The Middle East crisis has been wreaking havoc on global economies by pushing energy prices higher through the blockade of the Strait of Hormuz and tensions in the region. Despite a fragile ceasefire that seems to be holding for now, many newer investors are unsure about putting money to work in a volatile stock market.
Canadians with a long-term perspective on stock market investing can still pick investments that can weather short-term volatility and provide significant wealth growth down the line. The Canadian stock market boasts several high-quality dividend stocks with a stronger ability to maintain payouts and increase them over the years through different market cycles.
Backed by strong fundamentals, growing earnings, and a commitment to provide shareholders with their returns through regular distributions, these holdings can be excellent to consider. Against this backdrop, here are two high-quality dividend stocks that you can add to your portfolio.
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Enbridge
Enbridge Inc. (TSX: ENB) is one of the top picks for income-seeking investors due to its historically compelling dividend yield. The $161.5 billion market-cap giant in the Canadian energy industry owns and operates one of the most extensive energy infrastructure networks in North America. It transports roughly a fifth of the crude consumed and produced in the region, making it vital to the economy.
Enbridge also has growing utility operations, and it has become the operator of one of the biggest utility businesses in North America. The dividend stock has paid investors their dividends for over seven decades and has increased payouts by roughly 9% since 1995. As of this writing, it trades for $74.01 per share and pays investors $0.97 per share in each quarter, translating to a juicy 5.2% dividend yield.
Emera
Emera Inc. (TSX: EMA) is a $21.8 billion market-cap player in the Canadian energy industry that engages in providing renewable energy through several segments. Regulated electric and natural gas utilities tend to generate stable and predictable revenues through all market cycles. While that might mean the stock does not deliver much in capital gains, it makes up for that with reliable payouts.
Due to its ability to generate resilient cash flow across different market cycles, Emera stock is another favourite for income-seeking investors. As of this writing, Emera stock trades for $71.34 per share, and it pays $0.7325 per share to its investors each quarter. Boasting a 4.1% dividend yield, it can be an excellent addition to your self-directed investment portfolio for reliable dividend income.
Foolish takeaway
TSX stocks with solid fundamentals and wide economic moats are better-suited to navigate a volatile market environment than most others. When the dust settles, such TSX stocks tend to fare better than the rest of the market and provide greater returns to investors. However, it is also necessary to diversify your holdings.
Enbridge stock and Emera stock can be excellent investments to consider in this environment, but make sure you diversify across several industries to minimize the risk to your self-directed investment portfolio.
