Dividend stocks are excellent additions to your portfolio as these stocks have outperformed the broader equity markets historically. Due to their consistent payouts, these companies are less susceptible to market volatility. Besides, investors can reinvest the payouts to earn superior returns. Against this backdrop, let’s look at three high-yielding stocks that you can buy under $50.
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Canadian Utilities
Canadian Utilities (TSX:CU) operates a low-risk natural gas and electricity transmission and distribution business. It is also strengthening its presence in renewable energy, energy storage, industrial water, and alternative fuels. Its low-risk transmission and distribution and highly contracted power-generation businesses have delivered solid cash flows irrespective of the broader market conditions, thus allowing it to raise dividends consistently. The utility company has raised its dividends for the previous 52 years and currently offers a healthy dividend yield of 5.2%.
Moreover, CU is continuing with its capital investment plan and could grow its rate base at an annualized rate of 3.5 to 4.3% until 2026. The company has also planned to deploy around $1.5 billion in renewable energy over the next nine years, adding 1.5 gigawatts of power-producing capacity. These growth initiatives could boost its financials and cash flows, thus facilitating its dividend growth in the coming years.
Keyera
Another under-$50 dividend stock I am bullish on is Keyera (TSX:KEY), an integrated energy infrastructure company. It gathers, processes, stores, and transports natural gas and natural gas liquids. Besides, it offers value-added services to its customers across North America. Supported by its fee-for-service and take-or-pay contracts, the company has grown its DCF (discounted cash flows)/share at an annualized rate of 8% since 2008 and raised its dividends at a 6% CAGR (compound annual growth rate). With a quarterly dividend of $0.52/share, the company currently offers a healthy dividend yield of 5
%.
Moreover, the demand for integrated services could increase as oil and natural gas production in Western Canada is projected to rise, thus benefiting Keyera. Amid growing demand for its services and continued capital investments, the company’s management expects its fee-based adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) to grow at 7–8% annually through 2027. Also, its financial position looks healthy, with its net debt-to-adjusted EBITDA multiple at 1.9, well below its guidance of 2.5 to 3. Given its solid financials and healthy growth prospects, I expect Keyera to continue paying dividends at a healthier rate.
Canadian Natural Resources
Third on my list is Canadian Natural Resources (TSX:CNQ), which has raised its dividends at a 21% CAGR for 25 years and currently offers a healthy dividend yield of 4.5%. Supported by its long-life, low-decline assets, diversified and balanced asset base, and effective and efficient operations, the company has delivered solid financials and cash flows, supporting its dividend growth.
Further, CNQ has planned to make a capital investment of $6 billion this year, expanding its asset base. It aims to drill 361 net wells this year and build infrastructure to lower downtime. Driven by these growth initiatives, the company’s management expects its 2025 annual average production to be between 1,510 BOE/d (barrels of oil equivalent per day) and 1,555 BOE/d, with the midpoint representing a 12% increase from 2024. Meanwhile, oil prices have strengthened over the last few weeks amid a dip in inventory levels in the United States and the fear that the broader sanctions by the United States could disrupt oil supply to China and India. So, increased production and higher oil prices could boost CNQ’s financials, thus making its future dividend payout safer.
