The TSX Index is full of top dividend stocks that now offer investors attractive yields and growing distributions for a self-directed portfolio focused on passive income.
Power Corp
Power Corp (TSX: POW) is a holding company with subsidiaries primarily located in Canada that operate in the insurance and wealth management sectors. Power Corp owns a controlling interest in Great-West Lifeco and IGM Financial. These companies are home to businesses that include Canada Life, Empower, Mackenzie Investments, IG Wealth Management, and Investment Planning Counsel, among others.
In addition, Power Corp owns large positions in fintech investments such as Wealthsimple. Holdings also include positions in electric vehicle maker Lion Electric and other businesses in emerging sectors.
Power Corp trades near $37 per share at the time of writing compared to the 2022 high around $44. The stock looks cheap right now when you consider the quality of the earnings stream it gets from the holdings and the upside potential for value creation provided by the numerous investments in emerging industries.
Investors who buy the stock at the current price can pick up a solid 5.35% dividend yield.
TC Energy
TC Energy (TSX: TRP)(NYSE: TRP) is a leading player in the North American energy infrastructure sector with more than $100 billion in assets located in Canada, the United States, and Mexico. The company’s core business is the transmission and storage of natural gas. TC Energy operates more than 93,000 km of natural gas pipelines carrying natural gas from producers to utilities or liquified natural gas (LNG) facilities.
The global LNG market is expected to expand considerably in the next few years. Europe is scrambling to secure reliable natural gas supplies from international providers, as it tries to end its reliance on Russia. At the same time, utilities around the globe are converting from oil and coal to natural gas to produce electricity, as they ramp up investments on renewable energy and green technologies. Solar, wind, and hydroelectric power are ideal, but they are reliant on weather conditions. Cloudy days, calm days, and droughts all impact the ability of these facilities to produce power, and they can’t ramp up output to meet times of surging demand. As a result, gas-fired power production will remain important for decades.
TC Energy has a $24 billion capital program on the go that will support steady EBITDA growth in the coming years. It is building a pipeline to connect natural gas producers to a new LNG facility on the coast of British Columbia. TC Energy is also exploring opportunities in hydrogen and carbon sequestration.
The board has raised the dividend annually for more than two decades. Increases in the 3-5% range are expected in the coming years. Investors who buy the stock today can pick up a 5.1% dividend yield.
The bottom line on top dividend stocks to buy now
Power Corp and TC Energy pay attractive dividends that should continue to grow. If you have some cash to put to work in a portfolio focused on passive income, these stocks deserve to be on your radar.
