The top dividend-paying stocks are smart investments that generate recurring passive income for decades. Moreover, a few offer high and sustainable yields, acting as a hedge against inflation and ensuring that the cash inflow continues with time.
Against this background, let’s look at top Canadian stocks known for offering high and well-covered yields. These companies have fundamentally strong businesses to support their payouts. Moreover, these stocks provide a compelling yield of at least 6%, making them attractive investments to buy and hold for decades for a steady passive income.
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BCE
Canadian telecom giant BCE (TSX:BCE) is among the best high-yield stocks on the TSX right now. The company is known for consistently paying and growing dividends, showcasing the resilience of its payouts across various market conditions.
BCE has an impressive streak of 16 consecutive years of dividend growth. Moreover, it currently pays a quarterly dividend of $0.998 per share, translating into a high yield of 8.2%, based on a closing price of $48.95 as of September 9.
BCE’s focus on efficiently growing its subscriber base and reducing costs enables it to generate solid earnings to support its payouts amid macro and competitive headwinds. This consistency makes BCE a reliable choice for investors seeking dependable income and high yield.
BCE’s cutting-edge broadband fibre network and fast 5G mobile service are growing its user base and supporting revenue. Furthermore, the company’s transition to a digital-first model has led to an increase in its digital ad revenue, diversifying BCE’s revenue streams. Moreover, BCE’s focus on emerging growth areas like cloud computing and security services is expected to further boost earnings.
In summary, BCE’s growing earnings base, commitment to enhancing shareholders’ value, and expansion into growth sectors make it a top stock for investors seeking high and stable yields.
Enbridge
Enbridge (TSX:ENB) is another top TSX stock offering a high and reliable dividend yield. This energy company has a long history of delivering dividends to its shareholders, paying them consistently for over 69 years. What’s even more impressive is that Enbridge has grown its dividend at an annual rate of 10% over the last 29 years. This means that with Enbridge, investors can expect a durable and increasing income.
Enbridge stock offers an attractive dividend yield of 6.6%, based on its closing price of $55.31 on September 9. This yield isn’t just high; it’s also well-supported by the company’s solid financials. Enbridge has a strong track record of growing its earnings and distributable cash flow (DCF), which ensures it can continue paying and increasing its dividends over time.
What makes Enbridge particularly appealing is its diverse range of revenue streams. The company operates across conventional and renewable energy sectors and holds long-term contracts and power-purchase agreements (PPAs), all of which help stabilize and grow its cash flow. This steady flow of income allows Enbridge to increase its dividend payouts.
A robust multi-billion-dollar capital plan will support Enbridge’s future growth. By focusing on low-risk, low-capital projects and accretive acquisitions, the company can expand its earnings and keep increasing the quarterly dividend payments.
Enbridge’s earnings per share and DCF per share are projected to increase by 5% in the coming years. This growing earnings base will enable the company to expand its dividends at a similar pace.
In short, investors seeking a high yield and growing dividend income could consider buying and holding Enbridge stock for decades.
