4 High-Yielding Dividend Stocks to Buy Right Now

Given their high yields, these four Canadian stocks are excellent buys for income-seeking investors.

| More on:
Growing plant shoots on coins

Image source: Getty Images

Amid a low-interest-rate environment, the returns on debt instruments have become unattractive. Meanwhile, here are four dividend stocks you can buy to earn a stable income. Investors can also benefit from stock price appreciation.

Enbridge

Enbridge (TSX:ENB)(NYSE:ENB) is a Dividend Aristocrat, which has raised its dividends for the past 26 years at a CAGR of 10%. In December, the company’s board had increased its quarterly dividends by 3% to $0.835, with its forward dividend yield currently standing at 7.55%.

The company operates highly contracted and diversified businesses, which deliver stability to its earnings and cash flows. Further, the company is continuing with a $16 billion diversified secured capital programs supported by take-or-pay and cost-of-service agreements. These projects could contribute $2 billion to its EBITDA from 2023. The company’s financial position also looks healthy, with its liquidity standing at $13 billion as of December 31. So, given its high-growth prospects, stable cash flows, and healthy liquidity position, I believe Enbridge would be a good buy for income-seeking investors.

Pembina Pipeline

Supported by its highly contracted businesses, Pembina Pipeline (TSX:PPL)(NYSE:PBA) has raised or maintained its dividends for the previous 22 years. In 2020, the company earned around 94% of its adjusted EBITDA from fee-based or take-or-pay agreements, which provided stability to its financials. Meanwhile, the company has planned to make $785 million of capital investments in 2021. These investments, along with a recovery in oil demand, could drive its financials this year.

Meanwhile, Pembina Pipeline’s management expects its 2021 adjusted EBITDA to be in the range of $3.2-$3.4 billion. Further, it had liquidity of $3.2 billion at the close of the fourth quarter. So, I believe the company’s dividends are safe. The company currently pays monthly dividends of $0.21 per share, representing a forward dividend yield of 7.7%.

BCE

One of the three largest telecommunication operators in Canada, BCE (TSX:BCE)(NYSE:BCE) has a long history of paying dividends. It has been raising its dividends by over 5% every year for the last 12 years. Last month, it increased its quarterly dividends by 5.1% to $0.875 per share, representing a forward dividend yield of 6.3%.

Despite the pandemic, BCE added 147,000 new customers in the recently announced fourth quarter. As of December 31, the company had six million direct fibre and rural wireless home internet connections. Meanwhile, the company’s management expects to add 900,000 more direct fibre and rural wireless home internet customers this year while doubling its 5G population coverage. To achieve this target, the management has planned to invest $1-$1.2 billion over the next two years. So, the company’s growth prospects look healthy.

Keyera

Supported by its strong fundamentals, Keyera (TSX:KEY) has raised its dividends at a CAGR of 7% since 2008. During the period, the company’s DCF per share has grown at a CAGR of 9%. Currently, the company pays monthly dividends of $0.16 per share, representing a forward dividend yield of 7.75%. Its payout ratio was at 59%. With the company targeting a payout ratio of 50%-70%, the company still has room to raise its dividends.

Keyera earns 70% of its cash flows from fee-for-service contracts, which provides stability to its financials. The company is planning to make a capital expenditure of $400-$450 million in 2021. The company has also taken initiatives to lower its SG&A expenses and optimize its operation, which could expand its margins in the coming quarters. So, the recovery in oil demand, capital investments, and falling expenses could drive Keyera’s earnings in 2021.

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 KEYERA CORP and PEMBINA PIPELINE CORPORATION. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.

More on Dividend Stocks

edit Sale sign, value, discount
Dividend Stocks

3 Top Dividend Stocks That You Can Buy Under $50

The global equity markets have turned volatile over the last few weeks amid the fear that the U.S. Federal Reserve …

Read more »

ETF chart stocks
Dividend Stocks

3 TSX ETFs to Buy for Big Dividends

Dividend-paying exchange-traded funds (ETFs) are excellent investment options for passive investors. Apart from instant diversification, would-be investors earn in two …

Read more »

grow dividends
Dividend Stocks

3 of the Best Dividend Growth Stocks That Money Can Buy

Long-term investing has several advantages, which is why so many well-known investors like Warren Buffett recommend it as a strategy. …

Read more »

investment research
Dividend Stocks

3 Cheap Canadian Stocks to Buy Now Before the Dividend Deadline!

Motley Fool investors have been searching high and low for safe stocks in this volatile market. The TSX today doesn’t …

Read more »

Glass piggy bank
Dividend Stocks

How to Accelerate Your TFSA Returns From Dividend Stocks

The stock market saw a correction in January, as investors booked profits ahead of the central bank’s interest rate hikes. The TSX …

Read more »

money cash dividends
Dividend Stocks

Top 3 Dividend Stocks in Canada for 2022

Canada is home to some of the best dividend stocks in the world. With finance, telecoms, and energy dominating the …

Read more »

calculate and analyze stock
Dividend Stocks

2 Top TSX Stocks to Put on Your TFSA Buy List

TFSA investors are searching for undervalued TSX stocks to buy that have the potential to deliver big gains in 2022. …

Read more »

Payday ringed on a calendar
Dividend Stocks

Get Unbelievable Monthly Income With High-Yield Dividend Stocks

The only thing better than a dividend stock is a stock that pays dividends every month. For people who live …

Read more »