Two of the best Canadian dividend stocks offering breathtaking returns


The acceleration in vaccine distribution, economic expansion, and recovery in consumer demand suggest that now is the time to put some of your money in stocks with high and secure dividend yields. In particular, improving the operating environment is likely to boost corporate profits and, in turn, support higher dividend payouts.

I focused on two of those Canadian companies that have consistently paid and increased their dividends. In addition, they offer high and safe returns.


Speaking of safe and high dividend yields, consider adding stocks of the energy infrastructure giant Enbridge (TSX: ENB) (NYSE: ENB) to your wallet. It offers an exceptional dividend yield of 7.2%. In addition to higher yields, an investment in Enbridge shares could help you earn regular dividend income that could continue to grow with you. Notably, it has regularly paid dividends for 66 consecutive years. In addition, it has grown steadily the same by a 10% CAGR over the past 26 years.

My optimism about Enbridge’s future dividend payments is supported by its low risk operations, which produce resilient and growing cash flows. Enbridge has more than 40 diversified cash flows and has entered into long-term contractual agreements with its customers. In addition, most of these contracts are secured by a purchase or payment or cost of service framework that reduces risk and adds stability. I believe that the recovery in energy demand, the resumption of its flow on the main grid and the continuation of the momentum of the core business should boost its distributable cash flow in the coming years and support dividend payments. higher.

I anticipate that increased use of its assets, growth in customer base, rate increases and opportunities in the renewable energy sector could significantly increase its cash flow. In addition, the guaranteed $ 16 billion capital program bodes well for future dividend growth.

Pembina pipeline

Like Enbridge, Pembina pipeline (TSX: PPL) (NYSE: PBA) also offers a very high, safe and very reliable dividend yield. In particular, the activity of Pembina Pipeline is heavily contracted, which means that its dividend payments are secure. The company has paid dividends for over 22 years and has grown it by a CAGR of 4.9% over the past decade.

Pembina generates robust fee-based cash flow, which supports its dividend payments. Meanwhile, its payout ratio is low and sustainable in the long run. In addition, Pembina Pipeline’s exposure to multiple commodities, recovering demand, higher volumes and higher prices suggest that its cash flow may continue to grow at a decent pace and support its 6.5% high efficiency.

In addition, the solid backlog of growth projects and operational leverage could accelerate the rate of growth of its sales and amortize its margins. In addition, Pembina Pipeline shares are trading at a lower EV / EBITDA multiple than its peers.

Final thoughts

Enbridge and Pembina Pipeline offer high and reliable returns. These companies have consistently increased their shareholder returns through increased dividend payouts. I believe that increased economic activity and higher average prices are likely to increase the profits of these two companies and drive up their dividends.

In addition, their payout ratios are sustainable over the long term, thanks to the diversity of cash flows and a prudent business mix supported by contractual agreements.

This article represents the opinion of the writer, who may disagree with the position of an “official” recommendation of a premium Motley Fool service or advisor. We are Motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer, so we’re posting sometimes articles that may not meet recommendations, rankings or other content. .

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool owns shares and recommends Enbridge. The Motley Fool recommends PEMBINA PIPELINE CORPORATION.


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