As the TSX-listed stocks continue to encounter volatility, it makes sense to invest in top dividend-paying companies and earn a steady income. Notably, the top dividend-paying companies continue to generate robust cash flows and have businesses that are mostly immune to short-term volatility. Here is the list of the five dividend stocks that could continue to boost their shareholders’ returns irrespective of the wild market swings.
TC Energy
TC Energy (TSX: TRP)(NYSE: TRP) offers a high yield of 5.9% and has increased its dividends by about 7% annually in the past 21 years. The company’s high-quality asset base backed by a regulated and contractual framework suggests that it could continue to generate robust cash flows, which is likely to drive its future dividend payments.
It projects a 5-7% increase in its dividends in the future, thanks to the strength in its base business and a multi-billion-dollar secured capital program. TC Energy’s high yield and resilient cash flows make it a top income stock.
Enbridge
Enbridge (TSX: ENB)(NYSE: ENB) is among the dividend stocks listed on the TSX. Its dividends have grown by about 10% annually since 1995, which reflects the strength of its cash flows. Besides, Enbridge has paid dividends for over 66 years, thanks to its high-diversified cash flow streams and continued momentum in the core business.
At current price levels, Enbridge stock is yielding over 7.2%, which is very safe. Meanwhile, its payout ratio is sustainable in the long run. With improving energy demand, contractual arrangements, a strong secured capital program, and cost reduction, Enbridge could continue to boost its shareholders’ returns through increased dividend payments.
Scotiabank
Scotiabank (TSX: BNS)(NYSE: BNS) is expected to enhance its shareholders’ returns through share buybacks and increased dividend payments. The bank is likely to benefit from the economic expansion and uptick in its loan portfolio. Further, lower credit provisions are likely to drive its high-quality earnings base and support dividend payouts.
Scotiabank offers a yield of 4.6% and has consistently increased its dividends over the past several years. I believe its exposure to the high growth markets, improving operating environment, and recovery in earnings are likely to drive its future dividends. Further, Scotiabank is looking attractive on the valuation front and is trading at a lower multiple than peers.
Fortis
Fortis (TSX: FTS)(NYSE: FTS) paid and raised its dividend for 47 years in a row, making it a must-have stock to generate steady income. Its regulated utility assets generate robust cash flows that support higher dividend payouts.
The company projects 6% annual growth in its dividends over the next five years, thanks to the continued increase in rate base. Fortis expects its rate base to increase by $10 billion in the next five years, which is likely to support its earnings and higher dividend payments. It offers a decent yield of over 3.7%.
Pembina Pipeline
Pembina Pipeline’s (TSX: PPL)(NYSE: PBA) highly contracted business and resilient fee-based cash flows suggest that the energy infrastructure company could continue to lift its future dividends and boost shareholders’ returns. Its stock is trading at a discount compared to peers, while it offers a high yield of 7.0%.
I believe the recovery in demand, higher volumes and pricing, and new projects are likely to drive Pembina’s cash flows in the coming years, in turn, push its dividends higher. Meanwhile, its low-risk business and sustainable payout ratio suggest that its dividends are safe.
