In February, Canada’s inflation rose to 5.7%, a 30-year high. Higher inflation will lower your purchasing power. So, people should boost their passive income to maintain their lifestyle. One of the cheapest ways to earn passive income is by investing in quality dividend stocks. Given their regular payouts, these companies would not only boost your passive income but also strengthen your portfolios. Meanwhile, here are my four top dividend stocks that you can buy right now.
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TC Energy
TC Energy (TSX: TRP)(NYSE: TRP) is a midstream energy company that earns around 95% of its adjusted EBITDA from regulated assets and long-term contracts. So, its cash flows are mostly stable and predictable. Supported by solid cash flows, the energy infrastructure company has raised its dividends at an annualized rate of 7% since 2000. Its forward yield currently stands at 5.04%.
Meanwhile, the company is progressing with its $24 billion commercially secured projects, with around $6.5 billion expected to be delivered this year. Supported by these investments and rising energy demand, its management expects to grow its adjusted EBITDA at a CAGR of 5% through 2026. So, I believe TC Energy is well-positioned to continue raising its dividends in the coming years, thus making it an excellent buy in this uncertain environment.
Algonquin Power & Utilities
Algonquin Power & Utilities (TSX: AQN)(NYSE: AQN) operates regulated and unregulated power generation, distribution, and transmission assets, delivering stable cash flows. It has increased its dividends by over 10% annually for the last 11 consecutive years, with its forward dividend yield currently at 4.43%.
Meanwhile, the company will be investing around US$12.4 billion over the next five years, expanding its utility and renewable power generating facilities. These investments could grow its rate base at a CAGR of 14.6%, boosting its earnings and cash flows in the coming years. So, the company is in an excellent position to maintain its dividend growth. So, I believe Algonquin Power & Utilities could strengthen your portfolios amid rising volatility.
TransAlta Renewables
TransAlta Renewables (TSX: RNW) has an economic interest in 50 power-producing facilities, with a total power-producing capacity of 3 gigawatts. Meanwhile, the company has signed several power-purchasing agreements through which it sells most of its power, thus shielding against price and volume fluctuations while generating stable cash flows. The strategic acquisitions have also boosted its financials, supporting its dividend growth.
Since 2013, the company has increased its dividends at a CAGR of 3%. Currently, its forward yield stands at a healthy 5.1%. Amid the invasion of Russia of Ukraine, the European Union is planning to boost its wind and solar projects to lower its dependence on Russian oil, which could expand the addressable market for TransAlta Renewables. So, the company’s outlook looks healthy.
NorthWest Healthcare Properties REIT
My final pick is NorthWest Healthcare Properties REIT (TSX:NWH.UN), which owns and operates health care facilities. Given the defensive nature of its portfolio, long-term contracts, and government-backed tenants, the company’s occupancy and collection rate remain high irrespective of the economy. So, the company’s cash flows are stable, thus allowing it to pay monthly dividends, with its forward yield at a healthy 5.75%.
Meanwhile, the company last week completed the previously announced equity offerings to raise around $187.5 million. These proceeds could partially fund its acquisition of health care properties in the U.S. for $764 million. The company is also expanding its footprint in Australia, Europe, Brazil, and Canada. These new assets could increase its cash flows, allowing NorthWest Healthcare to continue paying dividends at a healthier rate.
