Dividend investing is one of the top-notch strategies for investors looking for defensive growth. Companies that earn meaningful dividends tend to rely on strong and growing earnings. Accordingly, for those concerned about inflation, dividend stocks can provide a great portfolio moat — especially in times like these.
Among the companies I think are worth considering in this regard are Enbridge (TSX: ENB)(NYSE: ENB) and Dream Industrial REIT (TSX: DIR.UN).
Here’s why.
Top dividend stocks: Enbridge
Enbridge is the owner of extensive midstream assets that transport hydrocarbons across Canada and the United States. The company’s pipeline network covers regional oil sands pipelines, natural gas pipelines, and the Canadian Mainline system. Enbridge also operates and owns Canada’s biggest natural gas distribution firm and a regulated natural gas utility. Further, the organization boasts a small renewables portfolio that primarily focuses on offshore and onshore wind projects.
Last year, Enbridge allocated $10 billion in growth projects across its businesses, which include the gas distribution and transmission segments. In addition, the energy infrastructure company completed the acquisition of logistics organization Moda Midstream Operating LLC. This $3 billion acquisition helped it gain the biggest export terminal in Texas.
These strong operations support a high and growing dividend distribution of $3.44 per year. Right now, that translates into a yield of 6%. For those thinking long term, there’s a lot to like about this “floor” return on one’s investment outside of capital-appreciation gains.
Dream Industrial REIT
Dream Industrial Real Estate Investment Trust is among the best industrial REITs in the market, in my view. This trust looks forward to building upon and growing its portfolio while extending sustainable and stable cash distributions to its unitholders. This open-ended and unincorporated REIT’s business is geographically organized into Western Canada, Ontario, Quebec, the United States and Europe. The Canadian portfolio is responsible for a substantial part of this company’s revenue.
The company declared solid fourth-quarter 2021 and year-end financial results a few days back. Dream Industrial saw its net income increase 133% in Q4 2021 and touch $190.0 million. This is in comparison to $81.5 million in the fourth quarter of 2020. Last year, the net income was $608.3 million on a year-over-year basis — an increase of 204% in comparison to $200.1 million in 2020.
Like Enbridge, Dream Industrial provides a very attractive dividend yield of 4.3%. Those thinking long term have a lot to like about how these dividend stocks are positioned right now.
