Dividend Investing: 2 Hot Stocks With Big Yields

As the stock market remains unsettled, long-term buying opportunities are present. Find out which two dividend investing stars might be worth a look.

| More on:
Profit dial turned up to maximum

Image source: Getty Images

With stocks continuing to bounce around, long-term investing opportunities are abundant. In particular, some dividend investing stocks are offering eye-popping yields to investors.

Now, of course, the dividend yield is certainly not the only metric to consider when looking at long-term investing options. It’s important to also consider the underlying health of the company at hand. Sometimes a wildly large yield signals a sinking company that’s desperately trying to attract investors.

So, it’s vital to be able to discern between good value and a value trap. Today, we’ll look at two TSX dividend investing stocks that are offering large yields and that might have the resiliency needed during these times.

Enbridge

Enbridge (TSX:ENB)(NYSE:ENB) is a massive multinational energy distribution and transportation company. It’s long been a dividend investing favourite with its great track record for superb dividend growth and stability.

Now, there’s no question Enbridge has been hit hard by the tightening economy and specifically drastically lower oil prices. While not a direct producer of oil itself, the company does transport it. If producers can’t afford to produce oil at certain prices, there’s simply less product for Enbridge to distribute.

This struggle has been highlighted in the dividend investing stock’s recent performance. In its most recent earnings announcement, Enbridge reported year-over-year quarterly revenue growth of -6.6%. In addition, shares of Enbridge are down 14.11% over the past 52 weeks.

Of course, the drop in share price for Enbridge has meant a higher yield is now on offer. As of this writing, Enbridge is trading at $41.41 and yielding 7.82%.

For long-term investors, that figure is mouth-watering. However, it’s accompanied by a payout ratio of over 300%. That certainly doesn’t paint a great picture in terms of the yield’s sustainability.

Despite concerns in the short term, Enbridge has long been a resilient blue-chip, dividend investing star. Its great track record should instil some confidence with investors, but there’s no doubt there’s some risk at play here. Perhaps it would be prudent for investors to bake in an expectation of some sort of slight dividend cut in the short term, even if it’s only temporary.

Even with an assumed cut, the reward on the table here might still be worth it for some more risk-tolerant investors.

Brookfield Renewable

Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) owns various renewable power assets around the world. If you’re thinking the future of energy is in renewable power, BEP will be right up your alley.

This dividend investing star owns and operates some of the largest renewable power facilities around the globe, and it continues to expand frequently. Its portfolio of power assets combines to form over 19,000 megawatts of total capacity.

The company also deals largely in long-term contracts for its power generation, meaning that its revenue streams are well defined and predictable.

Plus, as the global economy shifts towards more renewable energy options, BEP stands to capitalize, as it already has world-class infrastructure in place.

As of this writing, this dividend investing option is trading at $66.10 and yielding 4.52%. For investors focused on a very long-term horizon, this stock offers both tremendous growth potential as well as a very attractive yield.

Dividend investing strategy

Both of these stocks are solid dividend investing picks. Enbridge does seem to have a few tough challenges in the short term, but the reward is certainly there for willing investors.

If you’re looking to add to a dividend investing plan, be sure to give these TSX energy stars strong consideration.

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 Jared Seguin owns shares of Brookfield Renewable Partners. The Motley Fool owns shares of and recommends Enbridge.

More on Dividend Stocks

thinking
Dividend Stocks

Should You Buy BCE Stock for its 8.6% Dividend Yield?

Down over 20% from all-time highs, BCE stock offers you a tasty dividend yield in 2024. But is the TSX…

Read more »

grow dividends
Dividend Stocks

How Long Would It Take to Turn $20,000 Into $100,000 With TSX Dividend Stocks?

Here's how high-quality TSX dividend stocks and the power of compound interest can help grow your investments by 400% or…

Read more »

Paper airplanes flying on blue sky with form of growing graph
Dividend Stocks

2 Soaring Stocks I’d Buy Now With No Hesitation

These two stocks may be the most expensive on the market, but they're high for a reason! And I'm still…

Read more »

Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline
Dividend Stocks

Invest $374.50 Each Month to Create Passive Income of $288 in 2024

Investing a specific amount each month to create passive income this year is possible with monthly dividend payers.

Read more »

Happy retirement
Dividend Stocks

2 Stocks to Help Turn $100,000 Into $1 Million

If you want to reach $1 million, $100,000 can certainly get you there. Even if you invest in some low…

Read more »

warning or alert
Dividend Stocks

Income Alert: These Stocks Just Raised Their Dividends

There's no shortage of companies that raised their dividends recently. Here's a trio of options to consider buying now.

Read more »

Business success with growing, rising charts and businessman in background
Dividend Stocks

Don’t Look Now, But These 3 TSX Stocks Look Poised for a Nice Rally 

Three TSX stocks are in a downtrend amid headwinds. 2024 may be rocky for them, but they are poised for…

Read more »

protect, safe, trust
Dividend Stocks

3 Safe Dividend Stocks to Beat Inflation

These three dividend stocks are excellent buys to beat inflation, given their solid underlying businesses and high yields.

Read more »