Investors planning to start a dependable passive-income stream could consider investing in the shares of Canadian companies with consistent dividend payments and growth. Further, one could focus on stocks offering high and sustainable yields.
With this backdrop, let’s look at the three Canadian stocks to buy in November 2023. These stocks are backed by businesses with solid fundamentals and yielding over 6%.
Enbridge
I have always stressed that Enbridge (TSX:ENB) is a must-have stock for income investors. The reason is the resilience of its payouts. The energy infrastructure company has been paying a dividend for over 68 years. Further, its payout ratio of 60-70% of the DCF (Distributable Cash Flow) is sustainable in the long term.
What stands out is that Enbridge’s dividend has grown at a CAGR (compound annual growth rate) of 10% in the past 28 years. Furthermore, the oil and gas transporter paid and even increased its dividend payments during the pandemic, when most energy companies either reduced or stopped their payouts.
The resilience of its dividend distributions stems from its diversified revenue streams, a consistently high utilization rate of its assets, and long-term contracts, which drive its DCF per share and support higher payouts. Moreover, power-purchase agreements, multi-billion-dollar secured projects, and regulated cost-of-service tolling arrangements will likely cushion its earnings and cash flows.
Enbridge remains committed to strategic investments in conventional and renewable energy assets, which positions it favourably to meet long-term energy demand. Moreover, utility-like growth projects and strategic acquisitions will likely accelerate its growth. While income investors can rely on Enbridge, the company offers a high yield of 7.7% (based on its closing price of $46.10 on November 10).
Scotiabank
From energy, let’s turn towards Canadian banks. Renowned for their robust track record of dividend distribution, top Canadian banks are reliable choices for income investors. One notable option among the major banks is Scotiabank (TSX:BNS), and there are compelling reasons to invest in its shares.
This financial services company has been paying dividends since 1833. Furthermore, Scotiabank’s dividend has grown at a CAGR of 12% in the past decade. Its diversified revenue base, exposure to high-growth banking markets, solid asset quality, and focus on improving operating leverage augur well for long-term growth and dividend payouts.
While the stock is facing near-challenges stemming from higher deposit costs and an increase in provisions. However, its long-term fundamentals remain intact. Also, Scotiabank stock offers a high yield of 7.2%.
Telus
Investors looking to start a passive income stream in November might consider Telus (TSX:T), a formidable player in the telecommunications industry. With a track record of consistent profitable growth, Telus can boost shareholder returns through share buybacks and increased dividend payments.
It’s worth noting that Telus has been growing its dividend regularly. Further, T stock has distributed dividends exceeding $18 billion to its shareholders since 2004. Additionally, Telus aims to increase its annual dividend by 7-10% until 2025. Also, it offers a lucrative yield of over 6.1%. This positions Telus as a solid choice for income-focused investors.
In summary, Telus’ growing earnings base, focus on expanding its 5G and PureFibre infrastructure, solid payouts, and high yield support my bullish outlook.
