For every dollar above this threshold, you lose $0.15 of OAS benefits. This can result in thousands of dollars in lost income annually. Net income, for tax purposes, includes interest income, Registered Retirement Income Fund (RRIF) withdrawals, and even capital gains. However, eligible Canadian dividends (and income or gains received inside a Tax-Free Savings Account (TFSA)) — can provide tax-efficient income and help retirees avoid hitting that clawback threshold. Dividends from Canadian corporations benefit from the dividend tax credit, which significantly reduces the effective tax rate for your Canadian dividend income compared to interest income or RRIF withdrawals. This makes Canadian dividend stocks an essential part of any OAS-conscious retirement strategy. Even better, dividends, interests, and gains earned inside a TFSA are completely tax-free — they don't count as income for OAS purposes at all. TELUS (TSX:T) is a dividend stock worthy for retirees to take a closer look at. As one of Canada's Big Three telecom providers, TELUS offers stable cash flows and a strong track record of returning capital to shareholders. Dividend yield: Currently, TELUS offers a dividend yield of approximately 7.5% — well above the Canadian stock market yield of about 2.7%. Payout frequency: TELUS pays dividends quarterly, giving retirees regular, reliable income. Dividend growth: TELUS tends to increase its dividend semi-annually. Last month, it just announced a new plan, targeting annual dividend growth of 3-8% from 2026 through 2028. Sector stability: High debt levels and capital-intensive investments are a common theme in the telecom sector. As well, the sector is faced with increasing competition and pricing pressure. That said, TELUS continues to generate substantial operating cash flows. Furthermore, it targets a long-term payout ratio that's 60-75% of its free cash flow. For retirees looking to build a dependable income stream without pushing their net income into OAS clawback territory, TELUS is a solid idea. Use a TFSA first: If you have excess room in your TFSA, you can consider holding some big-dividend stocks like TELUS in your TFSA to keep that income out of your taxable net income. Otherwise, hold big-dividend Canadian stocks in your non-registered account to enjoy the dividend tax credit. Delay RRSP withdrawals. Consider delaying RRIF conversions until age 72, and in the meantime, draw from non-registered accounts or the TFSA. Split pension income. If you have a spouse, pension income splitting can lower one's income and reduce the chance of hitting the clawback threshold. Limit interest-heavy investments. Guaranteed Investment Certificates and bond interest are fully taxable and can quickly drive up net income. Favour eligible dividends instead if it makes sense for your situation. Watch capital gains. Selling stocks with large unrealized gains in a non-registered account could push you into clawback territory. Aim to harvest capital gains strategically in non-registered accounts or target these gains in your TFSA. The OAS clawback is a real risk for many Canadian retirees — but with a smart dividend strategy, it can be minimized or even avoided entirely. Dividend stocks like TELUS, when held in tax-efficient accounts, can provide steady income without the tax drag. By planning carefully and making tax-smart investment decisions, you can protect both your OAS benefits and your retirement lifestyle. The post Avoid the OAS Clawback: Dividend Strategies Every Retiree Should Know appeared first on The Motley Fool Canada. More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Kay Ng has a position in TELUS. The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy. 2025
