3 High-Yield Dividend Stocks to Buy in 2020

If you’re looking for high dividend income in 2020, consider Enbridge Inc (TSX:ENB)(NYSE:ENB) stock

The New Year is upon us, and what better time to go shopping for stocks?

It’s a Holiday tradition to go bargain hunting after Christmas, and while the TSX as a whole is fairly expensive right now, there are still plenty of boxing week sales to be found.

Also, many of the stocks currently on sale have high yields and rising payouts that can reward you handsomely in the years ahead.

With that in mind, here are three of the best high-yield dividend stocks to buy in 2020.

Enbridge

Enbridge Inc (TSX:ENB)(NYSE:ENB) is Canada’s biggest and best pipeline company, shipping crude oil and LNG all over North America.

The stock sports a whopping yield of 6.24% as of this writing, and management has been raising the dividend by 17% a year on average. This year the dividend was increased 10%.

Over the last four years, Enbridge has increased its net income from $250 million to $2.8 billion. That’s a fantastic growth rate, and it looks set to continue.

Not only did ENB crank out $3.1 billion in adjusted EBITDA in its most recent quarter, but it also has two big infrastructure projects in the works (the Line III replacement and Line V tunnel) that could drive higher earnings.

Fortis

Fortis Inc (TSX:FTS)(NYSE:FTS) is one of Canada’s oldest and largest publicly traded utilities. With $53 billion in assets and 3.3 million customers, it’s a true utility giant.

FTS is well known as one of Canada’s most dependable dividend stocks. It has a 3.5% yield today and has raised its dividend every single year for 46 years.

Over the next five years, Fortis will be undertaking a capital expenditure program aimed at increasing its rate base. The program will cost $18.3 billion and will replace aging infrastructure and increase service area.

The program should increase revenue, but will also increase the amount of debt on Fortis’ already heavily leveraged balance sheet.

Algonquin Power & Utilities

Algonquin Power & Utilities Corp (TSX:AQN)(NYSE:AQN) is another Canadian utility company. Compared to Fortis, it’s a smaller player, but has enjoyed far better returns over the past 10 years.

Since December 31, 2009, AQN shares have risen 355%. That’s a phenomenal return for a utility stock, as utilities are generally considered to be “slow and steady” dividend plays that deliver about market-average returns.

With that said, Algonquin’s capital gains have not come at the expense of income. Even with its 355% 10-year return, AQN still yields 4%, and management has been raising the dividend over the years.

This makes the stock a solid dividend play that could also deliver some capital gains if the company keeps growing.

As for whether Algonquin will keep growing, that remains to be seen. One encouraging fact about the company is that it has major investments in renewable energy, which position it well for the decade ahead, with its likely increase in climate change-related regulations.

Such regulations will be hard on utility companies that burn coal, but should leave wind, solar and hydro producers (like Algonquin) relatively unscathed.

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 Andrew Button has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge. Enbridge is a recommendation of Stock Advisor Canada.

More on Dividend Stocks

senior relaxes in hammock with e-book
Dividend Stocks

Top Canadian Stocks to Buy for Passive Income

Want to generate a juicy passive income that can last for decades? Here are three stocks every investor needs to…

Read more »

exchange traded funds
Dividend Stocks

1 Top High-Yield Dividend ETF to Buy to Generate Passive Income

An ETF designed as a long-term foundational holding pays generous monthly dividends.

Read more »

Canadian Dollars bills
Dividend Stocks

Invest $10,000 in This Dividend Stock for $2,430.12 in Passive Income

This dividend stock has proven time and again it's a safe, reliable stock that still has the power to explode…

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

3 Canadian Dividend Stocks to Consider Adding to Your TFSA in 2025

If you're looking for long-term, undervalued dividend stocks to pick up in your TFSA, consider these first.

Read more »

Canadian dollars are printed
Dividend Stocks

Build a Cash-Gushing Passive-Income Portfolio With Just $25,000

An investment of $25,000 in these high-yield Canadian dividend stocks can help you earn $1,955 in tax-free passive income.

Read more »

dividends grow over time
Dividend Stocks

These Are the Top 4 Undervalued Stocks to Buy Right Now

These four undervalued stocks offer a change to get in on great value long term, with promising futures ahead.

Read more »

stock research, analyze data
Dividend Stocks

Where Will Canadian Tire Stock Be in 5 Years?

With Canadian Tire stock still trading roughly 20% off its all-time high, is it one of the best investments you…

Read more »

a man relaxes with his feet on a pile of books
Dividend Stocks

1 Superb Canadian Dividend Stock Down 17% to Buy in Bulk

This dividend stock is a standout option.

Read more »