3 Top Dividend-Growth Stocks Yielding up to 5.5% to Build Your Portfolio Around

TransCanada Corporation (TSX:TRP)(NYSE:TRP) and these two other dividend stocks are great options if you’re looking for growing payouts.

| More on:

If you’re looking to pad your portfolio with some cash, dividend stocks are a great way to do so. Not only are these investments great for the long term, but in the short term, dividends can help pad your returns, especially when markets are bullish. For that reason, I’m going to focus on three great dividend stocks that are great buys and pay as much as 5.5% per year to shareholders.

TransCanada Corporation (TSX:TRP)(NYSE:TRP) is one stock that will benefit from rising oil prices, particularly as the industry continues its recovery. Year to date, TransCanada’s stock has declined 10%, and at a price-to-earnings multiple of just 16, and the shares trading at a little more than twice their book value, it’s an attractive valuation for one of the top stocks on the TSX.

With the go ahead for the Keystone XL in place, TransCanada could be very busy in the years to come, and that’s never a bad sign for investors.

Although it may be concerning that the stock hasn’t seen any momentum recently, the decline has pushed its dividend yield up to 5%, making it a very good dividend stock to own, especially since it has grown over the years. Since 2013, payouts have grown by 50%, averaging a compounded annual growth rate (CAGR) of 8.4% during that time.

Despite being significantly impacted by oil and gas, TransCanada is one of the best stocks that you can own on the TSX.

Telus Corporation (TSX:T)(NYSE:TU) is another well-known brand in Canada, and its strong position in the telecom industry makes it a very appealing long-term buy. Unless the CRTC were to open the industry to foreign competition, which at this point seems very unlikely given its focus on protecting Canadian companies and content, then Telus is going to remain very safe in its position as a market leader for many years.

The company has grown steadily over the years with sales rising 16% since 2013. And while that may not get growth investors very excited about those results, it’s a good sign for a company that’s in a very competitive and mature industry, where it’s becoming a challenge to find new ways to grow.

Currently, Telus pays investors a dividend of 4.6% per year, which has grown by 54% in five years, averaging a CAGR of just over 9%.

Emera Inc. (TSX:EMA) will provide your portfolio with a third industry to invest in, which also might be the safest. The utility stock may not be a high-profile one, but its results are nothing to ignore.

In just four years, the company’s sales have nearly tripled, growing from $2.2 billion to $6.2 billion. With a lot of diversification in its services and the geographical areas that it serves, there’s still a lot more growth that the company can achieve in the years to come.

Emera also pays investors an attractive yield of 5.5%, which is highest on this list. It too has grown its payouts, and with dividends increasing 61% and averaging a CAGR of 10%, it has hiked its payouts more than Telus and TransCanada have. Emera may be a lesser-known stock, but that certainly doesn’t make it any worse of an investment.

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

Fool contributor David Jagielski has no position in any of the stocks mentioned.

More on Dividend Stocks

open vault at bank
Dividend Stocks

Don’t Get Cute; Just Buy Stability: Top Defensive TSX Stocks to Buy Now

A healthy risk tolerance is essential for most investors, but many stray from the tried and tested, hoping to find…

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

TFSA Investors: Buy These 3 Stocks for $3,480 Yearly Tax-Free Income

One significant benefit of a TFSA-based dividend income is that it doesn’t weigh down your tax bill.

Read more »

Canadian dollars in a magnifying glass
Dividend Stocks

3 High-Yield Dividend Stocks That Are Screaming Buys Right Now

Are you looking for great income stocks? Here's a trio of high-yield dividend stocks that pay insane yields right now.

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

Transform a $5,000 TFSA Into a $50,000 Retirement Nest Egg

The TFSA is a powerful tool that can grow a small investment into a substantial retirement nest egg over time.

Read more »

A meter measures energy use.
Dividend Stocks

Is Fortis Stock a Buy, Sell, or Hold for 2025?

Fortis has increased its dividend annually for the past five decades.

Read more »

analyze data
Dividend Stocks

3 Dividend Stocks That Are Screaming Buys in November

Here are three top dividend stocks long-term investors won't want to ignore during this part of the market cycle.

Read more »

senior relaxes in hammock with e-book
Dividend Stocks

Generate $175/Month in Passive Income With a $30,000 Investment

Dividend aristocrats offer reliability, and many of them also offer generous yields. With sizable enough discounts, these yields can become…

Read more »

dividends can compound over time
Dividend Stocks

Best Dividend Stocks to Buy Now for Canadian Investors

These three stocks would be excellent additions to your portfolios, given their solid underlying businesses, consistent dividend growth, and healthy…

Read more »