Focusing on passive income through dividends is an excellent strategy for stock market investors. Building a solid portfolio of dividend stocks can help you grow your investment capital regardless of market volatility. Share prices go up and down, but a solid dividend investing strategy keeps lining your account with cash through quarterly or monthly payouts.
The Canadian energy sector is a heavyweight on the TSX, and you can find plenty of high-quality dividend stocks in the industry. The top Canadian energy stocks have solid track records for paying shareholders their dividends and increasing payouts. It is important to identify stocks with solid fundamentals and the ability to sustain increasing payouts for years to come.
Against this backdrop, I will discuss two TSX energy stocks that dividend-seeking investors should consider adding to their self-directed investment portfolios this month.
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TC Energy
TC Energy (TSX:TRP) is not an energy company responsible for producing crude oil, natural gas, or other traditional energy products. It is an energy infrastructure company with an extensive pipeline network and power generation assets in Canada, the U.S., and Mexico. Responsible for transporting a lot of hydrocarbons transported throughout North America, it is a resilient business that consistently reports solid financial performances.
The fourth quarter of 2024 saw TC Energy report a 2% year-over-year increase in revenue. Growing electricity demand and increased natural gas transportation are expected to increase the company’s core profit to up to $10.9 billion in 2025. Its pipeline network remains a crucial driver for stable cash flows that allow the company to provide monthly distributions to its investors.
As of this writing, TRP stock trades for $67.30 per share, and it boasts a 5.05% annualized dividend yield.
Brookfield Renewable Partners
The renewable energy industry is becoming increasingly significant as governments worldwide continue to focus on greener energy initiatives. The top renewable energy stocks like Brookfield Renewable Partners (TSX:BEP.UN) are slated to become even bigger in the coming years due to their solid positions in the burgeoning industry. The energy sector is no longer all about oil and gas giants. Renewable energy companies are the future, and Brookfield is among the top players in this sector.
Brookfield boasts a $14.16 billion market capitalization, and it owns a globally diversified portfolio of clean energy assets that consist of hydroelectric, solar, wind, and storage facilities. Despite reporting a $464 million net loss in its latest quarter, the stock reported a solid $1.27 billion in operating cash flow, and it has $3.14 billion in liquidity. It recently increased its quarterly dividends by 5%.
As of this writing, Brookfield Renewable stock trades for $32.92 per share and boasts a 6.57% dividend yield.
Foolish takeaway
It is important to remember that stock market investing is inherently risky. No matter how well-established a stock is, volatile market conditions can impact earnings and, in turn, affect the ability to pay dividends. It is important to study underlying businesses to identify those with strong growth plans, a commitment to deliver returns to shareholders, and the fundamentals to support them.
To this end, TC Energy stock and Brookfield Renewables stock can be excellent investments for your portfolio.
