2 Top High-Yield Dividend Stocks to Buy in Canada
The Motley Fool
Published Jun 18, 2021 08:00
Updated Jun 18, 2021 08:15
2 Top High-Yield Dividend Stocks to Buy in Canada
Investment opportunities on the stock market change every month. Thus far, in 2021, TSX’s performance is better than expected. There’s growing optimism the index can sustain its upward trajectory given the high levels of COVID-19 vaccine uptake across Canada.
For dividend investors, the search continues for suitable and reliable income stocks. However, if you’re chasing high yields, the top choices to buy today are Enbridge (TSX:ENB)(NYSE:ENB) and Manulife Financial (TSX:MFC)(NYSE:MFC). Besides the attractive yields, both are Dividend Aristocrats.
Low-risk and resilient business model Enbridge is the cream of the crop. The premier energy stock is the perennial choice of yield-hungry investors, Tax-Free Savings Account (TFSA) users, and retirees. The $82.92 billion energy infrastructure company pays an over-the-top 6.98% dividend. Based on analysts’ forecast, the current share price of $40.71 could rise to $49.
The company delivers positive financial results almost every year because of strong operational performance, highly contracted utility assets, and stable cash flows. Expect a significant cash flow growth in 2022, as $10 billion of Enbridge’s $17 billion capital program will be placed into service this year.
Enbridge estimates a $2 billion incremental EBITDA annually from the said capital program. Its president and CEO Al Monaco stresses that Enbridge has great visibility to achieve between 5% and 7% cash flow growth through 2023. With a growing dividend, the energy stock is indeed a very attractive value proposition for shareholders.
Several projects in the renewable space are underway. Enbridge aims to build a portfolio of capital-efficient, low-carbon energy projects. Their commercial frameworks and returns align with the low-risk business model. Currently, a hydrogen-blending pilot project and four renewable natural gas projects are under construction.
Over the last 45.5 years, Enbridge’s total return is 46,281.04% (14.45% CAGR). Meanwhile, the blue-chip stock’s year-to-date return is 25.85%. The energy sector is the best-performing sector in 2021, following the slump in 2020.
Global strength and business diversity Manulife, one of the world’s largest life insurers, is a household name. Apart from insurance, the $47.75 billion company also provides wealth and asset management solutions and financial advice. At $24.59 per share, the corresponding dividend yield is 4.53%.
The top-tier insurance stock should appeal to value investors as well, because of its solid earnings outlook compared to others in the industry. Manulife’s growth drivers are its Asia and Global Wealth & Asset Management business segments. Currently, over 80% of the assets are fixed assets. Moreover, about 98% are investment grade.
Get The App
In Q1 2021 (quarter ended March 31, 2021), core earnings grew 67% year over year, although the $783 million in net income was a $513 million drop versus Q1 2020. According to Manulife president and CEO Roy Gori, the higher risk-free rates and a steepening yield curve within North America are why net income declined during the quarter.
Nevertheless, Gori said the operating results were very strong in Q1 2021 due to the double-digit growth in core earnings across the operating segments. He cited the global strength of Manulife and the diversity of its business for the impressive quarterly results.
Notably, Manulife’s digital transformation is progressing well. Auto-underwriting is now 72%, while straight-through-processing and eClaims are at 81% and 92%, respectively.
Income streams for decades Enbridge and Manulife are yours for the taking in 2021. You have two top-tier high yielders that could provide steady income streams for decades.
The post 2 Top High-Yield Dividend Stocks to Buy in Canada appeared first on The Motley Fool Canada.
Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge.
This Article Was First Published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.