Investing in high-yielding dividends stocks would be the cheapest and convenient way to earn a passive income due to its low transaction cost and high liquid nature. Also, dividend stocks strengthen your portfolio, as they tend to outperform the markets during an economic downturn. So, if you intend to invest in dividend stocks, here are the three top TSX stocks you can buy right now.
Enbridge (TSX:ENB)(NYSE:ENB), the energy infrastructure company, has been supporting its shareholders by paying dividends for 66 consecutive years. It has also increased its dividends for the last 26 straight years at an annualized growth rate of 10%. Last month, the company’s management had announced to raise its 2021 dividends by 3% to $3.34 per share, representing an attractive dividend yield of 7.6%.
Enbridge’s cash flows are mostly stable and predictable, with around 98% of its adjusted EBITDA generated from long-term contracts with credit-worthy counterparties. Further, the company has planned to invest $16 billion in a secured growth capital program, which could increase its adjusted EBITDA by $2 billion from 2023. Further, the company could also benefit from the widespread distribution of vaccines, as it could drive economic activities leading to increased oil demand.
Given its predictable cash flows, healthy growth prospects, and strong liquidity position of $14 billion, Enbridge’s dividends are safe. So, I believe Enbridge would an excellent buy for income-seeking investors.
NorthWest Healthcare Properties REIT
With the global healthcare market projected to grow at a healthier rate over the next couple of years amid the increasing middle class and aging population, I have chosen NorthWest Healthcare Properties REIT (TSX:NWH.UN), which invests in defensive healthcare real estate, as my second pick.
The company’s occupancy stands at a healthier rate of 97.2%, with the weighted average lease expiry standing 14.5 years. Its collection rate also remains strong, with the company collecting or formally deferring 97.6% of its revenue. Meanwhile, the company’s collection improved to 98.1% in October. Further, 73% of its revenue is inflation index, while 80% of its customers receive public healthcare funding, which is encouraging.
Along with its acquisition in Europe and Australia last year, NorthWest Healthcare has $384 million worth of high-quality projects in the pipeline. So, given its defensive investments and high growth prospects, I believe the company’s dividends are safe. The company currently pays monthly dividends of $0.067 per share, representing a healthy dividend yield of 6.1%.
I have chosen BCE (TSX:BCE)(NYSE:BCE), one of the largest telecommunication operators in Canada, as my third pick. It has been consistently paying dividends since going public in 1983. Thanks to its strong underlying business, it has raised its dividends for the past 11 consecutive years at an annualized growth rate of 5%. The company currently pays quarterly dividends of $0.8325, representing an annualized payout of $3.33 per share and a dividend yield of 6%.
Despite the pandemic’s impact, the company added over 200,000 new connections across its wireline and wireless segments in its September-ending quarter. It also generated $1.03 billion of free cash flows during the quarter, despite the decline in roaming revenue due to pandemic-infused restrictions.
Meanwhile, the widespread distribution of vaccines could prompt the government to lift travel restrictions, thus boosting BCE’s roaming revenue. It is also expanding its 5G network and advanced broadband internet services across Canada’s rural and urban parts, which could drive its financials in the coming years. The company’s financial position also looks healthy, with its liquidity standing at $5.2 billion at the end of the third quarter. So, given its recession-proof business model, stable cash flows, and healthy liquidity, I believe BCE’s dividends are safe.
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. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.