WCP:CC - 3 Dividend Stocks Currently Yielding More Than 7%
2023-11-29 16:00:00 ET
Your portfolio will not be complete with few quality dividend stocks . Given their regular payouts, these companies are less susceptible to market variations. Dividend stocks have outperformed the broader equity markets historically. Having seen the advantages of dividend stocks, you can buy the following three stocks that offer over 7% yield.
TC Energy
TC Energy ( TSX:TRP ) transports oil and natural gas across North America through a pipeline network. It also operates seven power-generating facilities with a total production capacity of 4.3 gigawatts. It generates around 95% of its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) from regulated assets and long-term contracts. So, its cash flows are stable irrespective of the economic outlook, thus allowing it to raise its dividend at an annualized rate of 7% since 2000. With a quarterly dividend of $0.93/share, it currently offers a healthy forward dividend yield of 7.34%.
Meanwhile, the midstream energy company is working on spinning off its liquids segment, which could improve the financial flexibility to pursue the growth objectives of both companies. Further, the company is also strengthening its financial position by reducing its debt levels. It recently sold a 40% stake in Columbia Gas Transmission and Columbia Gulf Transmission, generating net proceeds of $5.3 billion. Amid these cash flows, the company intends to lower its debt/EBITDA ratio of 4.75 by 2024.
Further, TC Energy has planned to invest around $6-$7 billion annually, which could boost its financials and allow it to maintain its dividend growth. The company’s management hopes to raise its dividend by 3-5% annually in the next few years. So, I believe TC Energy would be an excellent buy.
BCE
Second on my list is BCE ( TSX:BCE ), which offers an excellent forward yield of 7.27%. Since 2020, the company has made a capital investment of $17.55 billion to expand its 5G, 5G+, and high-speed pure fibre services. By the end of this year, the company hopes to provide 5G and 5G+ services to 85% and 46% of the Canadian population, respectively. Further, it is confident of adding 650,000 new broadband connections this year.
Amid these growth initiatives, the company is well positioned to benefit from the growing demand for telecommunication services. So, I believe the company’s future dividend payouts will be safe. Meanwhile, the telco has also rewarded its shareholders by raising its dividends by over 5% yearly for the previous 15 years, making it an attractive buy.
Whitecap Resources
My third pick is Whitecap Resources ( TSX:WCP ), an oil and natural gas production company. Despite an increase of 7.7% in its production, the company’s revenue declined by 10.7%. The lower average realization price across crude oil, natural gas, and NGL (natural gas liquids) dragged its top line down. Besides, its diluted EPS (earnings per share) and fund flows declined by 52.8% and 13.6%, respectively. Meanwhile, the company has strengthened its financial position by lowering its debt from $2.19 billion to $1.26 billion.
Further, the company’s management has planned to increase its production capacity through an investment of $1 billion to $1.2 billion next year. Amid these investments, it expects to increase its production to $162,000-$168,000 barrels of oil equivalent per day. The midpoint of the guidance represents a 5% increase from its 2023 guidance. The management is confident of maintaining this production growth in the upcoming years, thus reaching $200,000 barrels of oil equivalent per day by 2027.
Given these growth prospects, I believe WCP’s future dividend payouts will be safe. Meanwhile, it currently pays a monthly dividend of $0.0608/share, with its forward yield at 7.8%.
The post 3 Dividend Stocks Currently Yielding More Than 7% appeared first on The Motley Fool Canada .
Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Whitecap Resources. The Motley Fool has a disclosure policy .
2023