Amid uncertainty and a lower interest rate environment, it’s prudent to squeeze out steady and higher yields from the top dividend-paying stocks. Dividend-paying stocks are relatively stable and generate resilient cash flows that support future growth and payouts.
Here are five top Canadian dividend stocks that could continue to boost shareholders’ returns through higher dividend payments. Furthermore, these companies are offering solid annual yields.
Enbridge
Enbridge‘s (TSX: ENB)(NYSE: ENB) long history of dividend payments and high yield make it a top income stock. It has been paying dividends for over 66 years in a row. Also, it raised its dividends by about 10% annually in the last 26 years.
Enbridge’s solid dividend payments are backed by its diversified cash flow streams and contractual arrangements that drive its distributable cash flows. I believe the recovery in its mainline volumes, continued strength in its core business, and long-term contracts will continue to boost Enbridge’s cash flows and, in turn, its dividend payments. Meanwhile, its $16 billion secured capital program should further support its earnings and cash flows. Despite the near-term challenges, Enbridge remains well positioned to enhance its investors’ returns and offers a high yield of 7.2%.
Scotiabank
Scotiabank (TSX: BNS)(NYSE: BNS) is known for its robust dividend payments. It has been rewarding its shareholders with regular dividend payments since 1833. It has increased dividends at a CAGR of 6% since 2009. Scotiabank’s robust dividend payments are driven by its diversified revenue streams and consistent earnings growth.
Scotiabank is expected to deliver stellar earnings growth in the coming years, thanks to the economic expansion, an uptick in loans and deposit volumes, and lower provisions. Further, its exposure to the high-growth banking markets and expense management are likely to cushion its earnings and, in turn, its dividend payments. Currently, Scotiabank offers a decent annual dividend yield of 4.6%.
Canadian Utilities
Canadian Utilities (TSX: CU) has enhanced its shareholders’ returns through regular and higher dividend payments. Notably, the utility company has raised its dividends for 49 consecutive years, thanks to its high-quality earnings base.
Its predictable and growing cash flows suggest that its payouts are safe.
I believe Canadian Utilities’s continued investments in regulated and contracted assets are likely to drive its high-quality earnings base and, in turn, its future dividend payments. The company offers a high yield of 5.1% at current price levels.
TC Energy
TC Energy (TSX: TRP)(NYSE: TRP) has been paying and increasing its dividends for more than two decades. To be precise, TC Energy has grown its dividends at an average annual rate of 7% for 21 years in a row. Its regulated and contracted assets continue to generate resilient cash flows that support higher payments.
Thanks to its high-quality assets and secured capital program, TC Energy expects its dividends to increase by 5-7% in the future. I believe its low-risk business, growing asset base, multi-billion-dollar secured capital projects, and cost-reduction measures augur well for future earnings growth. Currently, the company offers a solid yield of 5.9%.
Fortis
Fortis (TSX: FTS)(NYSE: FTS) has raised its dividends for 47 consecutive years, and expects it to increase at a CAGR of 6% in the next five years. Fortis’s solid dividend payments are supported through its rate-regulated and diversified assets that generate robust cash flows.
I believe continued rate base growth is likely to drive Fortis’s future dividends. The company expects its rate base to increase at a CAGR of about 6% over the next five years and increase by $10 billion. Meanwhile, acquisition opportunities, diversification, and business reinvestments are likely to boost its future growth. It offers a decent annual yield of 3.7%.
