Dividend stocks are a must in a balanced portfolio. Along with paying regular payouts, these companies also stabilize your portfolio. Historically, dividend stocks have outperformed the broader equity markets. Meanwhile, here are three top dividend stocks that you can buy this month.
Pizza Pizza Royalty
Pizza Pizza Royalty (TSX: PZA) is one of the safest dividend stocks to have in your portfolio. It operates a highly franchised business, collecting royalty from its franchisees based on their sales. So, rising prices and wage inflations will not impact its financials. In the March-ending quarter, the company posted an impressive same-store sales growth of 13.6%, while its adjusted EPS (earnings per share) grew by 16.2%.
Supported by solid financials, the company raised its monthly dividends twice in two months. It currently pays a monthly dividend of $0.075/share, with its yield at 6.04%. Meanwhile, I expect the uptrend in the company’s financials to continue, given its restaurant expansion plans and growing same-store sales. Amid its continued national expansion plans, the company’s management expects to increase its traditional restaurant count by 3-4% this year. The company’s value messaging and promotional activities could continue to boost traffic, thus driving its sales.
Additionally, Pizza Pizza Royalty’s NTM (next 12-month) price-to-sales multiple of 0.8 looks cheap, given its high dividend yield and healthy growth prospects.
Enbridge
Enbridge (TSX: ENB) is another excellent dividend stock to have in your portfolio. The company operates a regulated midstream energy business, with around 98% of its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) generated from long-term contacts. So, fluctuation in commodity prices will have little impact on its financials. Supported by its stable cash flows, the company has raised its dividend at a CAGR (compound annual growth rate) of over 10% for the previous 28 years, while its forward yield currently stands at an attractive 7.21%.
Meanwhile, the company recently acquired Tres Palacios and is working on completing the acquisition of the Aitken Creek Gas Storage facility. Along with these initiatives, its secured capital program of $17 billion could boost its financials in the coming years. So, the company’s management expects its adjusted EBITDA to grow 4-6% annually through 2026 and around 5% afterward. So, I believe the company is well positioned to continue its dividend growth, thus making it an excellent buy.
BCE
With a dividend yield of 6.45%, BCE (TSX: BCE) is my final pick. The demand for telecommunication services is growing in this digitally connected world. Meanwhile, the company has aggressively invested $14 billion from 2020 to 2022, expanding its 5G and broadband infrastructure. With most of the infrastructure in place, the company plans to lower its capital intensity, which could raise its free cash flows.
BCE expects to cover 85% of Canadians with its 5G service by the end of this year. It expects to add 650,000 more broadband connections. The expansion in customer base and increase in average revenue per user could drive its financials. The company’s management expects its revenue to grow by 1-5% while its adjusted EBITDA could increase by 2-5%. Further, the company’s guidance also projects 2-10% growth in its free cash flows, making its payouts safer.
