TRP:CC - Boost Your Passive Income With These 3 High-Yielding Dividend Stocks
2024-03-23 09:45:00 ET
Dividend stocks generate a stable passive income. Meanwhile, investors can utilize the income to cover expenses in this inflationary environment or buy additional stocks. Given their stable cash flows and consistent payouts, dividend stocks are less susceptible to market volatility, thus providing stability to your portfolios. Historically, dividend stocks have outperformed the broader equity markets.
Considering all these factors, you can buy the following three dividend stocks that offer over 7% of dividend yields.
Enbridge
Enbridge ( TSX:ENB ) is a top dividend stock to buy now due to its impressive dividend-growth record and high yield. Supported by its diversified, low-risk pipeline business, the midstream energy company earns stable and predictable earnings, allowing it to reward its shareholders with consistent dividend growth. Enbridge has been paying dividends for the last 69 years and raising the same for the previous 29 years. With a quarterly dividend of $0.915/share, it currently offers a forward dividend yield of 7.52%.
Further, Enbridge is expanding its asset base and expects to put $8 billion of assets into service by the end of next year. After acquiring East Ohio Gas Company earlier this month, the company is working on acquiring two other natural gas utility assets, which could make it the largest natural gas utility company in North America. The increased cash flows from low-risk utility assets could further stabilize its cash flows. Also, the company’s financial position looks healthy, with its debt-to-equity ratio at 4.1.
Considering all these factors, I believe Enbridge would be an excellent dividend stock for income-seeking investors.
BCE
Another high-yielding dividend stock I am bullish on is BCE ( TSX:BCE ), one of Canada’s top telecom players. Telecom companies earn stable cash flows due to their recurring revenue streams. The expanding customer base and growing ARPU (average revenue per user) amid increasing demand for telecommunication services in this digitally connected world have driven the company’s financials, thus allowing it to raise its dividends consistently. It has increased its dividends for 16 consecutive years, while its forward yield is at a juicy 8.61%.
Meanwhile, BCE has been under pressure over the last few months due to the unfavourable decision of the CTRC (Canadian Radio-television and Telecommunications Commission). In November, the CTRC mandated large telcos share their fibre-to-the-home (FTTH) networks with smaller players to increase competition. However, the decision would disincentivize large telcos, which have substantially invested in expanding their fibre networks.
- We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if Well Health made the list!
Despite the near-term weakness, BCE’s long-term growth potential looks solid amid digitization and its expanding 5G infrastructure. Also, the recent correction has dragged its NTM (next-12-month) price-to-earnings multiple down to 15.1, making it an excellent buy.
TC Energy
TC Energy ( TSX:TRP ) is another Canadian company that offers over 7% of dividend yield. The midstream energy company has been raising dividends since 2000 at an annualized rate of 7%. With around 97% of its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) underpinned by rate-regulated and long-term contracts, the company’s cash flows are predictable, allowing it to raise dividends. Meanwhile, it currently pays a quarterly dividend of $0.96/share, with its forward yield currently at 7.11%.
Further, TC Energy has planned to invest around $8.5-$9 billion this year and expects to put $7 billion of assets into service. After selling the Portland Natural Gas Transmission System earlier this month, the company is working on divesting Prince Rupert Gas Transmission Holdings. These initiatives could aid the company in achieving its targeted debt-to-EBITDA ratio of 4.75 by the end of this year. So, given its improving financial position, healthy growth prospects, and high yield, I believe TC Energy would be an excellent buy right now.
The post Boost Your Passive Income With These 3 High-Yielding Dividend Stocks appeared first on The Motley Fool Canada .
Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy .
2024