Enbridge (TSX:ENB) or Pembina Pipeline (TSX:PPL): Which Is a Better Dividend Stock?

Gas pipelines

The lower crude oil prices and weak demand have weighed heavily on the stock prices of Enbridge (TSX:ENB)(NYSE:ENB) and Pembina Pipeline (TSX:PPL)(NYSE:PBA). However, the decline in the stock prices has increased their dividend yields to above 8%. In this article, we will look at which among the two companies is a better buy right now.

The case for Enbridge

Enbridge has lost 22% of its stock value this year. The decline in the mainline throughput of its liquids pipelines segment amid lower oil prices has dragged its financials and stock price down. In its recently completed second quarter, its adjusted EPS fell over 16% on a year-over-year basis.

Meanwhile, the higher utilization in its gas pipelines and utility segment, favourable price revision, and assets placed into the service in the last four quarters increased its adjusted EBITDA by 3.2%.

Further, the company is continuing with its $11 billion secured projects, which are at the various stages of execution. The management expects these projects to come to service between 2020 and 2023. Once operational, these projects could contribute $2.5 billion of incremental cash flow for the company.

The company continues to expand its presence in the renewable segment. In the second quarter, the adjusted EBITDA from the renewable power generation segment grew 50% to $150 million. Also, the company expects the construction of its 2.25-megawatt Lambertville Solar Project to be completed later this year.

Meanwhile, earlier this month, Enbridge had announced that it has received all the necessary approvals and will soon restart the eastern segment of its Line 5 in the Straits of Mackinac. So, given its strong growth prospects and contractual arrangements, I believe the company’s cash flows to be stable in the years to come.

Since going public in 1953, Enbridge has been rewarding its shareholders with dividends. Meanwhile, the recent decline in the stock price has increased its dividend yield to a juicy 8.1%.

The case for Pembina Pipeline

Pembina Pipeline has lost close to 40% of its stock value this year. During the recently completed second quarter, its top line shrunk by close to 30% due to weak performance from its marketing and new ventures segment. The decline in the energy demand, reduced crude activities, lower frac spreads, and compressed margins dragged the segment’s sales down.

However, its base businesses, the majority of which are fee-based contracts, remain resilient. In the second quarter, both the pipelines and facilities segments reported a surge in their volumes and EBITDA.

Further, the company has increased its fee-based contribution to adjusted EBITDA over the years. For this fiscal quarter, the company’s management projects the contribution to be between 90% and 95% compared to 77% in 2015. Also, the company has lowered its payout ratio significantly, which is encouraging.

Meanwhile, the company pays dividends monthly. Currently, the company’s dividend yield stands at 8.6%. Amid the crisis, the company has announced it will not hike its dividends for the rest of this year. However, the company’s dividends are safe, given its resilient base businesses that are immune to commodity price fluctuations.

Bottom line

Although Pembina Pipeline offers a high dividend yield, I believe Enbridge is a better buy, given its strong balance sheet, stable cash flows, and higher growth prospects. Further, Enbridge has hiked its dividends for the past 25 consecutive years. It has also maintained its guidance of increasing its dividends at 5-7% until 2022.

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The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends PEMBINA PIPELINE CORPORATION. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.

The post Enbridge (TSX:ENB) or Pembina Pipeline (TSX:PPL): Which Is a Better Dividend Stock? appeared first on The Motley Fool Canada.

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How Much to Invest to Replace CERB Paychecks?

question marks written reminders tickets

The Canada Emergency Response Benefit (CERB) program finally came to an end on Sept. 27 after processing over 26.97 million applications and paying over $79.30 billion in benefits to over 8.8 million recipients. There’s an urgent need to find CERB alternatives for October and going forward.

As the CERB program ends, the $2,000 a month payments are no more. Millions of remaining beneficiaries are expected to migrate to other benefit programs created by the federal government. The aim is to cushion Canadians from the economic hardship created by the COVID-19 pandemic while encouraging them to seek employment.

Canadians are looking to the government’s other economic recovery benefits to replace the CERB’s $2,000 monthly paychecks the program had provided for the past 28 weeks. Recovery benefit applications will commence in October.

CERB alternatives available in October

Four CERB alternatives are available from October. These include Employment Insurance, for which applicants need to demonstrate just 120 insured hours to qualify for EI payments. There’s also the Canada Recovery Benefit (CRB) for self-employed individuals, the Canada Recovery Sickness Benefit (CRSB), and the Canada Recovery Caregiving Benefit (CRCB). Fellow Fool contributor Puja Tayal outlined them all here.

However, there’s a chance that not everyone will be eligible for EI and the other three recovery benefits. Moreover, the recovery payouts may not fully replace the $2,000 CERB monthly payout.

Given such a scenario, affected Canadians may need to look to other income sources to augment or replace recovery benefits payouts. One alternative is to look into one’s savings and investment portfolios for monthly income.

How to replace CERB payments?

The best and easiest way to replace CERB paychecks is to apply for EI or any one of the available recovery benefits. EI could pay a minimum of $500 a week and up to $847 weekly, while other recovery benefits range from $400 per week.

That said, there are several ways in which one can generate the desired $2,000 a month or $24,000 per annum from an investment portfolio. Our functional capital markets can offer many alternatives for regular income needs.

The allure of day trading for income draws many millennials. However, day trading for a living isn’t everyone’s game. You can blow off an account or two in no time, even in one day if proper risk management techniques aren’t being applied. The risk of losing capital in day trading is just too high. If you are good at it though, day trading requires the least amount of capital to generate a decent income.

Alternatively, capital can be deployed in monthly pay dividend stocks with safe, well-covered dividend payouts. The current yield on the stock is a key determinant of how much investment capital you need to create a $2,000 monthly withdrawals without touching your capital.

Notably, lower and safer yields will require the most capital, while higher and riskier yields will require lower capital deployments.

Which dividend stocks should you buy?

Consider a 7% yielding dividend stock like a currently beaten-down NorthWest Healthcare Properties REIT (TSX:NWH.UN). NorthWest Healthcare is one defensive and internationally diversified real estate play that enjoys income protection from public healthcare funding. Cash flows were largely unaffected by the COVID-19 pandemic.

The REIT essentially collected about 97.6% of portfolio rent during the worst part of the pandemic. Its normalized AFFO payout rate was a safe 87% for the second quarter. Most noteworthy, the trust’s growing international property portfolio had a strong and stable 98.8% occupancy rate. The total portfolio has a very long average lease expiry of 14.5 years. The portfolio can sustain regular monthly distributions for a very long time.

To get $2,000 monthly from NorthWest Healthcare Properties REIT, you will need to invest about $343,000 buying the REIT’s equity units at current prices of about $11.30 per unit.

You could opt for other safe income plays like Fortis Inc (TSX:FTS). The utility’s 3.7% yielding dividend will require nearly $650,000 in capital to give you back $24,000 annually. Such capital amounts could be beyond the majority of us. That said, even small deployments will help reduce the deficit from a suspended CERB program.

Foolish bottom line

We need to save significant sums to live off our investment portfolios. Other recovery benefits will help replace CERB paychecks for now. As the economy recovers, let’s keep saving and investing our way to financial freedom.

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The post How Much to Invest to Replace CERB Paychecks? appeared first on The Motley Fool Canada.

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Want Monthly Income? This Stock Is a Must

Payday ringed on a calendar

One of the main objectives of a well-balanced portfolio is owning stocks that can provide a steady income. Often, that income is derived from several stocks with alternating payment frequencies on a quarterly schedule. Most investors accept this irregular schedule balancing act to get to a desired monthly income.

Fortunately, there are some great investments on the market today that offer a growing monthly income. One such stock is TransAlta Renewables (TSX:RNW).

How to renew your portfolio

TransAlta is a renewable energy operator. The company owns and operates a variety of renewable facilities in Canada, the U.S., and Australia. Those facilities include gas, hydro, wind, and solar elements.

Utilities such as TransAlta generate power and sell it based on rates outlined in long-term regulated contracts. Those contracts (known as power-purchase agreements, or PPAs) can span decades, making utilities incredibly stable long-term investment options. In the case of TransAlta, more than half of the company’s facilities are bound to PPAs that run well into the 2030s.

While this makes TransAlta a comparable investment to its fossil fuel-burning peers, those renewable facilities provide a competitive advantage. In short, the entire power-generation segment is moving towards renewables. For traditional fossil fuel utilities, that transition is going to come at a massive cost. Instead, TransAlta can continue to invest in growth opportunities that will feed the company’s attractive dividend and, in turn, a monthly income stream.

By way of example, in the most recent quarter, TransAlta reported energy production of 1,098 GWh, reflecting gains made from a pair of new wind farms in the United States. Those facilities also led to a gain in EBITDA, which increased by $4 million in the quarter.

Monthly income awaits

Recession-resistant businesses such as TransAlta are always a great option to consider during a downturn. The fact that TransAlta operates under the same defensive model that traditional utilities adhere to (i.e., a stable stream of dividends) is great.

TransAlta has two advantages over its peers. Specifically, it operates an all-renewable portfolio of facilities and boasts a monthly distribution. TransAlta’s dividend works out to an impressive 5.73% yield. Worth noting is that this exceeds the payout offered by most of its fossil fuel peers who still lack a renewable portfolio.

In other words, by investing in TransAlta, you’re getting a higher income on a more frequent basis.

Final thoughts

TransAlta is a superb long-term investment that still trades at an attractive level. That should be reason enough to consider adding the company to your portfolio, but the monthly income makes it a hard investment to ignore.

In other words, buy it, hold it, and retire rich.

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Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned.

The post Want Monthly Income? This Stock Is a Must appeared first on The Motley Fool Canada.

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CIT Bank CD Rates Review: 12-Month 0.35% APY CD, 0.35% APY No-Penalty CD

CIT Bank CD rates promotion bonusAvailable online, open a CIT Bank No-Penalty CDs and you can now save for 11 months and earn 0.35% APY rate with no penalty for early withdrawal. There is also a 12-Month CD Term for 0.35% APY, one of the highest rates in the country.

CIT Bank’s Certificate of Deposits provide a safe, secure way to grow your savings and you can even choose from a selection of CD terms to help you stay on target for your savings goals. There are no monthly fees, nor is there a huge minimum opening deposit amount!

CIT Bank is an internet bank with no physical branches based in Pasadena, California. CIT Bank limits your withdrawal options to electronic transfers ordered by phone or initiated online through the bank’s website, and while these services are free they may increase the time it takes to access your funds. However, CIT Bank does provide a mobile app to perform additional account management, something other online accounts often lack.

To get started, click the “Apply Now” link and follow the instructions. When you are on CIT Bank’s web page, press “Open an account”, click “Start a new application” and begin completing the application!

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CIT Bank Certificate of Deposit Rates

CIT Bank CD CIT Bank Money Market Account CIT Bank Promotions Bonuses CIT Bank Savings Builder CIT Bank Bonuses Promotions Savings Builder CD No Penalty Bonus Money Market Savings Account
• Available online nationwide
• Earn 0.35% APY on a 12-Month CD Term
• Earn up to 0.50% APY
• $1,000 minimum to open
• Selection of terms to meet your needs
• A range of choices. Low minimum deposits.
• No fees to open or maintain the account
• Available as Custodial
• Open a CIT Bank Certificate of Deposit Account today!

CD Rates  
6-Month Term 0.35% APY
1-Year Term 0.35% APY
13-Month Term 0.35% APY
18-Month Term 0.35% APY
2-Year Term 0.40% APY
3-Year Term 0.40% APY
4-Year Term 0.50% APY
5-Year Term 0.50% APY

CIT Bank Certificate of Deposit Fees

 Account Type CIT Bank Certificate of Deposit
Minimum opening deposit $1,000
Monthly fee $0
Term 6 Months up to 5 Years
FDIC Insured Yes
Interest Compounded Daily

CIT Bank No Penalty Certificate of Deposit Information

CIT Bank Savings Builder account
With the CIT Bank No-Penalty 11-Month CD:
• Earn 0.35% APY on your funds with just a $1,000 minimum deposit.
• The perfect balance between a great fixed rate and flexible money access.
• Access funds, if needed. No penalty.
• No opening or maintenance fees
• Shorter 11-month timeframe and a great APY
• If you need your funds prior to the maturity date, you can withdraw your money — including any interest earned — beginning seven days after the funds have been received. No penalty. No problem. It’s the security of a CD with the flexibility to access your funds early if you need them.

  • Account Type: CIT Bank No-Penalty Certificate of Deposit
  • Interest Rate: 0.35% APY
  • Minimum Balance: $1,000
  • Maximum Balance: None
  • Availability: Nationwide
  • Expiration Date: None
  • Credit Inquiry: Soft Pull
  • Opening Deposit: $1,000
  • Credit Card Funding: None
  • Direct Deposit Requirement: No
  • Monthly Fee: No monthly fee
  • Closing Account Fee: None
  • Insured: FDIC

CIT Bank Certificate of Deposit Terms & Conditions

With CIT Bank No-Penalty CDs, know that you can’t partially withdraw your initial deposit. When you’re ready to withdraw your principal, you’ll have to close your account. You can, however, withdraw part of your interest at any time.

Interest compounds daily and is credited monthly. Each month, you’ll have the option of transferring interest electronically to a bank account or having a check mailed to your home.

When your No-Penalty CD comes due, you can close it or let the CD automatically renew following a 10-day grace period.

CIT Bank Online Banking

CIT Bank Online Banking provides real-time access to your account to help you manage your money when it’s most convenient. Simply log into your CIT Bank account and you will be able to:

  • Manage your accounts and account information online
  • View and download statements and account activity
  • Schedule and make transfers to and from other banks
  • Schedule and make transfers between CIT Bank accounts
  • Create banking reports
  • Open new accounts
  • Receive and manage account alerts
  • Send secure messages

How to get started:

  1. Visit CIT Bank’s website and sign in.
  2. Once you log in, you can view your balance and transactions, make transfers, send and receive money, deposit checks, pay bills, view online statements, and more.

CIT Bank Mobile Banking

CIT Bank Mobile Banking helps keep your busy life and finances moving ahead. There’s no stopping you with these free services that help you manage your money anytime, anywhere. With the mobile banking app, you will be able to:

  • Check account balances and transaction history
  • Transfer money between CIT Bank accounts
  • Deposit checks for High Yield Savings customers

How to get started:

  1. If you already use Online Banking, download the app via iOS or Android.
  2. Open the app and log in with your existing username and password. If you don’t have log in information, you can create a username and password right in the app.
  3. Once you log in, you’ll see your account(s). You can view your balance and transactions, make transfers, send and receive money, deposit checks, pay bills, view online statements, and more.

Funding Information

  • Electronic Fund Transfer: All you need is the information on a blank check from the institution holding your account.
  • Internal Transfer: If you have a current savings account with CIT Bank, you can transfer funds internally to your certificate of deposit.
  • Checks: You may also fund your CIT Bank Certificate of Deposit by mailing a check to:
    • CIT Bank, N.A.
      Attn: Fulfillment
      P.O. Box 7056
      Pasadena, CA 91109-9699
  • Wire: Deposits by wire transfer should include the information below:
    • Bank Name: CIT Bank, N.A.
    • Bank Address: P.O. Box 7056 Pasadena, CA 91109-9699 (Tel 855-462-2652)
    • CIT Bank Routing/Transit #: 124084834
    • Beneficiary Account #: Your Name, address and your account number (located on the confirmation email)

Note: If you are a CIT Bank’s commercial, listing service, or institutional client, please call CIT Bank at 877-748-0004 for the routing number to use for wire instructions

CIT Bank Certificate of Deposit Rates Requirements

You can open your CIT CD account online. Gather the following information before you start the application process:

  1. Apply for a CIT Bank Certificate of Deposit or CIT Bank No-Penalty CD online.
  2. Enter Your Info: We require your address, phone, email and social security number (or other taxpayer ID).
    • Social Security number
    • Driver’s license or another form of valid state ID
    • Details for your account beneficiary
  3. Fund Your Account: Minimum of $100 to open your account. You can transfer funds with electronic transfer, mail in check, mobile check deposit, or wire.
    • Bank routing number and account number — or a check from the account you’re using to fund your CIT Bank CD

If you prefer to fund your CIT Bank CD by check or wire transfer instead of via electronic deposit, the bank provides its mailing address and routing information in the above paragraph.

Bottom Line

Have you been thinking about your bank or the APY rate you have? With CIT Bank, they provide a safe, secure way to grow your savings and you can even choose from a selection of CD terms to help you stay on target for your savings goals. With CIT Bank No-Penalty CDs, you can earn the 0.35% APY rate on your funds!

I recommend using the CIT Bank Certificate of Deposit if you want to use a ladder strategy for investing. CIT Bank’s range of CD options makes it easy to plan out your savings. Also, the 10-day grace period, where you can withdraw your investments within 10 days of depositing, is a great feature. The CIT Bank No-Penalty CD rate and features make it a viable option for individuals as well as businesses.

If this offer did not suite you, feel free to visit our list of the Best Savings Rates as well as our list of the Best Bank Bonuses that are filled with various financial institutions from banks, credit unions, and even federal credit unions that are offering great rates and bonuses!

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The post CIT Bank CD Rates Review: 12-Month 0.35% APY CD, 0.35% APY No-Penalty CD appeared first on Hustler Money Blog.

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