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This year, Canadian equity markets have performed exceptionally well, with the benchmark, S & P / TSX Composite Index, an increase of 16%. However, rising inflation and high valuations have made stock markets volatile lately. Thus, investors can buy the following four Canadian stocks to strengthen their portfolios while earning stable passive income.
Enbridge
Enbridge (TSX: ENB) (NYSE: ENB) operates 40 miscellaneous assets, with 98% of its Adjusted EBITDA generated through regulated assets or long-term contracts, generating stable cash flow. This stable cash flow has enabled the company to pay continuous dividends for 66 previous years while increasing its dividend at a 10% CAGR for the last 26 consecutive years. Currently, its dividend stands at a healthy yield of 6.7%.
Enbridge plans to make a capital investment of $ 17 billion over the next three years, which could increase its Adjusted EBITDA by $ 2 billion. Along with these investments, the recovery in demand for oil could increase the rate of use of its assets, thus pushing up its finances. Given its healthy growth outlook, stable cash flow, and strong $ 9 billion cash flow, I think its dividend is secure. Thus, Enbridge would be a great buy for income seeking investors.
Northwestern Health Care
Likewise, Northwest Healthcare Properties REIT (TSX: NWH.UN) could be a great addition to your portfolio, given its highly defensive and diversified assets. It owns and operates healthcare properties in seven countries. Thanks to its long-term contracts and its government-backed clients, the company enjoys a high occupancy and recovery rate. A significant portion of its rent is indexed to inflation, which is encouraging.
Meanwhile, the company also plans to expand its presence in Australia, the United States and Western Europe. Currently, he is working on the acquisition of the Australian Unity Healthcare Property Trust, which owns 62 hospitals and medical facilities. It benefits from a high occupancy rate of 98% and a diversified tenant base with a weighted average lease term of 16 years. Thus, the acquisition could significantly increase NorthWest Healthcare’s cash flow, allowing it to pay its dividend at a healthier yield. Currently, the company pays a monthly dividend, with a forward yield of 6.15%.
AEC
AEC (TSX: BCE) (NYSE: BCE) steps up capital spending to expand 5G and broadband coverage across Canada. The company currently provides 5G service to 23 markets in Quebec, Ontario and Manitoba. Meanwhile, the company plans to expand coverage to 70% of the Canadian population by the end of the year. The expansion could increase its customer base, improving its finances.
The business could also benefit from the growing demand due to increased digitization and distance work and learning. He also recently collaborated with Amazon Web Services to enrich its customer experiences and modernize its applications and services. In addition, its financial situation also appears healthy, with liquidity of $ 6.5 billion. Thus, the company is well equipped to continue to increase its dividend. Currently, the company pays a quarterly dividend of $ 0.875 per share, with a forward dividend yield of 5.72%.
Keyera
An energy infrastructure company, Keyera (TSX: KEY), is my last choice. Thanks to its growing asset base, the company has increased its DCF (discounted cash flow) per share to a 9% CAGR since 2008. These robust cash flows have enabled the company to increase its dividend at a rate of 7% annualized growth during this period. It currently pays a monthly dividend of $ 0.16 per share, with a forward dividend yield of 5.59%.
Meanwhile, the company plans to invest more than $ 400 million this year, expanding its asset base. Along with these investments, the growing demand for oil in a context of economic expansion could influence its finances in the coming quarters. Given its healthy liquidity position of $ 1.5 billion and a payout ratio of 67%, Keyera’s dividend is secure.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of the board of directors of The Motley Fool. The Motley Fool owns shares and recommends Amazon and Enbridge. The Motley Fool recommends KEYERA CORP and NORTHWEST HEALTHCARE PPTYS REIT UNITS and recommends the following options: $ 1,920 long calls in January 2022 on Amazon and $ 1,940 short calls in January 2022 on Amazon. Fool contributor Rajiv Nanjapla has no position in the mentioned stocks.
