Dividend stocks are a dependable source of steady passive income. Investors can generate income that will grow over time by selecting stocks with strong fundamentals, consistent earnings growth, a proven track record of paying dividends, and high yields. Thus, incorporating high-quality dividend stocks into your portfolio is a powerful way to supercharge your passive income as it compounds over the years, effectively boosting your overall returns.
With this backdrop, let’s explore three dividend stocks that can supercharge your passive income portfolio.
Source: Getty Images
BCE stock
With its high yield and stellar dividend payment and growth history, BCE (TSX: BCE) is one of the top stocks to supercharge your passive income portfolio. The leading Canadian communication company is known for enhancing its shareholder value in all market conditions. For instance, BCE has increased its dividend for 16 consecutive years, reflecting its commitment to reward shareholders and its ability to consistently generate solid earnings.
The communication giant focuses on effectively using promotions and growing its user base profitably, which will cushion its bottom line. Moreover, BCE’s cost reduction measures augur well for earnings growth.
Thanks to its consistent earnings growth, BCE is well-positioned to continue increasing its dividends in the coming years. The company’s extensive broadband fibre network, fast 5G mobile services, and efficient promotions will help expand its user base and lower churn. Further, its foray into high-growth areas such as digital advertising, cloud computing, and cybersecurity services will diversify its revenue base and support its payouts.
Besides paying higher dividends, BCE stock offers a compelling yield of 8.6% based on its closing price of $46.23 on October 21.
Fortis stock
Fortis (TSX: FTS) is a compelling Canadian dividend stock to supercharge your passive income. This utility company generates low-risk, predictable cash flows that support its higher dividend payouts. Fortis has raised its dividend for 51 consecutive years thanks to its growing cash flows. Further, the company expects to grow its dividend by 4–6% each year through 2029.
Its resilient business model, solid dividend growth history, and visibility over future payouts make it a worry-free passive income stock.
In the future, Fortis’ $26 billion capital plan will enable the company to increase its regulated rate base at an average annual growth rate of 6.5% through 2029. This rate base expansion will expand its low-risk earnings base and support dividend distributions. While Fortis is set to enhance its shareholder value with higher payouts, it offers a well-protected dividend yield of 4%.
Enbridge stock
Enbridge (TSX: ENB) is another compelling Canadian dividend stock. This energy infrastructure company is famous for its high and sustainable yield and stellar dividend payments and growth history.
Thanks to its highly diversified revenue streams, long-term contracts, measures to lower commodity price exposure, and power purchase agreements, Enbridge consistently generates solid distributable cash flows (DCF) that support its payouts. Notably, it has paid dividends for nearly seven decades and consistently increased its dividend for 29 consecutive years.
Enbridge’s high-quality liquid pipeline business will continue to benefit from a higher utilization rate. The company’s investments in conventional and renewable energy sources position it well to capitalize on energy demand. Low-risk utility-like projects and strategic acquisitions will drive its DCF and earnings per share (EPS), supporting higher dividend payments.
It’s worth noting that Enbridge projects a 5% increase in its DCF and earnings per share, which will help the company increase its dividend by low to mid-single-digit rates. Further, Enbridge stock offers an attractive yield of 6.4%.
