Amid the expectation of demand recovery, improving corporate earnings, and economic expansions, Canadian equity markets are trading close to their all-time highs. However, rising inflation and volatility in the cryptocurrency markets are a cause of concern. So, investors can strengthen their portfolios by investing in the following four safe dividend stocks that offer high yields. Apart from paying regular payouts, these stocks are less susceptible to market volatilities, given their steady cash flows and strong balance sheet.
Enbridge
Enbridge (TSX:ENB)(NYSE:ENB) is a Dividend Aristocrat which has increased its dividends for the previous 26 straight years at a compound annual growth rate (CAGR) of over 10%. Currently, the company pays quarterly dividends of $0.835 per share, representing a forward dividend yield of 7.2%. Amid the gradual reopening of the economies globally, oil demand could rise in the coming quarters, improving the asset utilization rate of Enbridge.
Further, the company is progressing with its $17 billion secured growth projects, which could become operational over the next two years. Along with these investments, the recovery in oil demand and its highly contracted businesses could drive its financials, allowing the company to continue its dividend growth. Besides, its financial position looks healthy, with its liquidity standing at $8.3 billion at the end of the March-ending quarter.
Pembina Pipeline
Pembina Pipeline (TSX:PPL)(NYSE:PBA) has paid dividends regularly since 1997 while raising the same at an annualized growth rate of 4.9% over the last 10 years. Despite the impact of the pandemic, the company continued to pay its dividends in the previous year, which is encouraging. Currently, its forward dividend yield stands at a healthy 6.45%.
The company earns over 90% of its adjusted EBITDA from fee-based or take-or-pay contracts, providing stability to its earnings and free cash flows. Further, Pembina Pipeline’s management has planned to make a capital investment of $785 million this year, which could boost its financials. The management expects to generate an adjusted EBITDA of $3.2-$3.4 billion this year. So, given its stable cash flows, healthy growth prospects, and high yield, Pembina Pipeline could be an excellent buy for income-seeking investors.
NorthWest Healthcare
NorthWest Healthcare (TSX:NWH.UN) is another Canadian company that delivers stable monthly dividends at a healthier dividend yield of 6.2%. It acquires and manages healthcare properties across seven countries. Given its highly defensive and diversified portfolio, the company enjoys higher occupancy and collection rate. Further, its long-term contracts, government-backed clients, and inflation-indexed rent could continue to boost its financials in the coming quarters.
Besides, NorthWest Healthcare is also looking at expanding its footprint in Australia, the United States, and Western Europe. Today, it announced a proposal to acquire Australian Unity Healthcare Property Trust for $2.6 billion. Further, the company is strengthening its financial position by deleveraging and disposing of its stake in the U.K. joint venture. Given its steady cash flows and healthy balance sheet, I believe the company’s dividends are safe.
BCE
My final pick would be BCE (TSX:BCE)(NYSE:BCE), which has a strong history of paying dividends. Currently, the company pays quarterly dividends of $0.875, representing a forward dividend yield of 5.83%. Its stable cash flows, solid liquidity position, and healthy growth prospects make BCE’s dividends safe. Despite the disruptions caused by the pandemic, the company generated $940 million of free cash flow during the first quarter, while its liquidity stood at $6.5 billion as of March 31.
Meanwhile, the demand for telecommunication services has been rising due to increased remote working and digitization of businesses. Amid the favorable industry trend, BCE has invested around $1 billion to expand its broadband network and 5G coverage. Along with these investments, the recovery in economic activities could boost the company’s financials in the coming quarters.
