2 Of the Safest High-Yield Dividend Stocks in Canada

2 of the Safest High-Yield Dividend Stocks in Canada

Consider investing in these two dividend stocks during this volatile market environment to enjoy reliable shareholder returns.

Adam Othman

Adam is a value investor who is always on the hunt for fantastic undervalued companies that he can share with Motley Fool readers. He follows Warren Buffett and Charlie Munger's investment advice and has completed the Canadian Securities Course. When he's not investing, Adam can usually be found traveling or skiing.

Published January 24, 2022 4:45 pm EST

The stock market had a terrific year in 2021 as the S&P/TSX Composite Index rose to new all-time highs despite the uncertainty in the market. However, the surge in COVID-19 cases toward the end of the year combined with rising inflation rates and fears of interest rate hikes to set off significant volatility.

The volatility has seeped into 2022. Investors who want to strengthen their portfolios to generate more reliable returns might want to consider investing in income-generating assets that can provide them with reliable shareholder returns.

Today, I will discuss two of the safest high-yielding dividend stocks that you could consider adding to your portfolio for this purpose.

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Algonquin Power & Utilities

Algonquin Power & Utilities Corp. (TSX: AQN)(NYSE: AQN) is one of my top picks for high-yielding dividend stocks that offer reliable shareholder dividends. Algonquin is an $11.93 billion market capitalization renewable energy and regulated utility conglomerate with assets throughout North America. The company’s low-risk utility and regulated renewable energy facilities generate fairly predictable and robust cash flows.

Stable cash flows allow Algonquin to increase its shareholder dividends and easily sustain its juicy payouts. At writing, Algonquin Power & Utilities stock is trading for $17.75 per share, and it boasts a juicy 4.90% dividend yield that you can lock into your portfolio today.

Enbridge

Enbridge Inc. (TSX: ENB)(NYSE: ENB) has been one of my favorite Canadian Dividend Aristocrats for a long time. Enbridge is a $105.93 billion market capitalization energy infrastructure company. It is responsible for transporting a significant portion of all the traditional energy sources used in North America, playing a crucial role in the economy.

The company managed to continue its dividend hikes during the worst period of the pandemic, unlike most of its energy sector peers.

2021 was a fantastic year for the energy sector amid the surging demand for travel. The company put its higher profit margins to work, placing around $10 billion worth of projects into service, further boosting its cash flows. The company plans to continue investing around $3-$4 billion in the next three years to expand its utility and low-capital-intensive assets.

At writing, Enbridge stock is trading for $52.28 per share, and it boasts a juicy 6.58% dividend yield.

Foolish takeaway

Dividend stocks become more important during volatile operating environments than growth stocks due to the stability and reliability they introduce to your portfolio. While dividend stocks are not impervious to upticks and downturns on the stock market, these income-generating assets can provide you with shareholder dividends that can reduce the volatility of your total returns.

Algonquin Power stock and Enbridge stock are two reliable and high-yielding dividend stocks that can offer you stable returns during volatile markets through dividend payouts. Additionally, these assets can help you grow your wealth through capital gains during better market conditions.