The Motley Fool

TSX Stocks: 3 High-Yield Heavyweights to Buy in July

Image source: Getty Images.

Dividend investing is a safe and rewarding long-term investment strategies. But chasing extremely high-yield stocks could be risky, so long-term dividend stability should be the criteria. I am covering three top TSX stocks today that offer safe and superior yields and are trading below their fair values.

Top-yielding TSX stocks: Canadian Natural Resources

Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ), the second-biggest energy company in Canada, is well placed to weather the uncertainties in energy markets. It is currently trading at a dividend yield of 7.3%, notably higher than TSX stocks at large.

Canadian Natural has increased dividends this year when many energy giants have trimmed or suspended shareholder payouts. In the last five years, the company has increased dividends by 11% compounded annually.

Canadian Natural has a diversified product base, which makes it relatively protected from volatile crude oil prices. Also, its strong balance sheet and operational efficiency will likely help it survive the crisis.

CNQ stock has doubled since its record lows in March. Despite the rally, the stock looks attractively valued at the moment. I think even if crude oil volatility continues for the next year or so, it won’t substantially hamper Canadian Natural’s dividends.

Power Corporation of Canada

The $16 billion Power Corporation of Canada (TSX:POW) is an international management and holding company with a focus on financial services and renewables.

Power Corporation of Canada is the parent company of Power Financial, which has subsidiaries such as Great-West LifecoIGM Financial, and Pargesa.

POW stock offers a juicy yield of 7.5%, and its five-year dividend-growth rate comes at 7%. Notably, the company’s top-line growth has slowed down, while the bottom line has shrunk in the last couple of years.

Power Corporation stock is still trading 30% lower to its pre-pandemic levels and looks fairly valued. Its safe dividend yield and attractive valuation make it a worthy bet for long-term investors.


Top midstream energy giant Enbridge (TSX:ENB)(NYSE:ENB) stock has been trading in a narrow range for the last few months. It has exhibited a relatively slower recovery post-COVID-19 crash compared to peer TSX energy stocks.

Enbridge yields 8% at the moment, much higher than its average historical yield. Its dividends increased by a handsome 16% compounded annually in the last five years. Interestingly, energy markets continue to look gloomy, but Enbridge’s dividends will likely remain strong for the future.

That’s mainly because of its minimal exposure to volatile crude oil prices. Enbridge is a pipeline and energy storage company. Thus, crude oil volatility will not have a significant impact on its cash flows. However, lower oil prices generally drive producers to cut their outputs, which could be detrimental for midstream companies like Enbridge.

Enbridge’s dividends look safe for the foreseeable future. Even though big oil companies have trimmed their production for 2020, Enbridge has maintained its dividends.

With a robust dividend yield, attractive valuation, and stable earnings prospects, ENB stock is nothing short of a steal for long-term investors.

Looking for some MORE interesting stocks?

The 10 Best Stocks to Buy This Month

Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.
Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.

Click Here to Learn More Today!

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

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.