3 TSX Dividend Stocks With 6% Yields You’ll Regret Not Buying at Today’s Prices 

Bear markets offer attractive dividend stocks at unbelievable discounts. It is an offer you can’t refuse.

| More on:
Canadian energy stocks are rising with oil prices

With a low stock price comes high dividend yields. In the stock market, red signifies a time to buy, and green signifies a time to sell. The market colour is red today, and it’s time to buy high-growth dividend stocks at a heavy discount. You will regret not buying them today, before a rally reduces the dividend yield.

Algonquin Power & Utilities: The dividend powerhouse 

A utility stock is a dividend powerhouse. A company needs regular free cash flow to pay dividends. With electricity and gas bills rising, cash flows are increasing for utility companies. But Algonquin Power & Utilities (TSX:AQN) stock is down 21% from its average trading price. A stock price below $15 is an attractive buy point for this dividend powerhouse. As a mid-cap stock, Algonquin doesn’t appear in the league of dividend aristocrats. But the company has paid regular quarterly dividends since 2011 and increased them annually at a compounded annual growth rate (CAGR) of 10%. 

The bear market has pulled down the stock price to March 2019 levels and inflated the dividend yield to 6.67%. The stock price is falling as Algonquin is in the middle of acquiring Kentucky Power and transitioning to green energy. Moreover, oil and gas have caught the attention of investors amidst the global energy crisis. For certain, the winter season will be bullish for Algonquin as electricity consumption increases, bringing higher cash flow till mid-February. 

If you buy the stock now through your Tax-Free Savings Account, you can lock in capital appreciation of 42-47% and a yield of over 6%. In dollar terms, a $250 investment can grow to $355 + $12.20 in annual passive income.

Enbridge: A stock every dividend lover holds 

While Algonquin is a relatively young stock, Enbridge (TSX:ENB) is a veteran in the energy space, paying dividends since the 1960s. Your parents are probably living off their retirement from Enbridge’s dividend. It earns cash from the toll money it collects for transmitting oil and gas through its pipeline infrastructure, which connects Canada to the United States. 

The Russia-Ukraine war has created a new opportunity for North American liquefied natural gas (LNG) exports as Europe has stopped buying gas from Russia. Enbridge is looking to tap a 30% share of the LNG export market with its upcoming projects. The LNG opportunity will drive Enbridge’s future dividend growth. 

The fear of a recession and rising interest rates does make investors wary of high-debt companies. But Enbridge has a low-risk model, wherein 90% of its debt is fixed rate and 98% of its cash flows are underpinned by contractual agreements. Its third-quarter distributable cash flow surged 10%, hinting at a 7-8% increase in dividend in December (up from 3% dividend growth in the last two years). 

Enbridge stock is trading at a 10% discount from its June high, which has inflated its dividend yield to 6.47%. The stock is trading in the middle of its 52-week low and high. ENB stock is still a buy ahead of the December hike, CEO transition, and peak of winter. 

BCE: A stock with long-term growth 

BCE (TSX:BCE) diversifies your exposure to the steady dividends of the telecom sector and growth of the 5G revolution. BCE’s accelerated capital program is showing results. The company reported its highest net additions of mobile phones (64% growth) and fibre-to-the-home (36.3% growth) in the third quarter. It is just the beginning as the fifth generation technology unfolds artificial intelligence at the edge. However, the bear market has put BCE stock at 2019 levels and inflated dividend yields by close to 6%. 

BCE’s free cash flow surged 13.4% in the third quarter. The cash flow will continue to surge, giving the company enough liquidity to keep growing dividends. This stock can give you 40–50% growth in the long term. 

How to enhance your returns?

By buying the above three stocks now, you can lock in over 6% yield and enjoy dividend growth. You can enhance your returns by reinvesting these dividends in the same stock or in a growth stock. A $100 dividend withdrawn is $100, but if invested wisely can become $200. 

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 Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

Get Set for Success in 2023 With 3 Top Canadian Dividend Stocks

Here are three Canadian dividend stocks that could be set to succeed.

Read more »

data analyze research
Dividend Stocks

Passive Income + Value: 2 Dividend Studs to Buy Together

Buy and hold Agnico Eagle Mines (TSX:AEM) and another steady dividend payer right here.

Read more »

Increasing yield
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks to Buy Before November Ends

Given their high dividend yields and attractive valuations, these three stocks are excellent buys for income-seeking investors.

Read more »

money cash dividends
Dividend Stocks

3 Great Dividend Stocks You Can Buy for Less Than $100

These under-$100 stocks can generate solid passive income for investors amid all market conditions.

Read more »

Canadian stocks are rising
Dividend Stocks

1 Dividend-Growth Stock You Won’t Want to Miss in the Real Estate Sector

A growth-oriented REIT is a strong buy today after raising its dividend by more than 5% in each of the…

Read more »

HIGH VOLTAGE ELECRICITY TOWERS
Dividend Stocks

Better Buy: Emera Stock vs. Hydro One

Higher-risk utility Emera should provide higher returns over the next five years, given the dip and its higher yield.

Read more »

Payday ringed on a calendar
Dividend Stocks

Passive-Income Hat Trick: 3 TSX Stocks to Buy for Monthly Cash

Investors seeking passive income can invest in these Canadian dividend stocks and earn attractive monthly passive income.

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

Get Passive Income of $435/Month With This TSX Stock

Here’s how dividend investing in Canada could help you get reliable monthly passive income.

Read more »