Invest $25,000 in These 3 Dividend Stocks for $1,600 in Annual Income

Dividend stocks are essential in a well-balanced portfolio. Given their regular payouts, these companies are less prone to market volatility. Besides, investors can earn a stable passive income and reinvest these regular payouts to earn superior returns. Against this backdrop, let’s assess three top Canadian dividend stocks that present excellent buying opportunities. An investment of $25,000 in these three stocks could generate over $410 every quarter and $1,640 annually.

Telus

Telus (TSX:T) is one of the high-yielding dividend stocks to have in your portfolio. The Canadian telco has rewarded its shareholders by returning $27 billion through dividends and share repurchases since 2004. It has also raised its dividends 27 times since May 2011 and currently offers an attractive dividend yield of 7.8%.

Meanwhile, the demand for telecommunication services is increasing amid growing penetration, the digitization of business processes, and the rise of remote learning and working. The rising demand has created long-term growth potential for Telus. Besides, the company continues to invest in expanding its 5G and broadband infrastructure. It plans to invest $2.5 billion this year, which could help expand its customer base and boost its financials. Furthermore, its other segments, Telus Health and Telus Agriculture & Consumer Goods, are experiencing healthy growth due to strategic investments and solid execution. Considering its growth prospects, I expect Telus to continue rewarding its shareholders with a healthy dividend yield.

Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS) is another Canadian stock with a solid track record of dividend payments. The bank operates in over 20 countries, offering various financial services. Given its expanded geographical presence and diverse financial services, the company enjoys reliable cash flows, which have facilitated uninterrupted dividend payouts dating back to 1833. Its quarterly dividend payout of $1.06/share translates into a healthy forward dividend yield of 6.3%.

Moreover, BNS has acquired a 14.9% stake in KeyCorp, which could contribute a net income of $62 million to its second-quarter earnings. However, removing special items, its adjusted net income will be $71 million. Further, the company is scaling back its exposure to Latin America by transferring its retail banking operations in Panama, Costa Rica, and Colombia to Davivienda. Meanwhile, BNS will acquire a 20% stake in the combined entity in exchange. The transaction could improve its Common Equity Tier 1 ratio by 10–15 basis points. Furthermore, falling interest rates could boost economic activities, thus driving credit demand and benefiting the company. Therefore, I believe BNS can continue to reward its shareholders with healthy dividends.

Enbridge

Enbridge (TSX:ENB) operates a pipeline network transporting oil and natural gas across North America through a tolling framework. It also operates several renewable energy assets and sells the power generated from these facilities through long-term power purchase agreements, shielding its financials from price fluctuations. Additionally, its rate-regulated natural gas utility business stabilizes its financials, thereby generating reliable financial results regardless of economic cycles. Supported by these robust financials and cash flows, Enbridge has paid dividends for 70 consecutive years and has increased its dividends at an annualized rate of 9% for 30 prior years. Its forward dividend yield currently stands at 5.9% as of its April 28 closing price.

Furthermore, Enbridge continues to expand its asset base and aims to increase its assets to $23 billion by 2027. Along with these growth initiatives, the company also focuses on optimizing its assets and enhancing operational efficiency to boost its margins. Amid these growth prospects, the company’s management expects its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) to grow 7–9% annually through 2026 and 5% thereafter. Considering these factors, I believe Enbridge’s future dividend payouts will be safer, making it an enticing buy.