If you’re looking for high dividends, now is a great time to be investing on the TSX. After five years of lacklustre gains, the TSX now sports one of the highest average yields of all North American stock exchanges, and while this year’s bull market has increased prices somewhat, dividend hikes have kept yields high. As a result, iShares S&P/TSX 60 ETF has a 2.74% yield — a fairly high yield for a stock, but absolutely stratospheric for an ETF that covers 74% of an entire country’s equity markets.
With that said, it’s possible to get much higher yields with stocks than with ETFs. Right now, the TSX abounds with stocks yielding north of 4%, with some particular standouts over 6%. When you can get yields like that, capital gains are almost an afterthought. So, without further ado, here are three TSX dividend stocks with yields over 4%.
TransAlta Renewables (TSX: RNW)
TransAlta is an energy company that sells power from renewable sources like wind, hydro, and solar. The company has dozens of facilities operating in Canada and Australia; the majority of them are wind and hydro generators. Solar energy is a comparatively small part of TransAlta’s business.
In 2018, TransAlta reported $0.92 in earnings per share, up from $0.04 in 2017 and a loss in 2016. Owing to its strong earnings growth, the company is able to pay a generous dividend, which yields 6.7% as of this writing.
Bank of Nova Scotia (TSX: BNS)(NYSE: BNS)
Scotiabank is one of Canada’s oldest and most respected banks. As part of the Big Six, it enjoys a solid competitive position domestically and in several foreign markets. Unlike other Canadian banks, whose international operations focus on the U.S., Scotiabank is mainly focused on Latin America, Europe, and Asia. By investing in Scotiabank, you get exposure to some foreign markets that other Canadian banks don’t have. Thanks to its steady and dependable earnings, this stock pays a dividend that yields 4.7% at present.
Enbridge (TSX: ENB)(NYSE: ENB)
Enbridge is one of Canada’s biggest pipeline companies. It operates a number of major transportation systems that send oil around Canada and to the U.S.
Enbridge has delivered superior returns to its investors over the years, rising 490% since the year 2000. Over a five-year time frame, the stock hasn’t done as well, as it took a hit when oil prices started tanking in 2014. This had the effect of making the stock cheap, and when oil prices recovered this year, the stock went through the roof. Enbridge is no longer the bargain it once was, but it still has a high dividend yield of around 5.8% based on current prices. If you want to get in on this one, make sure you act soon, because a rapidly rising stock price can easily trim a dividend in short order.
