That’s history now after the Bank of Canada chopped its key interest rate by another 50 basis points to 3.25 per cent in December, while alsoWith many financial institutions now offering GICs with a 3-per-cent interest rate that could move lower still, it may be time to start looking at dividend stocks with capital-gains potential.ALA-T AltaGas, which has an energy infrastructure and utility business, has had a 4.
39-per-cent dividend growth rate over the past five years and is poised to increase its payout again, Mr. Simpson says. The Calgary-based firm’s midstream division, which is involved in natural gas processing and transportation, will be able to boost exports to Asia with the expansion of the Ridley Island Propane Export Terminal by next year, he says. Its U.S. utilities business may also benefit from future energy demand from data centres. AltaGas, which has a yield in the 3.8-per-cent range, is compelling because it trades at a cheaper valuation than Canadian utilities such as Fortis Inc. Risks include interest rates not declining as expected and if energy sources are discovered closer to the company’s Asian customers, he says.Flagship Communities, an operator of U.S. manufactured housing communities, has managed a 5-per-cent dividend growth rate over the past three years, Mr. Simpson says. The Fort Mitchell, Ky.-based REIT, whose cash distributions are in U.S. dollars, listed in Canada in 2020 and has been growing through acquisitions in the U.S. Midwest and Southeast markets, he says. The REIT, which rents lots to homeowners, trades attractively at 11 times funds from operations, he says, compared with private transactions, which are going for 15 to 18 times. It also trades at a discount to his estimate of the REIT’s net asset value at $20.75 a unit. Flagship Communities, now yielding about 4.2 per cent, has a 54-per-cent payout ratio, he adds, so it can raise its distributio
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