The dream of nearly every investor is to live off a juicy dividend income that leaves your principal intact. To the surprise of many newer investors, establishing that safe dividend income stream is easier than you think.
That’s especially true when considering these ultra-high-yield dividends which can supercharge your portfolio.
The big banks are always a great option
You can’t mention safe dividend income in 2024 without thinking about one or more of Canada’s big banks. And there’s a good reason for that view.
The banks provide a reliable revenue stream that is backed by a mature domestic segment. They also boast international growth and a juicy dividend, which collectively makes them great buy-and-forget candidates.
So then, which big bank can provide safe dividend income in 2024 and beyond? While all of the big banks do boast reliable revenue and stable growth, Canadian Imperial Bank of Commerce (TSX:CM) is a unique option for investors to consider right now.
CIBC is smaller than its peers, and by extension has a smaller international presence. This makes the bank rely more on its domestic business to drive higher earnings. It also means that during times of increased market volatility, such as the rising rate environment we’ve seen recently, the stock is more volatile than its peers.
As a result, CIBC trades near flat year to date. But as the market continues to improve, the stock has staged a recovery. As of the time of writing, the stock has surged 14% over the past year. Prospective investors should recall that investing in CIBC is a long-term play despite any shorter-term movements.
In other words, buy it, hold it, and watch it (and your safe dividend income) grow.
Perhaps the main reason why investors should consider CIBC is the juicy dividend that it offers. As of the time of writing, CIBC offers investors a yield of 5.58%. The bank also has an established precedent of providing annual upticks to that dividend.
This handily puts it onto a list of stocks to generate safe dividend income.
Some energy is what your portfolio needs
Most investors are familiar with Enbridge (TSX:ENB). The energy sector behemoth operates the largest and most complex pipeline system on the planet. That pipeline network, which contains both natural gas and crude elements, generates the bulk of Enbridge’s revenue.
But that’s not all that Enbridge does.
The company also operates a growing renewable energy portfolio of over 40 facilities. Those sites are located across North America and Europe, generating another growing (and important) revenue stream.
In fact, Enbridge has invested over $9 billion into the segment over the past two decades.
Enbridge also operates the largest natural gas utility in North America. That title comes thanks to a trio of acquisitions completed last year that boosted Enbridge’s customer count in the segment to seven million.
And like traditional utilities, both the renewable and natural gas segments are subject to long-term regulated contracts that provide a reliable and recurring revenue stream.
That revenue stream allows Enbridge to invest in growth and pay out one of the best dividends on the market. As of the time of writing, Enbridge’s quarterly dividend pays out an insane 7.47% yield.
This means that investors who drop $40,000 into Enbridge will generate an income of over $2,960.
Oh, and like CIBC, Enbridge has an established history of annual bumps to that dividend stretching back three decades.
In short, Enbridge is one of the stocks to generate a safe dividend income. The company is a well-diversified option with both growth and income-earning potential.
