EMA:CC - My Top 5 Dividend Stocks for Passive Income Investors to Buy in August
2024-07-26 16:20:00 ET
Owning top dividend stocks and generating consistent passive income is one of the best ways to put your hard-earned money to work for you. In Canada, there are plenty of high-quality companies that pay significant dividends to consider adding to your portfolio today.
So, if you’ve got cash that you’re looking to invest to help boost the passive income your portfolio generates, here are my top five Canadian dividend stocks to buy in August.
Two top energy stocks for dividend investors to buy now
The energy industry is filled with high-quality dividend stocks that can earn you significant passive income. However, while there is a tonne of choice for investors, two of the best to buy are Freehold Royalties ( TSX:FRU ) and Enbridge ( TSX:ENB ).
Freehold is an ideal stock because it consistently earns royalty income from energy companies that use its land to produce their oil and gas.
This simple business model not only has less risk than a traditional energy producer, it also means Freehold needs to spend a lot less on capital expenditures (CAPEX), leaving more cash to return to investors.
Furthermore, since its CAPEX requirements are low, Freehold can keep its payout ratio manageable, which not only ensures that its dividend is sustainable but also leaves the company with excess cash to invest in acquiring more land and expanding its operations.
Plus, with Freehold trading off its highs, it currently offers an impressive dividend yield of roughly 7.6%.
Enbridge is another top dividend stock due to its essential operations, massive size, and considerable diversification . Not only does it transport roughly 30% of all the oil produced in North America and roughly 20% of all the natural gas consumed in the United States, but it also has investments in a massive utility and energy storage services, and has a growing renewable energy portfolio.
It’s also worth noting that because Enbridge owns many long-life assets, it’s consistently generating billions in free cash flow, which it uses to invest in future growth and pay its significant dividend, which has a yield of more than 7.2% today.
Two top stocks to buy as we transition to cleaner energy
Speaking of energy, two more of the top dividend stocks to buy in August are Brookfield Renewable Partners ( TSX:BEP.UN ) and Emera ( TSX:EMA ).
As the world continues to try and lower emissions, both Brookfield, a stock with cleaner energy generating assets, and Emera, an impressive utility stock, have years of growth potential ahead of them.
As the largest green energy stock in Canada, Brookfield’s global portfolio of renewable energy assets should continue to see strong demand for its services. Plus, Brookfield is constantly looking for new investments to add to its portfolio and expand its earnings power.
Meanwhile, as a well-diversified utility stock offering electricity and gas utilities, Emera is not only one of the most defensive stocks on the market and an ideal dividend growth stock, but it has years of growth potential ahead of it as electricity demand continues to climb.
Both stocks are consistently increasing their dividends and both offer significant yields, with Brookfield’s current yield sitting at 5.7% while Emera’s current dividend yield is 5.8%.
A top residential real estate stock for passive income seekers
The real estate sector is another excellent industry where investors can find top dividend stocks to buy, and one of the best to consider today is Morguard North American Residential REIT ( TSX:MRG.UN ).
Morguard owns a diversified portfolio of rental properties in several states south of the border as well as parts of Canada. This diversification helps to not only mitigate against regional risks but also take advantage of opportunities for growth in different parts of the country.
As a residential REIT, demand typically remains strong no matter what the state of the economy, ensuring a consistent flow of cash to Morguard every month.
Furthermore, with interest rates now declining in Canada and soon to be reduced in the U.S., Morguard’s profitability has the potential to see a significant boost in the coming quarters.
Therefore, with a current yield of more than 4.3%, Morguard is undoubtedly one of the top dividend stocks to buy in August to help boost your passive income.
The post My Top 5 Dividend Stocks for Passive Income Investors to Buy in August appeared first on The Motley Fool Canada .
Fool contributor Daniel Da Costa has positions in Enbridge and Freehold Royalties. The Motley Fool recommends Brookfield Renewable Partners, Emera, Enbridge, Freehold Royalties, and Morguard North American Residential Real Estate Investment Trust. The Motley Fool has a disclosure policy .
2024