Investing in dividend stocks, especially those offering high yields, can help generate significant passive income over time. However, it’s essential to be selective, as chasing high yields alone can be risky. Thus, investors should focus on fundamentally strong companies with growing earnings. By investing in these stable businesses, investors can enjoy a reliable stream of income, even when the market is volatile.
It’s worth noting that Canada’s central bank has started easing its monetary policy and announced an interest rate cut. As a result, these dividend stocks have become even more attractive due to their higher yields.
Against this backdrop, here are three TSX stocks with over 6% dividend yield to buy today.
#1. Enbridge stock
Enbridge (TSX:ENB) is definitely one to consider if you’re looking for reliable and high-yield dividend stocks. The energy infrastructure company has been paying dividends for about seven decades. Moreover, it has consistently increased its dividend by an average of 10% annually over the past 29 years. Enbridge’s attractive payouts and commitment to enhancing its shareholders’ value through higher dividends make it a top income stock.
Besides resilient payouts, Enbridge stock offers a high yield of about 6.6% based on its closing price of $55.18 on September 18.
The company operates an extensive liquid pipeline network, which benefits from high utilization rates. Additionally, Enbridge’s revenues are supported by power-purchase agreements (PPAs) and regulated cost-of-service tolling frameworks. These factors provide steady cash flow, helping to ensure the reliability of its payouts.
Enbridge is pursuing projects with low-risk, predictable cash flows and diversifying its revenue streams, which will support its growth. Furthermore, acquisitions and productivity initiatives are expected to drive future earnings and dividends in the years to come.
#2. Telus stock
Telus (TSX:T) is another reliable TSX stock to buy now for high yield. The Canadian telecom giant has paid $21 billion in dividends since 2004. Further, it consistently enhances its shareholders’ returns through higher dividends under its multi-year dividend-growth program.
Telus stock offers a high yield of 6.8%, and the company plans to increase its dividends by 7-10% annually. Moreover, Telus’s payout ratio of 60-75% is sustainable, considering its ability to consistently generate solid earnings cash flows.
The telecom company continues to invest in its PureFibre Network and 5G infrastructure, which will drive its subscriber base and future earnings. Moreover, Telus is expanding into high-growth sectors like digital transformation and cybersecurity, which will accelerate its earnings growth rate and drive higher payouts.
#3. Whitecap Resources stock
Whitecap Resources (TSX:WCP) stock should be on your radar for its high yield of about 7%. Moreover, this energy company pays a monthly dividend, which increases its appeal to income-focused investors.
The company’s high-value reserves and low-decline assets support its volumes and overall financials. Thanks to its solid portfolio and ability to expand production, Whitecap’s funds flow per share has increased by about 13% annually since 2010. This has enabled the company to enhance its shareholders’ value through regular dividend payments and share buybacks.
Whitecap Resources is likely to return more cash to its shareholders in the future. It will likely benefit from its focus on growing its high-quality asset base, increasing production, and lowering its cost structure. Further, Whitecap’s low leverage and strengthening balance sheet will support its financials.
