2 Rock-Solid Dividend Stocks Yielding up to 6.8%

Even a few rock-solid dividend stocks offering healthy yields can help you start a sizable passive income, assuming you are working with enough capital.

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Buying up dividend stocks is one of the best ways to make your money make more money for you. If you can park a substantial enough sum in the right dividend stocks, you can start a passive income that might significantly substantiate and augment your primary income.

However, dividends and yield shouldn’t be the only thing you look at. The stock should (ideally) be stable enough to at least sustain your capital — if not, grow it. With that in mind, there are two rock-solid dividend stocks you might consider looking into.

An energy stock

The TSX has a healthy selection of energy stocks that offer decent yields, but Enbridge (TSX:ENB) stands out for several reasons, starting with its size.

It’s the largest energy company in Canada by market capitalization, the largest pipeline company in North America, and one of the largest midstream companies in the world. Its massive pipeline network transports about 20% of the natural gas used in the U.S., making it a critical business for millions of Americans.

The business model is also intriguing. Pipeline businesses are already safer and more stable than typical energy companies. Enbridge has augmented that strength by making its utility business even more stable.

It’s also one of the most generous dividend stocks in the energy sector, currently offering dividends at a yield of about 7.5%.

That’s partly thanks to the 18% discount the stock trades at from its five-year high. It’s a well-established aristocrat that has grown its payouts (thanks to its stable business model and revenues) for nearly three decades. So you can trust this stock to generate a passive income that’s not just stable but steadily growing.

A bank stock

Dividends are the primary reason investors are partial to Canadian bank stocks, even though some offer a healthy combination of dividends and growth. But if you are focused on the former, you may consider Bank of Nova Scotia (TSX:BNS), which is currently the most heavily discounted and highest-yield bank stock in Canada right now.

The bank is currently trading at a 33% discount from its peak in February 2022, and this slump has pushed its yield quite high, about 6.8%.

It’s also an aristocrat, and the generous dividends are backed by a steady payout ratio of 70%. It’s a bit high, and Bank of Nova Scotia is two quarters late raising its dividends. Both of these factors undermine its importance as a dividend aristocrat. But the yield is high enough to rebalance the scales.

Foolish takeaway

The two dividend stocks offer solid yields. Considering their history and business models, they are unlikely to slash their dividends and highly likely to keep growing their payouts for decades to come. So, locking in their current generous yields can have a strong positive impact on your dividend income potential.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Bank Of Nova Scotia and Enbridge. The Motley Fool has a disclosure policy.

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