2 TSX Dividend Stocks That Are Yielding More than Fortis (TSX:FTS)

These dividend stocks have a long track record of maintaining and increasing their dividends and are offering higher yields than Fortis.

Fortis (TSX: FTS)(NYSE: FTS) is a well-known dividend stock that has increased its dividends for 47 years in a row. Further, the utility giant projects continued growth in its rate base and expects its dividends to increase by 6% annually in the next five years. 

Its low-risk and diversified business and regulated assets generate resilient cash flows that drive its dividends and reduces downside risk. Fortis expects its rate base to increase by about $10 billion in the coming five years, which could drive its high-quality earnings base, in turn, its dividends. Meanwhile, investments in infrastructure and opportunistic acquisitions are likely to support its future growth. 

While Fortis is undeniably a solid dividend bet, its low yield of 3.7% fails to attract. So here we’ll focus on two top dividend stocks that have a long track record of maintaining and increasing their dividends and are offering higher yields than Fortis.

Enbridge

Speaking of higher yields, consider buying the shares of energy infrastructure giant Enbridge (TSX: ENB)(NYSE: ENB). Its dividend yield stands at 7.1% and is very safe, thanks to its highly diversified income streams and resilient cash flows. Further, it has a long track record of dividend payments (Enbridge has paid regular dividends for more than 66 years) and increased it by a compound annual growth rate (CAGR) of nearly 10% in the last 26 years. 

Despite the short-term volatility and uncertainty in the market, Enbridge remains well-positioned to uninterruptedly pay its regular quarterly dividends and increase it further at a decent pace. Notably, the company projects its distributable cash flow (DCF) per share to mark 5-7% growth annually in coming years, suggesting that its future dividends could increase at an almost similar rate. 

I believe the reopening of the economy, steady recovery in its mainline volumes, and continued momentum in its gas and renewable power business could significantly boost its earnings and cash flows. Furthermore, its diversified and multi-billion-dollars secured capital program is likely to drive its high-quality earnings base and drive future dividend payments. 

Pembina Pipeline

Similar to Enbridge, Pembina Pipeline (TSX: PPL)(NYSE: PBA) has also paid and increased its dividends for a very long period. The company has uninterruptedly paid dividends since 1997. In dollar terms, Pembina has nearly $9.5 billion in dividends since then. Furthermore, its dividends have grown by about 5% annually over the last decade. 

Pembina stock is offering a high yield of more than 6.7%. Meanwhile, its robust fee-based cash flows and sustainable payout ratio suggest that investors can rely on its dividends and its high yield is safe. Notably, Pembina’s business is highly contracted and has a cost-of-service and take-or-pay framework. Furthermore, Pembina has strong investment-grade secured counterparties.

I believe its exposure to multiple commodities, ability to generate robust fee-based cash flows, and recovery in energy demand position it well to deliver solid earnings and cash flows.

Moreover, the backlog of growth projects, operating leverage, and newly secured projects are likely to boost Pembina’s growth prospects and support the upside in its stock. Pembina is also trading cheaper than its peers and looks attractive at current price levels. 

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends FORTIS INC and PEMBINA PIPELINE CORPORATION.

More on Dividend Stocks

Canadian Dollars bills
Dividend Stocks

Want Monthly Cash Flow? This 10.6% Dividend Stock Delivers

A 10.6% yield and monthly distributions sound appealing, but investors should understand how HDIF generates that income before buying.

Read more »

Canada day banner background design of flag
Dividend Stocks

Carney Wants $1 Trillion Invested in Canada: This TSX Stock Could Benefit

Carney’s $1 trillion investment push is huge, and AtkinsRéalis could be paid to design and manage the projects that make…

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

Why I’m Using These 5 Canadian Stocks as My TFSA Cornerstones

The following five Canadian stocks offer investors' strong dividend income and capital gain potential, an ideal mix for one's TFSA.

Read more »

Canadian dollars in a magnifying glass
Dividend Stocks

The Best Canadian Dividend Stocks if You Want Reliable Passive Income

These companies have increased their dividends annually for decades.

Read more »

woman gazes forward out window to future
Dividend Stocks

Your Future Self Is Counting On You to Buy This Canadian Dividend Stock Today

Explore the current trends in dividend stocks and understand the implications of dividend normalization on your investments.

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

Why Fortis Stock Can Handle Any Market – Here’s My Take

Fortis is a top Canadian utility stock with a massive dividend growth record. Here's why its a great dividend stock…

Read more »

A modern office building detail
Dividend Stocks

A 12% Yield Sounds Too Good: This is One to Avoid

A 12% yield can be a warning sign, not an opportunity. Here's why Timbercreek Financial's payout looks far riskier than…

Read more »

Couple working on laptops at home and fist bumping
Dividend Stocks

The Dividend Stock That Turns “Someday” Into An Actual Plan

Instead of planning for retirement "someday", turn it into an actual plan starting with this dividend stock today.

Read more »