A MOTLEY FOOL CANADA SPECIAL REPORT

Cash Kings:
Three Top Dividend Stocks
to Help Your Portfolio Prosper
in 2017 and Beyond

Winter 2017
Cash Kings: Three Top Dividend Stocks to Help Your
Portfolio Prosper in 2017 and Beyond
by Bryan White

Dear Fellow Fools,

Welcome to our special Cash Kings: Three Top Dividend Stocks to Help Your Portfolio Prosper in 2017 and Beyond report. Our
mission here at Motley Fool Canada is to help investors achieve superior investment returns over the long haul. We’re long-term,
business-focused investors seeking out the very best investment ideas for your portfolio. And, we’re excited to present 3 dividend-
paying stocks that we believe will beat the market over the next 3 to 5 years.
Dividend paying stocks have been an integral part of successful investing portfolios for a very long time. As you’ll see in the graphs
below, dividend payers in the S&P/TSX Index have historically outperformed non-dividend payers and with less volatility. That’s a
very attractive combination, particularly for the increasing number of baby boomers preparing for, and entering, retirement.

Dividend-paying stocks have Dividend-paying stocks have displayed

outperformed over time lower volatility over time

Compound annual total returns Annualized volatility

10% 24%
10.3% 23%
8%
6% 16%
6.5% 16%
14%
4%
2% 8%
0.0%
0
Non-dividend Index Dividend
payers payers 0
Non-dividend Index Dividend
payers payers
Source: RBC Capital Markets Quantitative Research, data is calculated on an equal weight basis, S&P/TSX Source: RBC Capital Markets Quantitative Research, annualized volatility is calculated on an equal
Composite Total Return Index, December 1986 - December 2013. weighted basis, S&P/TSX Composite Total Return Index, December 1986 - December 2013.

We believe superior long-term returns are driven by a company’s ability to earn an above-average return on the capital invested in
the business. The beauty of a fundamentally strong company that pays a dividend to investors is the quarterly capital outlay forces
discipline upon the management team.
Companies that return a significant portion of their cash flow to investors in the form of a dividend must be disciplined with the
cash flow they choose to reinvest in the business. There’s simply less room for error than your average company that retains all of
its cash flow.
The three stocks ideas we’re presenting to you today exhibit strong business fundamentals and healthy returns on invested capital.
They also offer investors attractive dividend yields with the prospect of increasing their dividend payouts well into the future.
All of us here at Motley Fool Canada hope you enjoy our special report and wish you all the best on your way to achieving market
beating investment returns well into the future.
To your wealth,

Bryan White
Analyst, Motley Fool Canada

2 The Motley Fool Special Report — Winter 2017 fool.ca

 Brookfield Infrastructure
Brookfield Infrastructure is one of the largest owners and operators of infra- Headquarters Toronto, Ontario
structure assets in the world.
Website https://www.brookfield.com
Why buy:
Industry Infrastructure
• The privatization of global infrastructure is providing a healthy flow of
opportunity. Volatility Medium
• The financial backing provided by the Brookfield family is second to none.
Market Cap USD$8,049.9
• It has a current portfolio that’s well suited to generate strong, inflation-
protected cash flows. Cash/Debt $586/$8,820.0
$70 Revenue (TTM) $1,893.0
$60 Earnings (TTM) $192.0
$50 Total Inside Ownership 0.11%
$40
Recent Price CAD$44.29
$30
Yield 4.7%
$20
TTM = Trailing 12 Months
$10
Dollar amounts in millions except recent price.
$0 Data as of November 25, 2016
2
2
2
2
2
12
3
3
3
3
3
13
4
4
4
4
4
14
5
5
5
5
5
15
6
6
6
6
6
16
11
1/1
3/1
5/1
7/1
9/1

1/1
3/1
5/1
7/1
9/1

1/1
3/1
5/1
7/1
9/1

1/1
3/1
5/1
7/1
9/1

1/1
3/1
5/1
7/1
9/1
11/

11/

11/

11/

11/
11/

While there are several entities to choose from within the
Brookfield family, Brookfield Infrastructure Partners
(TSX:BIP.UN)(NYSE:BIP)—which we’ll refer to as BIP from
here on out—is the one that has us most intrigued. An estab-
lished portfolio of unique infrastructure assets that generate
some of the world’s most reliable cash flows and an opportunity
to grow as the privatization of this asset class gathers steam pro-
vide a one-two punch that your portfolio is likely to appreciate
for many years to come.
Should things work out as planned, with a world-class
management team that Brookfield is renowned for at the helm,
we foresee that this might be one of the most relaxing ways to
earn a market-beating return that we’ve recommended thus far.
Sit back, relax, and let the dividends and potential for capital
appreciation roll.
The business
BIP is a spin-out from big brother Brookfield Asset
Management (TSX:BAM.A)(NYSE:BAM), which still owns
a 30% stake in the business. This is a common occurrence at
BAM, and it has several publicly traded subsidiaries, all associ-
ated with “real assets.”
As alluded to, BIP owns a unique set of infrastructure assets
that generate substantial cash flows and, in most cases, require
minimal maintenance capital expenditures. We’re talking
things like transmission towers, toll roads, railroads, ports,
and pipelines that are virtually essential to day-to-day life,
even though they do tend to play a behind-the-scenes kind
of role. These assets typically operate with long-life contracts
with credit-worthy counterparties and offer a built-in inflation
hedge, which ensures their returns are at least consistent from
year to year. About 70% of the company’s cash flows are
indexed to inflation.
At the moment, the company’s cash flows support the
nearly-5% dividend yield offered by the stock. However, this
company is well known for increasing that dividend thanks to
the reliability of the underlying stream of cash its assets pro-
duce. We expect this trend will continue, leaving the potential
for an effective yield on our cost base that’s much higher in five
years’ time.
Just getting warmed up
The current portfolio of cash-generating, unique assets is
but phase one of the BIP opportunity, however. While the
cash that these assets generate provides a base line, there are
two more phases that are just as, if not more, enticing for
long-term investors.
One of these phases is BIP’s opportunity to put new capital to
work. BIP is in the envious position of not only having access
to a deep pool of capital (thanks in part to its affiliation with
BAM), but it operates in an asset class that allows this capital
to be invested at highly attractive rates—especially when we
consider the current low interest rate environment.
Specific opportunities that stand to provide ample returns on
new capital for years to come include:

fool.ca Special Report — Winter 2017 The Motley Fool 3

 • The acquisition of Asciano, an Australian port-and-
rail-logistics business. The transaction ended up being
a touch complex, however; in the end, BIP will invest
$350 million and end up with 50% ownership of Asci-
ano’s port business and 100% of the bulk ports services
business, which transports cars, grain, etc.
• A $200 million investment into the construction of
1,200 kilometres of electricity transmission lines in
Brazil over the next five years.
• The continued buildout of its natural gas transmission
and storage business in North America. This includes the
acquisition of Niska Gas Storage (NYSE:NKA) as well
as a bevy of natural gas pipeline expansion projects.
These, however, just scratch the surface as BIP stands with a
total backlog of $2.3 billion in organic growth opportunities—
an all-time high.
The other phase that we’re referring to involves recycling
capital. That is, selling mature assets from the portfolio and
re-investing that capital into opportunities that offer a more
attractive potential return. Brazil is actually a perfect example
of this dynamic in action as the company sold its transmis-
sion assets in 2009 for $270 million and an IRR of 32%.
Opportunity has returned to Brazilian transmission, and so too
has BIP and its capital.
In 2016 alone, the company completed the sale of Cross
Sound Cable for an IRR in excess of 30%, it sold its UK gas
distribution business for an IRR in excess of 30% and sold its
Ontario transmission business at an IRR ~20%.
It has a core portfolio of cash-generating assets to support
the dividend and lots of opportunities to deploy fresh capital,
as well as internally recycled capital for growth—a friendly
trifecta for the long-term investor, especially in today’s market.
Risks and considerations
Though BIP owns and invests in “real assets,” understand
that at its core, this is a financial entity. Not unlike a bank, BIP’s
mission, and well-being, is based on its ability to raise capital
at a rate that’s lower than the rate at which it can invest that
capital—the bigger the spread, the better.
Aside from having its financial house in order—$3 billion
in total liquidity, well-laddered debt maturity profile, and most
debt is non-recourse—two further items provide confidence
that this raise low/invest high–spread relationship will hold.
One, the presence of big brother BAM is a key component to
this story. You see, infrastructure spending used to be an asset
class dominated by government. Typically, government was the
only game in town when it came to having the ability to fund
these assets. As government balance sheets around the world
are stretched and infrastructure spending can’t stop, private
4 The Motley Fool Special Report — Winter 2017
enterprise has moved in. Deep pockets remain a critical piece
of the pie, putting a ring fence of sorts around entities that can
truly fill the void left by government. Thanks to the backing and
unique access to capital that BAM provides, BIP is well within
that ring fence, which means they’re typically in an envious
position when it comes to securing deal terms.
The other component to consider is the fact that Brookfield
is an operator. This separates it even further from the competi-
tion. Not only does it have access to low-cost capital, given
its operational capabilities, it’s able to take on some of the
more downtrodden opportunities that exist. It can acquire these
poorly run (sometimes legacy government) outfits, which
generally come at a more attractive price point, implement their
operational excellence, and end up with a return far in excess of
what a purely financial player might extract.
To be sure, things can still go bump in the night. Any entity
that’s wheeling and dealing and investing the kind of capital
that BIP does on a regular basis opens itself to a mistake or
three along the way. Things don’t always go as planned—it’s as
simple as that. Not only does risk exist on a project level, given
its global operations, country and geopolitical risk are worth
noting as well. For example, the Asciano transaction mentioned
earlier significantly increases BIP’s exposure to China. A long
recession on that front is sure to have a negative impact.
Foolish bottom line
Trading at 2.1 times book value and with a distribution yield
near 5%, BIP doesn’t look horribly expensive, although it’s cer-
tainly traded more cheaply in the past. The long-term historical
average book value multiple is 1.4 times. There’s reason to
believe we could revert somewhat on this front, whether it be a
general market sell-off, a lift in interest rates, or something more
company specific that’s unforeseeable at this point. A pullback,
however, especially if it’s market related, in our opinion, would
only spell opportunity.
We are partial to “buying in thirds,” and this is another that
we think jives with this strategy. If investors are interested in
adding BIP, perhaps consider what constitutes a full position
looks like in a portfolio and then go out and buy a third of that
position. Collect the dividend, let it simmer, and as time goes
on, ideally, opportunities will arise for investors to add at an
even more attractive valuation.
fool.ca
 Verizon
Verizon is the leading provider of landline phone service in the U.S., and Headquarters New York, New York
Verizon Wireless is the leading provider of mobile phone service.
Website www.verizon.com
Why buy: Industry Telecommunications
• Dominant position in utility-like industry.
Volatility Low
• Reliable source of income in a low-rate environment.
Market Cap USD$206,563
• Continued increase in network use provides potential for capital
appreciation. Cash/Debt $6,441/$106,593
Revenue (TTM) $127,894
$100
Earnings (TTM) $14,023
$80
Total Inside Ownership 0.03%
$60 Recent Price $50.67
$40 Yield 4.6%

$20 TTM = Trailing 12 Months

$0 Dollar amounts in millions except recent price.

Data as of November 25, 2016
1/ 1
12
12
12
12

11 2
1/ 2
13
13
13
13

11 3
1/ 3
14
14
14
14

11 4
1/ 4
15
15
15
15

11 5
1/ 5
16
16
16
16

11 6
6
/1

1
/1

1
/1

1
/1

1
/1

1
/1
3/
5/
7/
9/

3/
5/
7/
9/

3/
5/
7/
9/

3/
5/
7/
9/

3/
5/
7/
9/
11

Few sectors in the market are as well-suited to paying a healthy
dividend as the telecommunications sector. One key difference
we’d like to highlight with regards to Verizon Communications
(NYSE: VZ) versus, say, Rogers Communications (TSX:
RCI.B) is that U.S. dividends flow into an RRSP account
without being subjected to withholding tax; that’s not the case
when U.S. dividends flow into non-registered accounts, as well
as TFSAs and RESPs. So, be aware of your individual situation
when examining U.S. dividend payers.
Now, enough with the logistics. Let’s meet this behemoth!
Background
Aside from its healthy yield, the thing that jumps off the
page for me about Verizon is its size. Its $206 billion market
cap ranks among the top 10% of U.S.-listed companies. Things
get even more interesting when we start stacking up the size of
Canada’s “Big 3” telecoms against this U.S. giant.
With revenue over the past 12 months of $127 billion,
Verizon’s top line is 3.5 times bigger than the top line of BCE,
Telus, and Rogers … combined! In my view, this size differ-
ence was a big reason Verizon turned its nose at the Canadian
wireless business, which it reportedly explored a while back.
Simply, our market is too small to matter.
Though it’s incredibly large, Verizon was only born at
the turn of the century when a merger between Bell South
and GTE was consummated. In addition, prior to 2014,
U.K.-based telecom giant Vodafone owned 45% of Verizon
Wireless. Verizon took advantage of the current low-rate
environment and borrowed heavily to buy out Vodafone’s
position (for a mere $130 billion).
The company operates with three divisions: Wireless,
Residential and Small Business, and Enterprise. Wireless is the
big dog, representing nearly 70% of the company’s revenues
and nearly all of its operating profit. The company’s 4G LTE
wireless network is the most comprehensive in the U.S. and
reaches over 300 million Americans.
Its legacy landline telephone business is in decline, as you
might suspect, but in 2005 Verizon introduced a fibre-optic cable
offering by the name of FiOS that now dominates this segment
of the business, representing ~35% of wireline revenues. The
introduction of this cable offering allowed Verizon to bundle a
collection of services, thus bolstering its competitive position.
Lots to Like
When it comes to telecom companies, big is beautiful, and
Verizon is the biggest and most beautiful of the bunch. It has the
best network in the U.S. It’s the leader in terms of profitability.
And it features the lowest subscriber churn. But don’t take my
word for it—none other than Warren Buffett recognized these
same virtues by plunking down more than half a billion dollars
to acquire a chunk of Verizon back in 2014.
And just like Rogers, it’s the company’s network that is
really at the heart of the story. Not only does it provide society
with the connections we crave, it underscores a really cool busi-
ness model. As these networks are prohibitively expensive to
establish, new ones aren’t just cropping up every day. Network
owners have very sizeable competitive advantages and moats
surrounding their business. In addition, because fixed costs are
high, adding new customers is virtually free. The more the mer-
rier, and though Verizon’s absolute customer growth may slow,
network usage is expected to continue to march higher.

fool.ca Special Report — Winter 2017 The Motley Fool 5

 You see, Verizon (again, just like Rogers), stands to benefit
from society’s trend toward increased levels of interconnec-
tivity. As wireless devices continue to proliferate, and more
“things” (cars, ovens, thermostats, etc.) become connected, net-
work capacity must exist to support this proliferation. Verizon’s
got the network, and we expect this network will only become
more valuable in the future.
Big Spenders on Digital Advertising
Section from Paul Chi, Analyst, Million Dollar Portfolio
Verizon Communications has been in the news most recently
for its pursuit of Yahoo (NASDAQ: YHOO), which it intends
to acquire for $4.8 billion. The proposed deal adds another
layer to Verizon’s strategy of improving its content and adver-
tising capabilities. A year ago, Verizon’s $4.4 billion acquisition
of AOL gave a jump-start to that strategy. Here’s what CEO
Lowell McAdam said about the acquisition:
“Just over a year ago we acquired AOL to enhance our
strategy of providing a cross-screen connection for
consumers, creators and advertisers. The acquisition of
Yahoo will put Verizon in a highly competitive position as
a top global mobile media company, and help accelerate
our revenue stream in digital advertising.”
Assuming the Yahoo deal closes successfully, that’s now
$9.2 billion that Verizon has committed to its digital advertising
strategy. That’s a lot of money, but it’s peanuts compared to
Verizon’s total valuation. The real moneymaker continues to be
the company’s wireless business.
Moving forward, we’re going to look for Verizon to continue
making moves to protect its turf on the wireless network front.
Wireless data traffic usage is growing rapidly and Verizon is one
of the companies in prime position to get its fair share of profits
from this trend. As the owner of the best network in the United
States, Verizon boasts bigger cash flow and deeper pockets with
which it can reinvest in the technologies of the future. Managed
correctly, Verizon could be a cash cow for many years to come.
Digital advertising revenue is nice, but we want to see a focus
on the network, first and foremost.
Valuation
Though the network stands to become more valuable over
the course of time, the sanctity of the dividend is probably the
most prominent feature of Verizon as an investment. Because
of this, we can apply an old valuation technique known as the
“Gordon Growth Model” to assess the expectations and as-
sumptions baked into Verizon’s stock at current levels.
At $2.31 per share and the stock priced at around $50 per
share, according to the model and the reasonable assumptions
we’ve made, the market does not appear to be pricing in any
future dividend growth.
Analysts expect 7% to 8% earnings growth out of Verizon
6 The Motley Fool Special Report — Winter 2017
in the coming years. The company’s past, illustrated in the
chart below, indicates that this is likely to translate into a higher
dividend. As we are not currently paying for future dividend
increases, capital appreciation should occur as they happen,
meaning this is more than just a yield play.
VZ Historical Dividend/Share
$2.5
CAGR = 3.1%
$2.0
$1.5
$1.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e
Risk and Considerations
The market tends to focus on the entire telecom sector for its
income-generating capabilities. It’s a sector that is particularly
susceptible to interest rate moves. As rates can’t really go any
lower, at some point, a move higher will have a negative impact
on this stock. It’s anyone’s guess where Verizon’s stock will be
when that day arrives.
The other impact that higher rates may have is on the consid-
erable load of debt that Verizon carries. Because of its stable,
recurring cash flows, it can handle this load, and its maturity
schedule is nicely balanced. Still, this story is not without at
least a hint of financial risk.
It’s also important to emphasize that even though Verizon has
well-established networks, both wireless and fixed, the sands
are constantly shifting under the telecommunications world.
Consumption patterns are changing, the old landline business is
eroding, and competition—both on pricing and for investments
like spectrum—continues to evolve. Though there’s no indica-
tion of this occurring, the company cannot become stagnant.
Resting on its laurels could result in a comeuppance.
Bottom Line
First and foremost, this is a dividend stock, and should be
treated as such. In our mind, it’s one that can be socked away—
again, possibly in an RRSP—and essentially forget about for
the next 10 or more years. Harvest that 4.6% yield for now, and
when all is said and done, as the dividend grows over the next
decade as we expect that it will, the effective yield should be
considerably higher than that.
Dividend hikes are likely to result in a higher stock price,
but that’s not the only way we see some capital appreciation
working its way into the mix. Verizon’s network could become
more valuable than anyone expects, and with an assortment of
high-tech offerings in the stable, we could all be very pleasantly
surprised on this front. While there are risks associated with
every company, based on its competitive position and the assets
under its control, Verizon is better positioned than most to
handle whatever comes its way.
fool.ca
 ZCL Composites
ZCL Composites is the largest provider of fibreglass underground Headquarters Edmonton, Alberta
storage tanks in North America.
Website www.zcl.com
Why buy:
Industry Oil & Gas Equipment/Services
• Demand should remain healthy as the market continues to transition
from steel to fibreglass tanks. Volatility Medium
• Its strong competitive position should be sustainable. Market Cap USD$274
• Low capital requirements to run the business increases its ability to Cash/Debt $28.3/$0
increase its dividend payout in the future.
Revenue (TTM) $150.6
$50 Earnings (TTM) $9.6
$40 Total Inside Ownership 10.65%

$30
Recent Price CAD$12.17
Yield 2.7%
$20
TTM = Trailing 12 Months
$10
Dollar amounts in millions except recent price.
$0 Data as of November 25, 2016
1/11
2
2
2
2
11 2
1/12
3
3
3
3
11 3
1/13
4
4
4
4
11 4
1/14
5
5
5
5
11 5
1/15
6
6
6
6
11 6
/16
/1

3/1
5/1
7/1
9/1
/1

3/1
5/1
7/1
9/1
/1

3/1
5/1
7/1
9/1
/1

3/1
5/1
7/1
9/1
/1

3/1
5/1
7/1
9/1
11

For long-term investors like us at Motley Fool Canada some-
times boring businesses can make for great investments. This
is especially true for those operating in niche industries with
little in the way of competition. As investors we know boring
businesses have a way of flying under-the-radar in the market,
but they also can find themselves free of fierce competition.
This can result in solid long-term investment opportunities for
Foolish investors. ZCL Composites (TSX:ZCL) is a good old
fashioned boring business offering investors a nice balance of
upside potential and dividend yield.
ZCL Composites makes fiberglass reinforced storage tanks
used for underground fluid containment. The company’s core
business involves the replacement of legacy steel fuel tanks
at gas stations, convenience stores and truck stops. They also
have a faster growing segment that serves the underground
water storage market. Demand for its underground water tanks
typically comes from a diverse set of industries and is tied to
general construction activity.
old steel tanks due to concerns surrounding the internal cor-
rosion of steel tanks. In fact, the U.S. EPA recently issued a
notice highlighting the risk associated with this corrosion. This
provides ZCL a healthy replacement opportunity over the next
3 to 5 years. The company estimates that 15% to 20% of the
retail fuel tanks installed today are more than 30 years old and
50% to 60% are older than 20 years.
Competition
As you’ll see in the graph below ZCL enjoys a distinct
competitive advantage as the largest player in the market
in North America. The company is the clear market leader
for underground storage tanks in Canada with approx. 85%
market share. In the U.S., ZCL is one of the top 2 manufac-
turers with around 50% market share. CSI Denali is the only
other fiberglass tank manufacturer of scale serving the North
American markets.
Estimated North American Petroleum UST Market Share
60%

ZCL’s fiberglass tanks are non-corrosive offering a much 50% ZCL

more suitable option than legacy steel tanks. They provide an
environmentally friendly option and also offer a longer life than 40%

steel tanks. The shift to fiberglass tanks is already underway 30%

CSI
as steel only represents around 15% of the new tanks sold in 20%

N. America today. Currently the company is benefitting from 10% Steel

strong demand in the U.S. as large retailers and convenience
0%
store chains expand and compete for market share. 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

*Source: Company presentation

The replacement market also provides another strong
source of demand for the company. Steel tanks still make up The current relationships that ZCL enjoys with its current
around 50% of the installed base of tanks here in N. America. customers will make it very difficult for new entrants to compete
Increasingly companies are considering swapping out their out and gain market share. This is strengthened by the potential for

fool.ca Special Report — Winter 2017 The Motley Fool 7

expensive liabilities associated with an environmental damage
that could occur with a faulty underground tank.
Dividend Rising
During the first quarter of 2016 the company showed a sign
of confidence by paying shareholders a one-time special divi-
dend of $0.50 per share or $15 million in total. The company
also raised its quarterly dividend by 60% to $0.08 which puts
the stocks yield at 2.6%. This signals strength in demand for the
business and confidence in its ability to generate cash moving
forward. With a strong balance sheet and relatively low capital
requirements I expect the company to continue rewarding
shareholders with future dividend increases and the occasional
special dividend. The company aims to payout around 50% of
funds from operations in dividends.
can be painful for shareholders, in ZCL’s case it would likely
open up an even better buying opportunity.
The longer-term risk for ZCL is a loss of market share from
their primary competitor or others that enter the market. The
company’s strong relationships with gas station chain operators
should help alleviate this risk, but if ZCL starts losing market
share it could signal a reason to consider selling your shares.
Foolish Bottom Line
Besides being a nice boring business, ZCL has a number of
qualities I look for in investments. I like the company’s clean
balance sheet and commitment to return cash to shareholders;
strong competitive position; low capital requirements; healthy
growth runway; and insiders own nearly 11% of the company.
There’s a lot to like in ZCL Composites.

Financials & Valuation

ZCL boasts a clean balance sheet with zero debt and $38 mil-
lion in cash. After paying its special dividend in the first quarter
the company’s cash balance dropped from $41 million to $23
million. By the end of the third quarter of this year the company
had recouped nearly all of that cash. This is primarily due to
the company’s ability to generate a healthy dose of free cash
flow from its operations. ZCL has been free cash flow positive
in each of the past five years, and 9 out of the past ten years.
The other aspect of the business that allows it generate positive
cash flow is the low capital requirements to run the business.
ZCL typically only spends 1% to 2% of revenue on capital
expenditures.
After ditching its aboveground storage tank business earlier
this year ZCL’s profit margins are set to improve. This was a
non-core, underperforming business that was suffering after the
rout in oil markets. Moving forward the company’s normalized
gross margins should shake out around 24% with operating
margins in 12% to 14% range.
I conservatively estimate the company should be able to
grow earnings and cash flow around 10% annually, on average,
for the next 3 to 5 years. With an enterprise value of $337 mil-
lion and $36 million in free cash flow over the trailing twelve
months the stock is reasonably priced. With an enterprise
value-to-free cash flow multiple of just 9 times investors could
be looking at annualized returns of at least 10% to 12%, and
that’s before accounting for the dividend payouts.

Risks
ZCL is a small hardware company without any meaningful
sources of recurring, consumables revenue. This means busi-
ness can be lumpy from quarter-to-quarter as customer orders
have the potential to get pushed into future periods. As many of
you already know the stock market can punish companies that
exhibit volatility from quarter-to-quarter. While the volatility

8 The Motley Fool Special Report — Winter 2017 fool.ca

 Cash Kings: Three Top Dividend Stocks to Help Your Portfolio
Prosper in 2017 and Beyond

Want to find even more great dividend-paying stocks?

If so, here’s an exciting announcement from our General
Manager of Motley Fool Global, Brian Richards…

Dear Reader,
I hope you enjoyed the free report that my good friend and long-time colleague, Bryan
White, has put together for you -- and that you’ll be able to put this valuable information
to good use in your own portfolio going forward.
Speaking of which… in a recent survey, an astounding 98.9% of our Motley Fool
Canada readers and members told us they would like more guidance on which dividend-
paying stocks to buy and when.
(And given the incredible statistics Bryan shared in his introduction it’s certainly not hard to see why!)
If you count yourself among that vast majority, then I’d like you to know that while this free report is obviously our first
step toward providing you with exactly the kind of dividend-focused solutions you want... it’s most definitely not the last.
In fact, in the coming weeks you’ll be hearing more about everything we’re busy working on behind the scenes in order
to meet investors like you on your own terms…
Including an exciting new resource designed specifically for those investors who want to be able to harness the awesome
wealth-building power of dividend-paying stocks -- without having to spend an extraordinary amount of time and effort in
the process.
Everyone here is extremely excited about what we have to offer you, and we’ll be in touch the moment we have more
details to share.
Until then, please enjoy this report and have a great holiday season and prosperous New Year!
To making 2017 your most profitable year yet,

Brian Richards
General Manager
Motley Fool Global

fool.ca Special Report — Winter 2017 The Motley Fool 9

 Disclosure: All figures as of November 25, 2016. All dollar amounts are represented in Canadian Dollars, unless otherwise
noted. As of the most recent update (November 25, 2016), The Motley Fool recommends Brookfield Infrastructure Partners
and Verizon Communications.
This report is: (a) for general information purposes only and not intended as investing advice; and (b) not to be used or
construed as an offer to sell, a solicitation of an offer to buy, or an endorsement, recommendation, or sponsorship of
any entity or security by The Motley Fool Canada, ULC, its employees and affiliates (collectively, “TMF”). This report
represents the opinion of the individual author and does not attempt to give you professional financial advice or advice that
relates to your personal circumstances.
© copyright: 2016 The Motley Fool Canada, ULC. All rights reserved.
The Motley Fool, Fool and the Jester logo are registered trademarks of The Motley Fool Holdings, Inc.
Published by: THE MOTLEY FOOL CANADA, ULC 1959 UPPER WATER STREET P.O. BOX 997 HALIFAX , NOVA
SCOTIA B3J 3N2 NOVEMBER 2014
This publication is for general information purposes only.
The studies in this report are not complete analyses of every material fact regarding any company, industry, or investment
and they are not “buy” or “sell” recommendations.
This publication is provided with the understanding that the authors and publisher are not engaged in the rendering of
personalized investment advice. It also should not be used or construed as an offer to sell, a solicitation of an offer to buy,
or an endorsement, or sponsorship of any entity or security by The Motley Fool and its affiliates.
The opinions expressed here are subject to change without notice, and the authors and The Motley Fool make no warranty
or representations as to their accuracy, usefulness, or entertainment value. Data and statements of facts were obtained from
or based upon publicly available sources that we believe are reliable, but the individual authors and publisher reserve the
right to be wrong, stupid, or even foolish (with a small “f”).
Remember, past results are not necessarily an indication of future performance.
The authors and publisher specifically disclaim any responsibility for any liability, loss, or risk, personal or otherwise,
incurred as a consequence, directly or indirectly, of the use and application of any contents of this publication.
Without limiting the rights under copyright reserved above, no part of this publication may be reproduced or distributed in
any form or by any means, or stored in a database or retrieval system, without the prior written permission of The Motley
Fool Holdings, Inc.

10 The Motley Fool Special Report — Winter 2017 fool.ca

 www.fool.ca
Helping the World Invest Better
fool.ca Special Report — Winter 2017 The Motley Fool 11