Dividend stocks with high yields. These are often the most highly favoured stocks on the TSX any day of the week, time of year, or economic situation. Especially here in Canada. And yet, not all dividend stocks are created equal.
While one dividend stock might offer a supremely high dividend yield, the payout ratio may spell out another story. Which is why today we’re looking at three dividend stocks that have a secure and stable dividend. One that will continue to climb and pay out for investors in the near and likely distant future.
TC Energy stock
TC Energy (TSX: TRP) is a leading North American energy company focused on natural gas pipelines, liquids pipelines, and energy infrastructure. The company operates in Canada, the United States, and Mexico, providing essential energy solutions.
The company offers a diversified portfolio of energy assets ensuring stable and predictable cash flows. TC Energy stock also has long-term contracts with creditworthy customers, reducing revenue volatility. What’s more, ongoing expansion projects, such as the Coastal GasLink pipeline, will significantly enhance TRP’s capacity and revenue potential. The company’s focus on renewable energy projects also positions it well for the transition to cleaner energy sources.
Yet TRP’s current valuation is attractive compared to its historical averages and industry peers, making it a compelling investment. So with a 6.7% dividend yield and more growth to come, TRP stock certainly belongs in many investor portfolios.
Sun Life
Sun Life Financial (TSX: SLF) is a leading international financial services organization providing a diverse range of insurance, wealth, and asset management solutions. The company operates in key markets worldwide, including Canada, the United States, and Asia.
Sun Life has a strong market position in Canada and a growing presence in the United States and Asia. Its diverse product offerings and strong brand recognition contribute to its competitive advantage. SLF’s business model is resilient, with a balance between insurance and wealth management services. This diversification reduces the impact of economic cycles on the company’s overall performance.
What’s more, Sun Life has a history of consistent dividend growth, supported by strong earnings and cash flow generation. This makes it an attractive option for income-focused investors. So with a 4.7% dividend yield and 58% payout ratio, it’s a strong dividend stock for many.
Scotiabank
The Bank of Nova Scotia (TSX: BNS), also known as Scotiabank, is one of Canada’s Big Five banks. It provides a wide range of financial services, including personal and commercial banking, wealth management, and investment banking, with a strong presence in Canada and international markets, particularly in Latin America and the Caribbean.
Scotiabank’s strong international presence, especially in high-growth Latin American markets, provides diversification benefits and growth opportunities beyond the mature Canadian market. BNS maintains a strong balance sheet with healthy capital ratios and asset quality. This financial strength supports its ability to weather economic uncertainties and continue paying dividends.
What’s more, BNS is trading at a discount compared to its historical valuation and peers, offering an attractive entry point for investors seeking exposure to the banking sector. So with a dividend yield at 6.7% and payout ratio of 71%, while trading at 10.5 times earnings, it’s one great deal.
Bottom line
These three dividends stock offer compelling investment opportunities for investors seeking stable returns and growth potential. Each company has strong fundamentals, attractive valuations, and strategic advantages in its respective industry. While risks exist, the potential rewards make TRP, SLF, and BNS worthy considerations for a diversified investment portfolio.
