Oil and energy have always been two of the highest-paying sectors. Even when the momentum has shifted a bit for petroleum, the energy business is still going strong. Also, oil is not a wholly tapped-out sector yet. If an investor like you is interested in high-yield dividend stocks, Pembina Pipeline (TSX:PPL)(NYSE:PBA), TC Energy, and Emera deserve a long, hard look.
Before we take a look at the three companies, another company that bears mentioning is Enbridge. With a dividend yield of 6.17%, it stands higher up on the list than the three companies below. However, all the companies have their own merits and numbers that they stand solidly on.
With a juicy yield of 5.16%, Pembina is my top pick. The company has increased its dividend payouts for eight consecutive years. The company is profitable, with a decent profit margin of 22.25% and an operating margin of 22.75. A decent return on equity of 11.68% is also a bit above the industry average.
From the previous year, the company increased its revenue generation by 3.73% and the net income by 169.92%. The company also looks stable, with a beta of 1.23.
At the time of writing, the company is trading at a monthly low of $46.40 per share, which makes it an excellent time to consider buying this stock. This market value has grown by about 6% from the same time this year. So, in choosing this stock, you may rest easy knowing that your capital gains may also be increasing along with your dividends.
One of the most significant players in the game, with a market cap of $62.42 billion, TC Energy is also a Dividend Aristocrat. The company has been increasing dividend payouts for 15 consecutive years. The current dividend yield is 4.46%.
The company is currently trading at $67.19 per share, which is more than 34% more than the price at this time last year. The market value of the company has also grown by about 20% in the past five years. The company is highly profitable at nearly 31% and an operating margin of 44.31%.
TC Energy has an extensive network of pipelines, spread out about 92,600 kilometres for natural gas, and 4,900 kilometres for oil and liquids. The bulk of the company’s operation is in Canada and the U.S., but the network is extending into Mexico as well.
With a market cap of only $13.36 billion, Emera is an underdog on this list. But the company is another dividend royalty, with 12 years of increasing dividends under its belt. The current yield is also a decent 4.41%.
The current market value of the company is $55.53 per share. Among the three, Emera has shown the most explosive growth in the past five years, with the company’s market value increasing by about 46%. The company is in the safe business electricity generation, gas generation/transmission, and utility energy services. With a diversified portfolio, Emera looks good for the future.
The energy sector is still going on strong. Investing in any of the three companies on our list can help you generate a passive income, or help you build your nest egg with a TFSA. Either way, if you are planning to go for a dividend aristocrat, you might want to check out Pembina, TC Energy, and Emera.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends PEMBINA PIPELINE CORPORATION.