There are several strategies stock market investors can use to get excellent long-term returns on their investments in the market. Dividend investing with high-yield dividend stocks can be a great approach to generate sizeable returns.
A portfolio of the right dividend stocks can provide you with returns through capital gains and dividend payouts. Even when share prices become volatile, you can keep enjoying returns through regular quarterly or monthly payouts.
However, not all high-yielding dividend stocks are good picks to consider. When investing in dividend stocks, you must identify those that offer a healthy mix of yield, dividend history, and long-term stability.
Some of the top Canadian energy stocks offer you a good mixture of these qualities. Today, we’ll discuss two such stocks that can be good additions to your self-directed investment portfolio.
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Enbridge
Enbridge Inc. (TSX:ENB) is a $121.2 billion market capitalization giant in the Canadian energy industry. The Calgary-based multinational pipeline and energy company owns and operates one of the largest pipeline networks in North America. It transports a significant portion of hydrocarbons in the region.
The company’s business model lets it generate revenues shielded from changing energy prices. Rather than charging based on the price of the commodity, it charges based on volume transported. ENB stock uses its stable cash flows to fund regular quarterly payouts. It is also a Canadian Dividend Aristocrat that has grown payouts for 29 consecutive years.
As of this writing, ENB stock trades for $55.66 per share and boasts a 6.6% dividend yield supported by solid fundamentals.
TC Energy
TC Energy (TSX:TRP) is another astute pick from the Canadian energy sector. TC Energy is a Calgary-based $63.4 billion market capitalization company that develops and operates energy infrastructure across Canada, the US, and Mexico.
TRP leans more toward natural gas transportation, which might not be as lucrative as crude oil. However, the shift away from oil to renewable energy might work in the company’s favour in the long run. TRP stock offers dividends to investors on a monthly schedule.
As of this writing, TRP stock trades for $61.13 per share and boasts a 6.3% annualized dividend yield. The company has raised its payouts by around 7% annually for the last 24 years, making it another worthy pick for dividend-seeking investors.
Foolish takeaway
ENB stock and TRP stock can be ideal investments for a long-term, consistent, dividend-based income. If you buy and hold the stocks in your self-directed portfolio for decades, you can also enjoy substantial returns through capital gains over the years.
You can also use a dividend reinvestment program to reinvest the dividends you earn into more shares, accelerating your dividend growth through the power of compounding.
