It can be a frustrating feeling to watch the economic environment worsen from both a consumer and investor’s point of view. The silver lining is that it gives us the opportunity to buy many of the best Canadian stocks at a discount. High-yield dividend stocks are especially enticing while they offer even higher yields than normal.
The cyclicality of both the stock market and economy is something that we can’t avoid. It’s also something that is very difficult to predict.
However, it’s still possible to take advantage of these environments and build a portfolio of high-quality, long-term stocks while they trade at compelling discounts.
So if you’re looking to boost your passive income and take advantage of the current market environment, here are two high-yield dividend stocks to consider adding to your portfolio today.
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A top high-yield dividend stock to boost your passive income
After the rapid increase in interest rates over the last year and a half, many high-quality utility stocks are trading off their highs and offering higher dividend yields than investors are typically used to from these low-risk stocks.
Emera (TSX: EMA), for example, is trading almost 20% off its high. The electric power producer currently offers a forward dividend yield of roughly 5.2%, significantly higher than its 5-year and 10-year averages of 4.8% and 4.65%, respectively.
Therefore, while this high-yield dividend stock is trading cheaply, it gives investors the opportunity to buy one of the top dividend growth stocks on the market.
Emera has highly defensive operations. Plus, its businesses are well diversified, with operations in six different countries across North America.
Furthermore, it has plenty of growth potential over the years as the need for electricity increases while countries continue to transition to cleaner energy.
Therefore, given its defensive qualities and highly predictable revenue growth, Emera is one of the top high-yield dividend stocks to buy now. For 16 straight years, Emera has increased its dividend, and going forward, it’s aiming to increase the dividend between 4% and 5% each year through 2025.
So while this excellent passive income generator trades cheaply and offers a higher yield than normal, it’s one of the best investments you can make today.
A top passive income generator with long-term growth potential
AltaGas (TSX: ALA) is another high-yield dividend stock offering investors an appealing entry point today. In fact, it’s even cheaper than Emera as it currently trades about 30% off its 52-week high.
The stock’s dividend yield has now climbed to 4.9%, well above where it was this time last year when it was at 3.9%.
Therefore, while this high-yield dividend stock is trading this cheaply, it’s certainly one of the best you can buy now.
Much like Emera, AltaGas has lower-risk utility operations that earn it a tonne of predictable cash flow. In addition, AltaGas owns midstream assets, which actually gives it more long-term growth potential than its low-risk utility business.
In recent years, AltaGas has continued to find new ways to help Canadian producers export liquid natural gas from the west coast. It has also divested many non-core assets, allowing it to pay down debt, strengthen its balance sheet, and make its dividend much safer.
Therefore, considering how cheap AltaGas is trading and its attractive long-term growth potential, it’s certainly one of the best high-yield dividend stocks to consider adding to your portfolio now.
