Dividend Investors: 2 High-Yield Stocks for Reliable Passive Income

These top high-yield dividend stocks deserve to be on your radar for steady passive income.

| More on:
money cash dividends

Image source: Getty Images

Pensioners and other income investors are searching for top dividend stocks with high yields that can help protect against rising inflation.

TC Energy

TC Energy (TSX:TRP)(NYSE:TRP) raised its dividend in each of the past 22 years. At the time of writing, the stock provides an attractive 5% dividend yield.

The energy infrastructure giant is positioned to benefit from the surge in global demand for natural gas. Countries around the globe are turning to natural gas to replace coal and oil to generate electricity while they ramp up investments in renewable power. Even when solar, wind, and hydroelectric facilities are in place there still needs to be reliable power production that can offset demand surges and provide supply during times when weather conditions inhibit renewable power generation.

The U.S. just announced a deal to provide Europe with more liquified natural gas (LNG), as the continent looks to reduce its reliance on Russia. This will drive new demand for gas produced in the U.S. and Canada and TC Energy has the infrastructure in place or under construction to get the natural gas from the producers to the LNG facilities.

TC Energy also has oil pipelines and power production facilities to balance out the revenue stream. The board raised the dividend by 3% for 2022, and investors should see annual hikes in the 3-5% range over the next few years.

Pembina Pipeline

Pembina Pipeline (TSX:PPL)(NYSE:PBA) is a midstream energy infrastructure player that primarily supports Canadian oil and gas producers. It is a one-stop shop in the oil and gas sector that offers services such as gas gathering and processing, logistics, transmission, and gas liquids exports. Pembina Pipeline is also looking into investments in carbon sequestration and storage and has partnered with First Nations groups to evaluate an opportunity to build a new LNG facility.

Pembina Pipeline has a strong history of growth over the past 65 years through strategic acquisitions and internal development projects. Management did a good job of shoring up the balance sheet in 2020, and some delayed projects are now coming back online.

The rebound in the oil and natural gas markets looks set to continue for some time. As producers ramp up capital programs and boost output, Pembina Pipeline should see demand surge for its services.

The stock looks attractive right now and provides a 5.3% dividend yield.

The bottom line on top high-yield stocks for dividend investors

Canadian inflation is running above 5% in 2022 and will likely remain elevated until global supply chain issues start to get resolved and labour shortages disappear. Retirees and other income investors can still only get about 3% on a five-year GIC, so dividend stocks remain the most attractive option to generate yields that can come close to covering the current rate of inflation.

Stocks carry risks, but top dividend payers tend to see their share prices move higher over the long term. TC Energy and Pembina Pipeline both pay attractive dividends that should be safe. Investors can quite easily build a diversified portfolio of top TSX dividend stocks today that would provide an average yield of 5% to 5.5%.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool recommends PEMBINA PIPELINE CORPORATION. Fool contributor Andrew Walker owns shares of TC Energy and Pembina Pipeline.

More on Dividend Stocks

Specialty Brands faces higher raw materials costs.
Dividend Stocks

What’s Next for Premium Brands Stock?

Shares of the specialty food production and distribution company have fallen about 25% since last October.

Read more »

Double exposure of a businessman and stairs - Business Success Concept
Dividend Stocks

2 Interesting Buys in Any Market

Here are two intriguing buys in any market climate that offer defensive appeal as well as growth and income earning…

Read more »

Dividend Stocks

TFSA Investors: 3 TSX Stocks for Tax-Free Passive Income

These Canadian corporations have strong visibility over future earnings and dividend payouts.

Read more »

Simple life style relaxation with Asian working business woman healthy lifestyle take it easy resting in comfort hotel or home living room having free time with peace of mind and self health balance
Dividend Stocks

Lazy Landlords: 3 Cheap Canadian REITs to Buy in May 2022

You can become a passive landlord today by investing in Canadian REITs. Here are three cheap REITs to consider this…

Read more »

Target. Stand out from the crowd
Dividend Stocks

4 High-Yield TSX Stocks to Buy Ahead of Their Ex-Dividend Dates

If you have some cash lying idle, consider these high-yielding TSX stocks.

Read more »

growing plant shoots on stacked coins
Dividend Stocks

Passive Income: 3 TSX Stocks With Rapidly Growing Dividends

Worried about inflation? Here are three passive-income stocks to buy that pay rapidly growing dividends.

Read more »

Family relationship with bond and care
Dividend Stocks

Retirees: 4 Safe Stocks to Buy for Decent Passive Income

Retirees can offset the impact of runaway inflation by buying safe dividend stocks to create more cash flows.

Read more »

Canadian energy stocks are rising with oil prices
Dividend Stocks

3 Canadian Energy Stocks to Buy for Reliable Passive Income

Canadian energy stocks are gushing cash. Here's three top stocks that are perfect buys for reliable passive income.

Read more »