TD:CC - Is it Too Late to Buy These 3 Brilliant Passive Income Stocks?
2024-02-27 20:00:00 ET
Well, the stock market is heading higher again, up 7.8% in the last year and 1.8% year to date. While this is obviously welcome news, it may have some of us wondering if we’ve missed out. But it’s never too late to buy quality passive income stocks.
Don’t worry about market timing, and try to keep your focus on the long term .
Enbridge: A 7.84% passive income stock
The first passive income stock that I’d like us to consider is Enbridge Inc. ( TSX:ENB ). Enbridge is one of North America’s leading energy infrastructure companies. The company’s diversification and North American footprint position it well for future growth and stability. For example, Enbridge has infrastructure in four different businesses: liquids, natural gas, gas utilities and storage, and renewable energy .
It is this portfolio of assets that continues to drive Enbridge’s strong cash flows and dividend growth, making it a top passive income stock to own today. When it comes to Enbridge stock, it is actually very likely one of the best times to buy. Enbridge is currently yielding 7.84%. It has 29 consecutive years of dividend increases under its belt, and expected continued dividend growth.
Enbridge’s cash flows are resilient, predictable, and safe, all of which make it a top passive income stock to buy today.
Fortis
As far as dependable passive income stocks go, Fortis Inc . ( TSX:FTS ) is one of our best bets. Currently trading just over $52, with a dividend yield of 4.53%, Fortis stock is as dependable as they get. In fact, the company has a 50-year track record of increasing dividends. It’s a record that’s unmatched and one that we can expect to continue.
You see, Fortis is a leading North American utility company, with its essential services supplying the power we need to live and work. It’s clearly a highly defensive business whose dividend is backed by this defensive business as well as a regulated revenue profile.
Looking ahead, Fortis’ dividend is expected to grow between 4% and 6% annually through to 2028. Management has the utmost confidence in this target due to the predictable and defensive nature of its revenue and cash flows.
TD Bank
Toronto-Dominion Bank ( TSX:TD ) is another company that’s backed by a strong history, a diversified business, and a pretty reliable and resilient business model. But beyond this, TD Bank is also backed by its financial strength and leading banking brand.
TD Bank stock is currently yielding a very generous 5%, a function of its stock price decline as well as continued dividend increases over the years. In fact, since 2019, TD Bank has increased its dividend by 38%, or at a compound annual growth rate (CAGR) of 6.6%. In TD Bank’s latest quarter, the third quarter of fiscal 2023, the bank reported solid revenue growth of 12%, but adjusted net income fell 2.2% to $3.7 billion. This translated to a 10% decline in reported EPS and a 5% decline in adjusted EPS.
These results help to explain TD Bank’s stock price performance in the last year. As you can see from TD Bank’s stock price graph below, it has fallen 25% from its 2022 highs. While this is not good for current shareholders, it does present an opportunity for patient, long-term passive income investors.
Because TD Bank has proven itself to be resilient, it has survived and thrived in many difficult environments. Today, the bank is faced with another one. Though investors who buy the stock now for passive income will receive a 5% dividend yield.
The post Is it Too Late to Buy These 3 Brilliant Passive Income Stocks? appeared first on The Motley Fool Canada .
Fool contributor Karen Thomas has a position in TD Bank and Enbridge. The Motley Fool recommends Enbridge and Fortis. The Motley Fool has a disclosure policy .
2024