Is This Company’s 8.3% Dividend Safe?

Canadian investors looking for high yield dividend stocks now certainly have their pick of late, with a number of previously high yielding stocks seeing yields rise further as stocks in sectors such as energy and entertainment have seen large stock price declines of late.

With yields inversely related to equity valuations, the question of whether picking up stocks at current levels, or waiting for such companies to bottom out, is the better move has some investors waiting.

Here’s one stock I believe investors should consider, despite the clear risk of a dividend cut in the medium term.

Corus Entertainment Inc. (TSX:CJR) is a Canadian media company focused on providing original content on channels such as HGTV, YTV, and Global – channels many Canadians will still attest to following.

The company’s core business model (traditional television advertising revenue and subscription revenue) is under intense scrutiny by investors, with many suggesting this company is likely to go the way of the Do Do in the long-term.

That being said, at some price, every company is a buy – Corus’ 8.3% yield has recently come under scrutiny for its safety, given the fact expectations are that cash flows will abate over time and the company will need to cut back on its distributions.

Following a relatively strong earnings report this past week, shares of Corus rebounded, as the company nearly doubled analyst earnings estimates. While not 100% safe in the long-term, Corus is a company I believe has been beaten up by the market unfairly, and could be a great pick for a 12-24 month hold.

Invest wisely, my friends.