Despite the resurgent virus in the background, the ongoing economic expansion suggests that corporate earnings could continue to recover in 2022. It means that Canadian companies could continue to boost shareholders’ returns through increased dividends and share repurchases.
So, if you are seeking high and reliable yields, here are four big dividend-paying stocks worth investing in.
Enbridge
When it comes to investing in a high-quality dividend stock, Enbridge (TSX: ENB)(NYSE: ENB) emerges as a natural choice. Despite all the volatility in the market, Enbridge has consistently paid and raised its dividends. This energy infrastructure company has been paying dividends for about 67 years. Furthermore, it has announced annual dividend increases for 27 years in a row.
Enbridge yields around 6.7% at current price levels, while its target payout ratio of 60-70% of DCF (distributable cash flows) is sustainable in the long run.
It’s worth noting that its diversified cash flow streams, strong secured projects, strength in the core business, and contractual arrangements will likely drive its DCF per share and, in turn, its dividends. Moreover, revenue escalators, higher utilization rate, strategic acquisitions, and opportunities in the renewable segment augur well for future growth.
Pembina Pipeline
Pembina Pipeline (TSX: PPL)(NYSE: PBA) is another stock in the energy sector offering a solid dividend. It has returned over $10.5 billion in the form of dividends since it started paying dividends in 1997. Further, it provides monthly payouts and is yielding over 6.4%.
Pembina’s highly contracted and diversified integrated energy infrastructure assets generate a substantial amount of fee-based cash flows that cover its dividend payments. Moreover, improving energy demand, higher commodity prices, and growth projects will drive its future earnings.
Besides offering a high yield, Pembina stock is trading at a discount compared to its peers. Moreover, its EV/EBITDA multiple is lower than the pre-pandemic levels.
Canadian Utilities
Thanks to its low-risk business and predictable cash flows, Canadian Utilities (TSX: CU) is among the most reliable stocks to generate a growing dividend income stream. Canadian Utilities has announced annual dividend increases for 49 years in a row, the highest by any Canadian public company.
Moreover, it could continue to increase its future dividends at a decent pace on the back of its high-quality earnings. Notably, Canadian Utilities generates its earnings from the regulated and contracted assets that remain immune to economic cycles.
Looking ahead, its continued investments in regulated and contracted assets will drive its high-quality earnings base. Meanwhile, cost-saving initiatives augur well for future growth. It offers quarterly payouts and is yielding about 5%.
NorthWest Healthcare
With a high dividend yield of 5.9%, NorthWest Healthcare Properties REIT (TSX:NWH.UN) is another top investment to earn solid dividend income. The company’s portfolio consists of defensive healthcare assets that generate strong cash.
Its occupancy rate remains high. Meanwhile, its tenants are backed by governments. Also, its long lease expiry term and inflation-indexed rents support my bullish outlook. Further, its focus on expanding into high-growth markets through acquisitions and balance sheet optimization initiatives suggests that NorthWest Healthcare could continue to return a substantial amount of capital to its shareholders.
