Do you want predictable and reliable income? Do you want a worry-free investment that will allow you to fall blissfully into bed every night knowing that your financial future is being taken care of?
Pipeline and utility stocks are known for their steady and reliable performance, both in terms of financial performance and stock price performance. They are also known for their reliable dividend payments that investors can count on throughout the cycles.
Although in recent months pipeline and utility stocks have been more volatile than historically, with greater uncertainties and risks, the fact is that in the long term, the investment thesis remains strong.
Without further ado, let’s look at two top dividend stocks that are rallying big in 2019, and that can be expected to continue to provide investors with reliable dividend income as well as capital gains.
TC Pipelines (TSX:TRP)(NYSE:TRP)
TC Pipelines stock has rallied 25% year to date, as the stock shakes off last year’s weakness and rises to new 52-week highs. And with a current dividend yield of 5%, it’s hard to find a safer income stream at these levels than this.
For more than 65 years, TC Pipelines has been developing and maintaining energy infrastructure, while handsomely rewarding shareholders.
Since 2000, TC Pipelines stock has provided shareholders with a compound annual growth rate of 9% while delivering yearly dividend increases, which has brought the dividend per share from $0.80 to $3.
TC Pipelines has above-average, visible growth and an infrastructure presence that should ensure strong growth well into the future.
Investors can expect continued dividend growth of 8-10% through to 2021.
Canada’s energy transportation and distribution giant with oil and gas assets and operations in North America and renewable assets in North America and Europe provides investors with stability, predictability, and dividend income.
Since 1996, investors have enjoyed 22 years of dividend increases, with a 33% dividend increase in 2015, a 14% increase in 2016, a 15% increase in 2017, and a 10% increase in 2018.
Despite the setback related to Enbridge’s Line 3 replacement, which will result in a delay of up to a year, Enbridge stock has also rallied in 2019 to the tune of 16%.
And while this is Enbridge’s biggest project, it is by no means the only one. With a total of $16 billion worth of projects expected to come on stream in the next two years, Enbridge remains well set up for a continued stock price recovery.
Management expects the dividend to increase 10% next year and 5-7% thereafter.
Going forward, Enbridge will focus on being self-funded, funding its projects through the use of internally generated cash flow, thereby reducing the financial risk and eliminating the need to issue shares going forward.
When you buy heavily cyclical stocks at low prices… and then hold the shares until the cycle reaches its peak… you can make a very healthy profit.
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Fool contributor Karen Thomas owns shares of TC Pipelines. Enbridge is a recommendation of Stock Advisor Canada.