Dividend Powerhouses: Canadian Stocks to Fuel Your Portfolio

These solid Canadian dividend stocks offer the power to energize your future… see where I’m going with this?

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Energy stocks have long been superior choices for any investor seeking out dividend income. These companies tend to have long-term, stable contracts that will continue to support dividend raises. However, the energy market is shifting.

That’s why now is a great time to invest in the future of energy stocks, and the often high dividend yields that come with them. So today, we’re going to focus on two renewable energy stocks that offer high dividends, as well as a strong long-term source of returns and income. Furthermore, each continues to trade below fair value, offering the potential for large returns in the near future, on top of dividends.

Brookfield Renewable Partners

Brookfield Renewable Partners LP (TSX:BEP.UN) is a leading global renewable energy company. The company owns and operates a diversified portfolio of assets, including hydroelectric, wind, solar, and storage projects.

BEP stock is an apt choice for investors wanting in on the growing demand for renewable energy. The global demand is expected to increase by 8% per year over the next five years. As costs fall and demand increases, a large, diverse company such as Brookfield stock will certainly see its contracts rise.

Brookfield stock also remains financially sound, with a strong track record of increasing its dividend as well. Second, BEP.UN has a strong track record of dividend growth. It offers a low debt-to-equity ratio of 93.7%, leaving it open to make new investments for projects that will maintain and strengthen its dividend.

So with shares of Brookfield stock down 18%, it’s a great time to consider the stock. That’s especially as it has risen in share price by 111% over the last decade alone, not including the large increase experienced in 2021. Right now, investors can lock in this stock with a dividend yield at 4.52%.

Hydro One

Another strong choice for investors in renewable energy stocks is Hydro One (TSX:H). This renewable energy company develops, owns, and operates hydrogen production facilities. The company’s goal is to be a leading provider of clean hydrogen for the global market.

Whereas Brookfield stock focuses on a diverse range of assets, Hydro One focuses mainly on hydro. Yet the global demand for hydro is expected to grow by 7% per year over the next five years. Though the stock hasn’t been around for long, Hydro One even in that time has steadily increased its dividend.

It now remains in an incredibly strong financial position, backed with a large investment from the government of Ontario. Hydro One stock also produces strong cash flow, and is currently quite valuable trading at 2.9 times sales, and 2 times book value.

Overall, Hydro One stock looks like a strong stock with a superior track record, though it hasn’t been on the market long. Shares are up 4% in the last year, though down about 6% in the last few months to buy on a dip. Yet with shares up 92% in the last five years, and a 3.12% dividend yield to consider, it looks like another excellent stock to pick up today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in Brookfield Renewable Partners. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

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