RNW:CC - High-Yield Heroes: Canadian Dividend Stocks That Deliver Big Returns
2023-06-27 17:45:00 ET
Investing in dividend stocks would be an excellent investment strategy, as you can earn from dividends and stock price appreciation. Given their regular payouts, these companies are less susceptible to market volatility. Dividend stocks have historically outperformed the broader equity markets. Considering all these factors, here are three top Canadian dividend stocks with dividend yields of over 7% that you can buy right now.
NorthWest Healthcare Properties REIT
Amid rising interest rates and weak quarterly performances, NorthWest Healthcare Properties REIT ( TSX:NWH.UN ) has been under pressure over the last few months. Last week, the company announced the breakdown of its earlier announced stock sale in its United Kingdom joint venture, leading to a further decline in its stock price. The company trades over 50% lower than its 52-week highs.
Amid the steep correction, the company’s forward dividend yield has increased to 13.1%. Its price-to-book multiple has declined to 0.6, making it an attractive buy. Meanwhile, the company has adopted several deleveraging initiatives, such as selling non-core assets and lowering its stake in joint ventures.
Also, the company’s defensive healthcare portfolio continues to enjoy a higher occupancy rate, while inflation-indexed lease contracts protect against rising prices. So, despite the near-term volatility, I believe investors can buy NorthWest Healthcare to boost their passive income.
Enbridge
Another stock with a high dividend yield would be Enbridge ( TSX:ENB ). The midstream energy stock has been raising dividends for the previous 28 years. Its long-term contracts and regulated assets protect its financials from commodity price fluctuations, thus delivering stable cash flows and allowing it to raise its dividend consistently. The company currently pays a quarterly dividend of $0.8875/share, with its forward yield currently at 7.32%.
Meanwhile, Enbridge is progressing with its $17 billion secured capital program, which could boost its financials in the coming years. The company’s management expects its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) to grow by 4-6% through 2025 and around 5% afterward.
Also, its discounted cash flows (DCF) could grow at a CAGR (compound annual growth rate) of 3% through 2025 and 5% after that. So, I believe Enbridge is well positioned to continue its dividend growth, making it an attractive buy.
TransAlta Renewables
My final pick is TransAlta Renewables ( TSX:RNW ), which pays a monthly dividend of $0.07833/share. Its forward yield stands at a juicy 8.37%. The company, which operates a diversified portfolio of renewable and non-renewable power-producing facilities, sells its power through long-term contracts, which shields its financials from price fluctuations.
Meanwhile, the company hopes to rehabilitate its 13 wind facilities in Kent Hills in the second half of this year. It expects to start the commercial operation of its Northern Goldfields facility and complete the 132-kilovolt Mount Keith expansion project this year. These initiatives could boost its financials in the coming quarters, thus making its future payouts safer. Notably, the recent selloff has dragged the company’s valuation to attractive levels, with its next 12-month price-to-earnings multiple at 12.9.
So, given its high dividend yield, cheaper valuation, and healthy growth prospects, I believe TransAlta Renewables would be an excellent buy for income-seeking investors.
The post High-Yield Heroes: Canadian Dividend Stocks That Deliver Big Returns 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 and NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy .
2023