3 Canadian Dividend Stocks to Buy for 2022 and Beyond!
September 13 2021 - 5:44AM
Finscreener.org
There are several benefits when
it comes to
investing in dividend
stocks. Investors can
generate a predictable income stream via dividend payouts as well
as benefit from long-term capital gains. While there are a ton of
dividend-paying stocks in the U.S., you can also consider Canadian
companies with equally strong fundamentals that fly under the
radar.
The Canadian stock market is not
as well-known compared to equity markets south of the border. But
this does not mean you need to miss out on the
best dividend stock
selection especially
given the market is expected to remain volatile in the near
term.
Keeping these factors in mind, we
take a look at three Canadian dividend-paying giants that should be
on your radar today.
Enbridge is a popular Canadian stock
One of Canada’s largest
companies, Enbridge (NYSE: ENB)
also pays investors a tasty forward yield of 6.7%. Valued at a
market cap of $80 billion, Enbridge has increased dividends for 25
consecutive years. In the last five years, dividends have increased
at an annual rate of 11.74% compared to revenue growth of less than
3%.
In the second quarter of 2021,
Enbridge reported adjusted earnings of $1.4 billion, up from $1.1
billion in the year-ago period. The energy heavyweight reaffirmed
its EBITDA guidance range for 2021 that is forecast between $13.9
billion and $14.3 billion. At the midpoint estimate, this
represents a growth of 6% year over year.
The company’s gas operations are
regulated allowing it to generate stable earnings across business
cycles. Further, its liquids pipelines connect Canada’s oil sands
to several refineries that are located on the Gulf Coast. The
demand for pipelines remains robust enabling Enbridge to reserve
these requirements at appealing rates.
We can see how Enbridge’s
earnings stability has allowed the company to increase dividends
across business cycles.
Brookfield Renewable Partners is among the best
Canadian dividend stocks
One Canadian stock that has
crushed the broader markets in the last two decades, is Brookfield
Renewable Partners (NYSE:
BEP). It is one of the largest renewable energy
companies in the world and has managed to expand its revenue and
earnings by acquiring and developing quality clean energy
cash-generating assets.
In the last 10 years, Brookfield
has increased its funds from operations at an annual rate of 10%
while its dividends have grown by 6% annually in this period.
Brookfield Renewable stock currently provides investors with a
yield of 3% and has returned over 15% to investors annually since
2000.
The shift towards clean energy
solutions is all set to accelerate in the upcoming decades which
suggests Brookfield can easily leverage its leadership position in
this sector making it a top bet for 2021 and beyond.
Brookfield explains its existing
assets can support annual FFO increases between 3% and 6% through
2025. The company ended Q2 with 31 gigawatts in development which
is higher than its current operating portfolio that stands at 21
gigawatts.
Algonquin Power & Utilities
The final Canadian
dividend-paying stock on my list is Algonquin Power & Utilities
(NYSE:
AQN), a company that has increased its dividends at
an annual rate of 36.5% in the last five years. Comparatively, its
revenue and earnings grew by 11% and 19% respectively in this
period.
AQN has increased its customer
base from 120,000 in 2013 to 800,000 in 2021. It generates
two-thirds of its cash flows from utilities and the rest from
renewable energy. Algonquin expects to spend $9.2 billion in
capital expenditure over the next three years which will help it
support dividend increases moving forward. Since its IPO in October
2009, AQN stock has returned 450% to investors.
Algonquin Power (NYSE:AQN)
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