If you’re a dividend investor, consider buying Canadian Utilities (TSX: FTS), Enbridge(TSX: ENB), and Fortis (TSX: FTS) stocks hand over fist this August. These leading dividend-paying companies have upcoming record dates in August 2024. To qualify for the next dividend payout, one must purchase these stocks at least two business days before the record date.
With this backdrop, let’s look at them to understand why these Canadian stocks could be valuable additions to your portfolio.
Canadian Utilities
Energy infrastructure corporation Canadian Utilities is a solid bet for earning worry-free passive income. Its diversified portfolio, rate-regulated assets, and defensive business model ensure stable earnings and cash flows, which in turn support its dividend payments.
Remarkably, Canadian Utilities has increased its dividend annually for the past 52 years, the longest streak for any publicly traded Canadian company. The company is also well-positioned to continue growing its future distributions in line with its sustainable earnings growth, driven by regulated and long-term contracted investments. These investments enhance the stability of its business by expanding its low-risk, high-quality earnings base.
The stock has a record date of August 8, with dividends payable on September 1. In addition to being a reliable income stock, Canadian Utilities offers a solid yield of 5.4%.
Enbridge
Energy infrastructure company Enbridge has a consistent track record of delivering annual dividend increases regardless of the market conditions. It has paid dividends for over 69 years. In November 2023, Enbridge announced a 3.1% increase to its dividend per share. Further, over the past 29 years, Enbridge’s dividend has grown at a compound annual growth rate (CAGR) of 10%.
Enbridge’s highly diversified revenue adds stability to its earnings and payouts. Further, its earnings are backed by long-term contracts and power-purchase agreements. The company will likely benefit from its growing conventional and renewable energy assets, which positions it well to capitalize on future energy demand. In addition to growing organically, Enbridge will likely benefit from accretive acquisitions, which will boost its cash flows and support dividend growth.
Enbridge’s earnings per share (EPS) and distributable cash flows (DCF) per share are projected to grow at a mid-single-digit rate in the long term. This means it could hike its dividend at a low- to mid-single-digit rate annually.
Enbridge stock has a record date of August 15, with dividends payable on September 1. It pays a quarterly dividend of $0.915 per share, yielding about 7% near the current market price.
Fortis
Investors could consider adding shares of the utility giant Fortis. Its record date is August 20, and dividends are payable on September 1. The company is known for its defensive business model and stellar track record of dividend payments and growth. For example, this regulated electric utility generates predictable and growing cash flows, which enables it to enhance shareholder value through higher dividend payments. Notably, Fortis raised its dividends for 50 years in a row and offers a decent yield of 4%.
The company continues investing in regulated assets, driving its earnings base and future dividend distributions. The utility expects its rate base to increase at a CAGR of 6.3% through 2028, which will help Fortis increase its dividends by 4 to 6% annually during the same period.
While Fortis’ dividend could continue to grow, its payouts are well-covered through a regulated earnings base.
