Whenever there’s a downturn in the stock market and companies quickly become undervalued, it’s always advantageous for long-term investors with cash to invest. However, perhaps the most advantaged investors are those looking to buy Canadian dividend stocks, considering the discounts they trade at and the much higher-than-normal yields they offer.
The key is to ensure that the stocks you’re looking to buy are high-quality companies you have confidence in owning long term. Then when you find these stocks and buy them while they trade at a discount, you can lock in years of returns, both from capital gains as well as the dividends they pay.
If you’re looking to find top Canadian dividend stocks to buy now, here are three high-yielding stocks you’ll certainly want to consider.
One of the best Canadian stocks to buy for dividend growth
One of the best stocks that Canadian investors can buy both for its high yield and its long-term dividend growth is Enbridge (TSX:ENB), the massive energy infrastructure stock.
Enbridge is an incredibly important business to the North American economy, which is why it’s no surprise that the blue-chip Canadian stock has a market cap of more than $97 billion.
It has several different operations which are all crucial to the energy industry in North America, including its oil pipelines which carry roughly 30% of all the crude oil produced in North America, and its gas transmission segment, which transports roughly 20% of all the natural gas consumed in the United States.
And because these operations are so critical to North America’s economy, Enbridge is a reliable stock to buy and hold for the long term. In addition, though, it’s also an incredible dividend stock, since it’s constantly generating billions in cash flow.
In fact, with the stock trading almost 20% off its high, its dividend yield has now risen to an unbelievable 7.3%. Plus, that dividend has increased for 27 consecutive years, showing what an impressive Enbridge stock is.
So, if you’re a dividend investor looking for high-quality, high-yielding Canadian stocks to buy now, Enbridge is certainly a top choice to consider.
A high-yielding energy stock with a manageable payout ratio
In addition to Enbridge, another high-quality Canadian dividend stock with an unbelievably high dividend yield is Freehold Royalties (TSX:FRU).
Freehold Royalties is an energy stock that’s made for dividend investors. Rather than producing oil or gas itself, it owns the land that other energy companies use to produce oil and gas.
Therefore, it’s a business with lower risk than many of its peers, and because it’s an asset-light business model, Freehold returns a tonne of the cash it earns to investors each month.
The company doesn’t need to spend any money on capital expenditures, so, in theory, it could pay out all of its cash flow. However, in addition to funding the dividend, which currently yields over 7.6%, Freehold also retains capital to invest in expanding its business and buying more land.
Therefore, it’s one of the best high-yielding Canadian stocks you can buy, considering it pays an attractive dividend but also offers plenty of long-term growth potential.
And with the stock retaining capital to invest in the future, it’s expected to have a payout ratio of free cash flow of just 63% in 2023, showing what a safe and reliable dividend Freehold pays.
A royalty stock that’s made for passive-income seekers
Lastly, much like Freehold Royalties, another impressive Canadian stock that’s made specifically for dividend investors is Diversified Royalty (TSX:DIV).
Diversified Royalty is an intriguing business that earns royalties from several brands that it’s invested in and partnered with. The company targets well-established and growing businesses with multiple locations.
Therefore, since the stock is constantly earning revenue from these royalty payments, it returns the majority of its cash flow to investors.
And because each of the companies it receives royalties from operates in different industries, it diversifies the revenue sources and makes Diversified Royalty a much safer and more reliable business.
And with the stock offering an unbelievable dividend yield of 8.33% today, it’s hard to ignore. So, if you’re looking for top Canadian dividend stocks to buy now, Diversified Royalty is an intriguing stock you’ll certainly want to consider.
