4 Dividend Stocks With Yields of at Least 5% in a Bearish Market

By investing in these stocks, investors can earn reliable dividend yield of 5% or more.

Sneha Nahata

Sneha is a M.Sc. in finance and has been a Motley Fool contributor since mid-2020. Sneha specializes in writing about bank, energy, consumer and TMT (technology, media, and telecom) stocks. She focuses on identifying winning long-term stock picks.

Published June 30, 2022 12:45 pm EDT

With top TSX growth stocks erasing most of their gains and the broader market under the bear grip, it’s prudent to focus on earning steady and high yields from relatively stable stocks. Besides offering regular income, high-quality dividend stocks offer protection to your portfolio due to their strong earnings base. Among the top dividend payers, my top picks offer dividend yields of 5% or more.

Scotiabank

Let’s begin with Scotiabank (TSX: BNS)(NYSE: BNS). The financial services giant has a stellar track record of dividend payments. It paid its first dividend in July 1833. Moreover, it has been continuously paying dividends since then.

What’s more? Scotiabank’s increased its dividend at a CAGR of 6% since 2011. Further, investors can earn a reliable dividend yield of 5.4% by investing in it at current levels.

Scotiabank’s diversified revenue streams, exposure to high-growth banking markets, rising interest rates, and strong credit quality bode well for growth. Also, its focus on driving productivity and strong balance sheet bode well for future earnings growth and dividend payouts.

TC Energy

With 22 consecutive years of dividend growth and most of its adjusted EBITDA coming from the regulated and contracted assets, TC Energy (TSX: TRP)(NYSE: TRP) is one of the most reliable names to generate regular income amid all market conditions.

TC Energy owns a solid and growing portfolio of regulated and contracted assets that generate resilient cash flows to support its payouts. Further, a high utilization rate, multi-billion secured capital projects, energy transition opportunities, steady energy demand, and higher commodity prices will support its growth.

Thanks to its solid cash flows, TC Energy expects to deliver 3-5% growth in its annual dividend in the coming years. Further, TC Energy offers a dividend yield of 5.3%.

NorthWest Healthcare Properties REIT

Investing in REITs could be a smart move to generate regular income. Moreover, NorthWest Healthcare (TSX:NWH.UN), with its defensive portfolio of healthcare assets, is a reliable investment amid the current market scenario.

As most of its tenants are supported by governments, NorthWest generates relatively stable cash flows. Further, its long lease expiry term, high occupancy rate, and growing penetration of inflation-indexed rents support its payouts. NorthWest is also expanding into high-growth markets and focusing on deleveraging its balance sheet. What stands out is that NorthWest Healthcare offers an attractive dividend yield of 6.6%.

Enbridge

Energy infrastructure giant Enbridge (TSX: ENB)(NYSE: ENB) is a dependable bet for income investors. With 27 consecutive years of dividend growth and a high yield of 6.3%, it is a must-have stock in your portfolio. It’s worth mentioning that despite the challenges from the COVID-19 pandemic, Enbridge didn’t reduce its dividend payments. Moreover, it continued to increase it, which reflects the strength of its business model and the resiliency of its cash flows.

Its diverse cash streams, high asset utilization rate, contractual arrangements, recovery in mainline volumes, and solid energy outlook provide a strong foundation for future earnings growth. Its solid secured capital program, acquisitions, and opportunities in the renewables segment bode well for growth. Also, about 80% of Enbridge’s EBITDA is protected against inflation. Enbridge’s payouts are well protected. Moreover, its payout ratio of 60-70% is sustainable.