2 TSX Dividend Aristocrats Yielding Up to 7.9%

Enbridge (TSX) and Canadian Utilities (TSX:CU) are two dividend-paying giants for the income investor.

| More on:

There are two weeks before the end of the first half of, perhaps, the most hated year of this century. A lot of commentary on the stock market right now is that the markets are dissociating themselves from the real world. If that really is the case, investors need to brace themselves for another drop.

Here we look at two dividend giants on the TSX with predictable revenues and a history of solid dividend payouts that will help investors weather the upcoming storm. If the naysayers are wrong and there is no drop, you can expect these company shares to rise in tandem with broader markets as well. It’s a win-win either way.

A dividend-paying energy giant

Enbridge (TSX:ENB)(NYSE:ENB) is the largest energy infrastructure company in North America. Enbridge stock is trading at 26% off its 52-week high right now. The company has been paying out uninterrupted dividends for the last 69 years and has increased dividends consistently in the last 25 years.

It is one of the few companies that increased its dividend this year despite the pandemic. Currently, its forward dividend yield is at 7.82%. Enbridge has delivered an 11% CAGR dividend growth from 1995-2020. The reason it can do this is because it gets 98% of its revenues from regulated businesses, and 93% of its clientele are investment-grade companies.

Enbridge has mapped out a growth plan post-2020 and it looks very impressive. The company estimates a $1 billion annual opportunity in its utilities segment, $1 billion in its renewables segment, $2 billion in gas transmission, and $2 billion in its liquids pipelines. While these might seem ambitious, if any company can pull it off, it is Enbridge.

The next six months are a great opportunity to accumulate shares of this stock. As the world returns to normalcy in 2021, Enbridge will be very well positioned to capitalize on increased demand for energy.

A recession-proof Canadian heavyweight

Canadian Utilities (TSX:CU) is another Canadian company that has been paying out dividends for a long time. In fact, CU holds the record among publicly traded companies for dividend increases. It has increased its dividend payout every year for the last 48 years. At $1.74, its forward dividend yield is a strong 5.74%.

Around 95% of CU’s revenues are regulated and the balance is accounted for from long-term contracts. While the company is a good dividend payer, the same can’t be said about its initiatives to grow until recently. CU has been comfortable in its sector for too long. That said, it has started making moves to evolve in the last decade.

CU sold off its Canadian fossil fuel-based electricity generation portfolio in the third quarter of 2019 to focus on regulated and cleaner sources of energy. It is expanding into new lines of business and is putting pressure on processes that will increase cost-savings.

However, it will be some time before these CU measures bear fruit. It’s a great stock for investors who want a stable dividend payout every year. It’s not a great stock for investors who want to see massive appreciation in its stock price.

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.

The Motley Fool owns shares of and recommends Enbridge. Fool contributor Aditya Raghunath has no position in any of the stocks mentioned.

More on Dividend Stocks

money goes up and down in balance
Dividend Stocks

This 6% Dividend Stock Is My Top Pick for Immediate Income

This Canadian stock has resilient business model, solid dividend payment and growth history, and a well-protected yield of over 6%.

Read more »

ways to boost income
Dividend Stocks

1 Excellent TSX Dividend Stock, Down 25%, to Buy and Hold for the Long Term

Down 25% from all-time highs, Tourmaline Oil is a TSX dividend stock that offers you a tasty yield of 5%…

Read more »

Start line on the highway
Dividend Stocks

1 Incredibly Cheap Canadian Dividend-Growth Stock to Buy Now and Hold for Decades

CN Rail (TSX:CNR) stock is incredibly cheap, but should investors join insiders by buying the dip?

Read more »

bulb idea thinking
Dividend Stocks

Down 13%, This Magnificent Dividend Stock Is a Screaming Buy

Sometimes, a moderately discounted, safe dividend stock is better than heavily discounted stock, offering an unsustainably high yield.

Read more »

Canadian Dollars bills
Dividend Stocks

Invest $15,000 in This Dividend Stock, Create $5,710.08 in Passive Income

This dividend stock is the perfect option if you're an investor looking for growth, as well as passive income through…

Read more »

A Canada Pension Plan Statement of Contributions with a 100 dollar banknote and dollar coins.
Dividend Stocks

3 Compelling Reasons to Delay Taking CPP Benefits Until Age 70

You don't need to take CPP early if you are receiving large dividend payments from Fortis Inc (TSX:FTS) stock.

Read more »

A worker overlooks an oil refinery plant.
Dividend Stocks

Better Dividend Stock: TC Energy vs. Enbridge

TC Energy and Enbridge have enjoyed big rallies in 2024. Is one stock still cheap?

Read more »

Concept of multiple streams of income
Dividend Stocks

Got $10,000? Buy This Dividend Stock for $4,992.40 in Total Passive Income

Want almost $5,000 in annual passive income? Then you need a company bound for even more growth, with a dividend…

Read more »