Dividends are a great source to boost income and meet expenses. Thankfully, the TSX has several top stocks that offer reliable dividends and high yields near the current levels, making them solid investments to meet your income needs.
However, investors must know that dividends are not guaranteed. Moreover, a very high yield could indicate that the company’s payouts could be unsustainable. Thus, investors should take caution before investing in dividend-paying stocks.
Against this backdrop, I’ll discuss three Canadian stocks offering lucrative yields. Moreover, these companies have a solid track record of dividend payments. Let’s begin.
Enbridge (TSX:ENB) is a top dividend stock for meeting income needs, and there are good reasons behind that. The company that transports oil and gas has a stellar dividend payment history, offers high yield, and is well positioned to enhance its shareholders’ returns. For instance, Enbridge has been paying a dividend for 68 years. Impressively, it increased the dividend at a CAGR (compound annual growth rate) of 10% in the past 28 years.
Enbridge pays a quarterly dividend of $0.887, translating into a dividend yield of 6.69% (based on its closing price of $53.07 on April 20).
The energy company is poised to deliver strong distributable cash flows in the coming years on the back of its highly diversified revenue sources. Meanwhile, its investment in conventional and renewable energy will likely help it to capitalize on the demand. Overall, its resilient business model, contractual arrangement, secured capital projects, and inflation-protected earnings are likely to drive its organic growth and dividend payouts. Enbridge’s payout ratio of 60-70% of its distributable cash flows is sustainable.
Like Enbridge, energy infrastructure company TC Energy (TSX:TRP) is another outstanding stock to earn a reliable dividend yield. The company transports hydrocarbons and owns a high-quality portfolio of regulated and contracted assets. Thanks to this solid asset base, it benefits from a high utilization rate while its business remains relatively immune to economic conditions.
TC Energy has increased its dividend at a CAGR of 7% since 2000. Meanwhile, it offers a compelling dividend yield of 6.64% (based on its closing price of $56.04 on April 20).
Its utility-like business model, a growing base of regulated and contracted assets, and $34 billion secured growth projects are likely to drive its earnings and dividend payments. Thanks to its resilient business, TC Energy expects to grow its dividend by 3-5% per annum in the coming years.
NorthWest Healthcare Properties REIT
NorthWest Healthcare (TSX:NWH.UN) operates as a real estate investment trust and offers a stellar dividend yield of 9.65% (based on its closing price of $8.29 on April 20). Its geographically diversified portfolio of healthcare real estate infrastructure provides stability and enables it to generate solid cash flows to enhance its shareholders’ returns.
NorthWest Healthcare’s top-quality tenant base (backed by government funding), long weighted average lease expiry term of 14 years, and high occupancy rate (about 97%) provide a solid base for future growth. Meanwhile, most of its rents have protection against inflation, thus allowing it to grow organically.
Overall, its defensive portfolio, high yield, and solid developmental pipeline make it an attractive investment to earn dividend income.