The market’s trajectory remains uncertain due to persistently high inflation and rising interest rates. However, investors can still earn steady and high yields from top Canadian dividend stocks, regardless of where the market moves.
While dividends are not guaranteed, investors can diversify their portfolios and invest in stocks with solid payment histories, well-protected payouts, and a growing base of earnings and cash flows. Thankfully, the TSX has several companies that have been consistently paying dividends for years and have well-covered payouts. Here, I’ll discuss three Canadian stocks offering high yields and are reliable bets.
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TC Energy
Energy infrastructure company TC Energy (TSX:TRP) is a solid stock for investors seeking a high and reliable yield. It owns a high-quality portfolio of regulated and contracted assets that witness high utilization, remain relatively immune to economic conditions, and generate most of its earnings. What stands out is that TC Energy offers an attractive dividend yield of 6.6% (based on its closing price of $56.13 on March 6).
Thanks to its solid asset base and high demand, TC Energy has enhanced its shareholders’ returns through consistent dividend hikes. For instance, TC Energy has raised its dividend for 23 years. Meanwhile, its dividend increased at a CAGR (compound annual growth rate) of 7% during the same period.
TC Energy’s utility-like business model, growing regulated and contracted assets base, and $34 billion secured growth projects will likely support its earnings and dividend payments. The company expects to increase its dividend by 3-5% annually, which adds visibility over its future payouts, making it a no-brainer dividend stock.
Enbridge
Like TC Energy, Enbridge (TSX:ENB) is another large-cap stock to earn steady and high yields. Enbridge transports hydrocarbons and has interests in renewable power generation. Thanks to its diverse business model, contractual arrangements, and inflation-protected EBITDA (earnings before interest, taxes, depreciation, and amortization), the company consistently generates solid distributable cash flows, which comfortably cover its payouts.
Notably, Enbridge has increased its dividend for 28 years at a CAGR of 10%. Moreover, even amid the pandemic, it paid and raised its dividend when most energy companies announced a payout cut.
Enbridge stock offers a dividend yield of 6.7%, which is well protected, thanks to its 40 diverse revenue sources, investments in growth projects, and revenue escalators. Also, its investments in conventional and renewable energy assets bode well for growth and will drive future payouts.
NorthWest Healthcare Properties REIT
REITs (real estate investment trusts) are famous for their high payout ratios. Within REITs, NorthWest Healthcare (TSX:NWH.UN) is a compelling investment, given its lucrative yield of 8.4%. This REIT owns a high-quality portfolio of diversified healthcare real estate assets.
Its defensive portfolio is backed by a high-quality tenant base with government support. Moreover, NorthWest benefits from its long-term weighted average lease expiry and high occupancy rate. Notably, NorthWest Healthcare has a lease expiry term of approximately 14 years. Meanwhile, it has an occupancy rate of 97%. Furthermore, most of its rents have protection against inflation, which helps in organic growth.
Its high yield and defensive portfolio make it a solid dividend stock.
