2 Dependable High-Yield Dividend Stocks to Buy Now!

If you’re looking to grow your passive-income stream in this environment, here are two of the best dividend stocks to buy now.

| More on:
stock research, analyze data

Image source: Getty Images

Often, when dividend investors look for new investments, they start with the dividend yield to see how much passive income they can earn. Of course, the higher the yield, the more the dividend stock looks like an attractive buy at first glance.

However, in some situations, a high yield can be a red flag and a sign that the stock is at risk. High yields can be a result of a stock selling off due to the fear and uncertainty about its future potential. In other situations, a stock can offer a high yield because it’s returning the majority of its capital to investors or offers little growth potential.

However, in this environment, because so many stocks have sold off and, in many cases, significantly, there are plenty of dependable and high-quality stocks that now offer exceptional yields and are worth buying.

If you’re a dividend investor looking to take advantage of this environment, here are two of the best to consider.

One of the best and most dependable dividend stocks you can buy

One of the best dividend stocks in Canada, and one that’s offering an exceptional yield above 6.4% today, is Enbridge (TSX:ENB)(NYSE:ENB).

Enbridge is one of the best dividend stocks to buy for a number of reasons. First off, its operations are defensive and hardly impacted by the economic environment. In addition, its operations also generate tons of cash flow, which is crucial, especially for a high-yield dividend stock like Enbridge.

In fact, for 2022, according to Enbridge’s guidance, it’s expecting to earn distributable cash flow per share of between $5.20 and $5.50. So, even if Enbridge only hits the bottom of that range, with the stock’s current dividend paying out just $3.44, it has a conservative payout ratio of just 66%.

Therefore, not only is the dividend safe, but Enbridge is also retaining cash, which it can use to invest in future growth.

Plus, if that’s not enough to convince you of Enbridge’s resiliency, it’s also consistently increased its dividend each year for more than a quarter-century. That means the stock has had to weather several different recessions and commodity cycles and has still been able to not only maintain its dividend but consistently increase it.

So, if you’re looking for the best high-yield dividend stocks to buy now, while the entire market is on sale, Enbridge is certainly a top candidate.

A high-yield REIT trading at an attractive discount

In addition to Enbridge, another high-quality stock to consider now is Nexus Industrial REIT (TSX:NXR.UN).

Nexus may be a lesser-known REIT, but it’s one of the best stocks that dividend investors can buy, especially if you’re looking for a high yield.

The REIT owns over 100 properties, roughly 70% of which are industrial properties and offer exceptional long-term growth potential, as industrial properties, such as warehouses, continue to see strong demand. These assets are diversified all across Canada, making Nexus even more dependable.

Plus, in addition to an attractive distribution that offers a yield of 6.8%, Nexus is also trading roughly 33% off its high, which is considerably undervalued. Not only that, but it’s also trading at just 0.7 times its estimated net asset value.

Therefore, if you’re looking for high-yield dividend stocks to buy now, Nexus is one you’ll certainly want to check out.

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 Daniel Da Costa has positions in ENBRIDGE INC. The Motley Fool recommends Enbridge.

More on Dividend Stocks

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

Top 2 REITs to Buy Before Yields Fall Along With Interest Rates

Canadian Apartment Properties REIT (TSX:CAR.UN) is just one REIT that could gain when rates really start to tumble.

Read more »

Printing canadian dollar bills on a print machine
Dividend Stocks

Where to Invest $10,000 in June

Canadian small caps are widely outperforming the TSX, and REITs, including Dream Industrial REIT (TSX:DIR.UN) could recover as interest rates…

Read more »

edit Real Estate Investment Trust REIT on double exsposure business background.
Dividend Stocks

Finally, This REIT ETF Could Be the Best Buy of 2024

This ETF is finally looking up, with enormous returns already in 2024. And a high dividend yield that should only…

Read more »

dividends grow over time
Dividend Stocks

3 Canadian Stocks Poised to Double by 2025

Three TSX stocks could benefit from an improved market environment, and break out and double by 2025.

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

Why Park Lawn Stock Nearly Doubled Last Week

Park Lawn (TSX:PLC) stock saw shares surge by 67% after the announcement that it would be going private as early…

Read more »

A Canada Pension Plan Statement of Contributions with a 100 dollar banknote and dollar coins.
Dividend Stocks

Claim CPP at 60? Here’s Why it Could Pay Off Big

Claiming the CPP at 60 has financial consequences but could be advantageous and more beneficial to some prospective retirees.

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

Rate Cut Tailwinds: A Dividend Dynamo Ready to Fly

SmartCentres REIT (TSX:SRU.UN) is a great high-yield play to own if you think rates will fall off from here.

Read more »

Increasing yield
Dividend Stocks

2 High-Yield Dividend Stocks That Are 10/10 Buys in June

These two dividend stocks are making a roaring comeback, and it's one that will only grow stronger now that interest…

Read more »