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 (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 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.