An ideal dividend stock is one that offers investors a sustainable but attractive yield as well as the potential to deliver capital gains over time. Historically, dividend stocks have outpaced the broader markets, but it remains challenging to identify the best stocks consistently.
Here are the top Canadian dividend stocks yielding over 4% that you can consider buying in April 2023.
Brookfield Infrastructure stock
One of the top-performing TSX stocks since its initial public offering, Brookfield Infrastructure Partners (TSX:BIP.UN) has grown its funds from operations by 11% annually and increased dividend distributions by 9% in the last 10 years. This has allowed BIP stock to return 388% to investors since April 2013 compared to the S&P 500 gains of 208.5%.
Despite a challenging macro environment, BIP increased funds from operations by 20% year over year in 2022. The company’s inflation-linked contracts, project completions, and capital-recycling strategies powered its cash flow growth last year.
While costs remain elevated in 2023, BIP’s portfolio of cash-generating assets is backed by inflation-linked rates. Moreover, the completion of a petrochemical complex in Canada will continue to drive earnings higher in 2023.
Brookfield Infrastructure plowed in close to US$3 billion towards acquisitions in 2022, which should result in higher cash flows in 2023 and beyond. The company is also optimistic about increasing funds from operations by 10% in 2023 on a per-share basis.
Down 17% from all-time highs, BIP stock offers you a dividend yield of 4.3%. It’s priced at a discount of 30% to consensus price target estimates.
Brookfield Renewable Partners stock
Brookfield Renewable Partners (TSX:BEP.UN) has returned 373% to shareholders since April 2003. In the next five years, BEP expects cash flows to grow by at least 10% yearly due to a combination of inflation escalation, margin enhancement, capital expenditures, and accretive acquisitions.
One of the biggest megatrends of the upcoming three decades will be the accelerated investments in renewables. The worldwide shift towards clean energy solutions alone makes BEP a top bet for investors, given its massive size.
Brookfield Renewable ended 2022 with more than 110 gigawatts of renewable power projects that are in multiple stages of development. This capacity, once developed, will generate enough power to supply the home energy requirement of Canada.
Down 32% from all-time highs, BEP stock offers you a dividend yield of 4.3%.
goeasy stock
The final TSX stock on my list is goeasy (TSX:GSY) a company that operates in the financial lending space. GSY stock has returned over 1,000% in the past decade but is also down 58% from all-time highs, offering a yield of 4.2%.
goeasy has increased dividends by more than 20% in the last 20 years, showcasing the resiliency of its business model. The company has witnessed a pullback in share prices due to the banking crisis south of the border and a sluggish global environment.
In the fourth quarter of 2022, goeasy’s loan originations were up 25% year over year at $632 million, up from $507 million in the year-ago period. The uptick was driven by divisions such as unsecured lending, home equity loans, auto financing, and point-of-sale lending.
It ended 2022 with a gross consumer loan receivable portfolio of $2.79 billion, up 28% from $2.03 billion in 2021.
Priced at 6.6 times forward earnings, GSY is undervalued and trades at a discount of 75% to consensus price target estimates.
