BCE (TSX: BCE, NYSE: BCE)

Dividend Yield: 4.5%    Recent Price: C$60/US$45   Fair Value: C$71/US$54

BCE remains one of our best ideas for new money apart from holding the top position in our Dividend Champions portfolio – a position that is well-deserved given its outstanding history as a profitable operator.

BCE holds a dominant position in the Canadian telecommunications industry, which limits its growth opportunities. However, the company continues to find ways to generate growth either organically or by acquisition.

The relatively safe dividend is expected to continue growing at 5% per year and the attractive yield is 4.5%. In a low-interest-rate environment, this is an ideal stock to own.

Inter Pipeline  (TSX: IPL, OTC: IPPLF)

Dividend Yield: 5.8%    Recent Price: C$27/US$20   Fair Value: C$31/US$23

Inter Pipeline is one of the smaller regional Canadian pipeline operators that seem to be able to maneuver their way through the regulatory and environmental minefields in a consistent and profitable way by helping to move almost 4 million barrels of oil per day out of the landlocked area.

The business’ profit is mostly derived from cost-of-service or fee-based contracts, which are generally not subject to commodity risk and provide for a relatively stable and low-risk income stream. The company has built up an enviable track record of profitable growth over time and increased its dividend 10% per year over the past 10 years.

The main attraction from a valuation perspective is the current 5.8% dividend yield coupled with reasonable growth over the next two years. We consider the dividend safe given the sound balance sheet, strong cash flow generation and reasonable pay-out ratio.

North West Co. Inc.  (TSX: NWC, OTC:NWTUF)

Dividend Yield: 5.0%    Recent Price: C$25/US$19   Fair Value: C$31/US$23

The North West Company Inc. is a retailer to underserved rural communities and urban neighborhood markets in northern and western Canada, rural Alaska, the South Pacific and the Caribbean. Its stores offer a range of products and services, with an emphasis on food.

The share price has been weak after recent below-par quarterly results caused by a one-off jump in employment costs and some softness in the Canadian part of the operations. Capital spending on the revamping of 42 high-profit-potential stores is also temporarily depressing free cash flow and dividend growth.

However, the company has a long history of operating successfully in these areas and has built up an enviable track record. Key financial metrics including profit margins and returns on equity are considerably better than the industry averages, cash flow remains adequate, the balance sheet is strong and the dividend yield attractive.

Choice Properties REIT (TSX: CHP-U, OTC:PPRQF)

Dividend Yield: 5.2%    Recent Price: C$13/US$10   Fair Value: C$14/US$11

Choice Properties is a core holdings in the Dividend Champions portfolio. The REIT was spun out of Loblaw Companies Limited and listed in July 2013. Choice focuses on stand-alone grocery properties and grocery-anchored shopping centres mostly leased on long-term contracts to Loblaw, a prime Canadian food and drug retailer.

The unit price is down by 11% from its July peak as investors became increasingly concerned about rising U.S. interest rates taking the REIT sectors in both the U.S. and Canada down a few notches. However, we find the 5.2% dividend yield combined with moderate growth very attractive when compared to Canadian fixed income investments.