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2 Dividend Stocks For Safe Income While Oil Prices Are Down

Published Mon, 27 May 2019 00:39:21 -0400 on Seeking Alpha

Investors may be attracted to high-yield oil & gas producers, such as Vermilion Energy (VET, TSX:VET). However, the stock price getting shaved 36% in the past 12 months indicates that there are heightened risks in the juicy yield. A year ago, Vermilion offered a yield of nearly 6%. Today, it offers a whopping yield that's over 9%!
There may be a place in investors' portfolios for higher-risk stocks like Vermilion that offer an above-average yield and upside potential at the right price.
However, if that's not for you, here are two lower-risk dividend stocks that offer safe income because lower oil prices have little impact on their profitability. At the same time, lower oil prices may still trigger some dips in the stocks.

Bank of Nova Scotia
Bank of Nova Scotia (BNS) is one of the Big 5 banks in Canada. Although most of its operations are in oil-producing countries, in which lower oil prices may lead to slower economic growth, the bank's underlying profitability is much more stable than an oil and gas producer's.
In fiscal 2018, it reported adjusted earnings of about CAD$8.8 billion, of which 56% came from Canada, 21% came from the Pacific Alliance countries (Mexico, Peru, Chile, and Colombia), and 7% came from the United States.

Source: F.A.S.T. Graphs
As the graph above shows, over the past 20 years or so, Scotiabank had very few dips in adjusted earnings per share ("EPS"). In the last financial crisis that triggered a recession, the... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
VERMILION ENERGY 15.98   9.3 1.72 2.09 13.10
ENBRIDGE 34.70   19.7 1.76 2.21 6.38
BANK OF NOVA SCOTIA 56.20   11.2 5.02 2.70 4.79

VERMILION ENERGY - VET
VERMILION ENERGY - VET  


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