The TSX has several amazing dividend stocks that consistently pay and increase their payouts, making them attractive investments to earn durable passive income. However, here, I’ll focus on five Canadian stocks that offer at least a 5% yield. Moreover, these fundamentally strong companies have a growing earnings base and a solid history of dividend distributions and growth.
Enbridge
Enbridge (TSX: ENB) is an excellent, high-yield Canadian stock for income investors. The durability of its payouts and well-covered yield support my optimistic outlook. This energy infrastructure company paid dividends for about 69 years. Moreover, it raised them for nearly three decades (over 29 years, to be precise) at a compound annual growth rate (CAGR) of 10%. Currently, Enbridge offers an attractive yield of 7.7% (based on its closing price of $47.77 on June 25).
Enbridge’s resilient business model, high-quality assets, diversified revenue stream, and ability to grow its earnings and distributable cash flow (DCF) per share support its payouts. Moreover, its long-term contracts and power-purchase agreements add stability. Enbridge’s earnings per share and DCF per share are projected to grow at a CAGR of approximately 5% in the long run. This would enable it to consistently increase its dividends by at least a low to mid-single-digit rate in the upcoming years.
Telus
Investors seeking top high-yield stocks could consider Telus (TSX: T). The telecom giant’s ability to grow profitably enables it to offer higher dividends. Notably, Telus has raised its dividend 26 times since May 2011. Moreover, it aims to increase its dividend by 7 to 10% annually under its multi-year dividend-growth program. Additionally, it offers an attractive yield of 7.3%.
While Telus is grappling with near-term revenue headwinds, its fundamentals remain strong. The company focuses on cost efficiency to boost its margins and cash flows, supporting its payouts. Meanwhile, Telus’s investment in network infrastructure, digitization, and AI (artificial intelligence) technology will likely improve its customer service and network, and reduce churn. Also, the expansion of 5G services will further help boost its customer base and drive earnings and dividend payments.
Scotiabank
Scotiabank (TSX: BNS) is another amazing high-yield dividend stock for income investors. This leading Canadian bank has been paying regular dividends since 1833. Further, Scotiabank raised its dividends at a CAGR of 6% in the past decade, which shows the resiliency of its payouts and growing earnings base. The stock currently offers a compelling yield of 6.8%.
Scotiabank’s exposure to high-growth markets, focus on diversifying its revenue streams, improving efficiency, and solid balance sheet will likely drive its earnings and payouts. Moreover, this financial services giant remains focused on enhancing its shareholders’ returns through higher dividend payments.
Bank of Montreal
Within the banking space, Canadians can also rely on Bank of Montreal (TSX: BMO) stock for its stellar dividend payment history. This leading Canadian bank sports the longest track record of dividend payments in Canada. For example, Bank of Montreal has paid dividends uninterruptedly for over 195 years. Moreover, its dividend grew at a CAGR of 5% in the last 15 years. Currently, the stock offers a yield of 5.4%.
The bank’s diversified revenue base, solid deposit base, growing loan portfolio, and operational efficiency augur well for earnings growth. This will enable the Bank of Montreal to enhance its shareholders’ value through higher payouts. The financial services company expects its earnings to increase at a CAGR of 7 to 10% in the medium term. Given the growing earnings base, investors can expect the bank to increase its dividend by at least mid-single digits.
Canadian Utilities
Utility giant Canadian Utilities (TSX: CU) is a valuable stock for earning a high and safe yield. It boasts an unmatched 52-year dividend-growth history. Besides its resilient and growing dividends, Canadian Utilities offers a yield of over 6%, which makes it a compelling passive income investment.
Canadian Utilities’ defensive business model, reflecting a growing rate base and predictable cash flows, positions it well to boost shareholders’ value via higher dividend payments. It continues to invest in regulated utility assets, which will likely expand its future earnings and support its payouts.
