The lower interest rates and heightened volatility in the stock market make high-yield dividend-paying stocks an attractive investment for a steady income flow. So if you plan to invest $3,000 in equities, here are three dividend stocks offering safe and high yields. Further, these TSX-listed companies generate resilient cash flows, implying that investors could continue to benefit from higher dividend payments in the future.
Enbridge
Enbridge (TSX: ENB)(NYSE: ENB) pays an annual dividend of $3.34, representing a high yield of 7.2%. Notably, Enbridge has been paying dividends for a very long period and has consistently increased it in the last 26 years at an average annual growth rate of about 10%.
With a steady recovery in energy demand and its diversified asset mix, Enbridge is likely to deliver strong distributable cash flows or DCF, which could drive its future dividends. Notably, Enbridge expects its DCF per share to increase by 5-7% annually in the coming years, suggesting investors could expect the company to increase its future dividends at a similar pace.
Its $16 billion secured capital program, backed by the take or pay or cost of service arrangements, is expected to drive its EBITDA, in turn, its cash flows in the coming years. Meanwhile, continued momentum in its core business could continue to drive its earnings and dividends.
Pembina Pipeline
Pembina Pipeline (TSX: PPL)(NYSE: PBA) has paid dividends since 1997. Furthermore, its dividends have grown by about 4.9% in the past decade. Notably, its robust dividend payouts are backed by diversified and highly contracted assets that generate resilient cash flows.
With the recovery in energy demand, higher volumes, and increase in average realized prices, Pembina Pipeline could deliver strong EBITDA in the coming years. Meanwhile, its growing backlog, secured and deferred growth projects, and balanced commodity exposure to multiple commodities augur well for growth.
Pembina offers a high dividend yield of 6.9%, which is safe. Its integrated assets, continued investments, and strong balance sheet suggests that the company could continue to enhance its investors’ returns through higher dividend payments. Further, it trades at a lower valuation multiple than peers, providing a good entry point at the current levels.
TC Energy
TC Energy’s (TSX: TRP)(NYSE: TRP) has consistently delivered strong shareholders’ returns thanks to its low-risk and high-growth business model. Its high-quality regulated and contacted assets generate robust cash flows and helped the company to uninterruptedly increase its dividends by about 7% annually in the past 21 years.
TC Energy derives the majority of its adjusted EBITDA from the rate-regulated and contracted assets, implying that its future payouts are very safe. Further, its multi-billion-dollars secured capital program and solid developmental pipeline position it well to consistently increase its yearly dividends at a decent pace.
TC Energy’s annual dividend of $3.48 per share reflects a stellar yield of 5.9%. Meanwhile, the company projects a 5-7% hike in its yearly dividends in the coming years. The company’s growing asset base, higher utilization levels, high-quality counterparties, and sustainable dividend payout ratio make me bullish on TC Energy stock.
