Passive Income: 3 Dividend Stocks With Yields Over 5%

The pipeline stock Enbridge Inc (TSX:ENB)(NYSE:ENB) yields well above 5%.

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Are you looking for dividend stocks that yield more than 5%?

If so, you’re in luck. This year’s market correction has sent many stocks lower. As a result, they now have much higher yields than they used to. Even in sectors that are rallying — like energy — dividends are increasing faster than stock prices are. So, there are good dividend stocks to be found in just about every sector.

Algonquin Power & Utilities

Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) is a Canadian utility stock that yields 5.21%. Its stock price has fallen over the last 12 months, because its earnings have declined. It might seem like that’s a bad thing, but it looks like much of AQN’s earnings decline has been “on paper” losses.

Over the last 12 months, AQN’s earnings have declined 65% while its operating cash flow has increased 191%. This suggests that the company’s earnings may have fallen due to mark-to-market “losses,” depreciation, or some other like factor. At any rate, AQN’s most recent quarter was very strong, boasting metrics:

  • $0.21 in EPS, up 5%, which is in line with estimates
  • $735 million in revenue, up 15.9%, beating estimates
  • An 11.59% net profit margin
  • A 7% return on equity

All of these figures were greatly improved from the prior year quarter, suggesting that AQN has upside.

Pembina Pipeline

Pembina Pipeline (TSX:PPL)(NYSE:PBA) is a Canadian pipeline stock that yields 5.03%. The company is involved in transporting oil and gas. It also has a crude oil marketing business. PPL’s most recent quarter delivered the following results:

  • $3 billion in revenue, up 50%
  • $858 million in gross profit, up 36%
  • $655 million in cash from operations, up 44%
  • $1 billion in adjusted EBITDA, up 20%

It was a pretty strong quarter. And with oil and gas prices rising, Pembina Pipeline has the potential to keep the good times rolling.


Enbridge (TSX:ENB)(NYSE:ENB) is another pipeline stock. This one yields about 6%. Enbridge is Canada’s biggest pipeline company and a major oil transporter in North America. It also has a natural gas utility business that supplies 75% of Ontario’s natural gas needs. Enbridge hasn’t risen as much as some oil stocks this year, because its business doesn’t profit off higher oil prices as much as E&P companies do. Nevertheless, Enbridge is having a good run this year. Its most recent quarter, ENB delivered the following:

  • $0.95 in EPS, up 1%
  • $0.84 in adjusted EPS, up 3.7%
  • $2.9 billion in cash from operations, up 11%
  • $3.1 billion in distributable cash flow, up 10%

As you can see, the growth wasn’t as strong here as it was in Pembina’s case, but the company nevertheless expanded. So, there is a real possibility for ENB’s already sky-high yield to go even higher. Over the last five years, Enbridge has increased its dividend by about 9% per year. If Enbridge keeps up this dividend-growth track record, then it should have an even higher yield on cost tomorrow than it has today. And its current yield is already among the highest of large-cap TSX stocks.

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.

Fool contributor Andrew Button has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and PEMBINA PIPELINE CORPORATION.

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