This Top Dividend Stock Offers a Crazy 8% Yield!

Investors looking for a highly rated investment that can offer both growth and income-earning capabilities should consider this top dividend stock today.

Inter Pipeline (TSX:IPL) is one of those stocks that investors tend to bypass in lieu of other, larger, and more well-known energy infrastructure investments. That’s actually a shame as Inter Pipeline offers investors plenty in terms of long-term growth and income-earning potential.

Here’s a look at a few reasons why Inter Pipeline is such a compelling investment option.

Lucrative business 

Inter Pipeline is an energy infrastructure company. The company has four segments that are broadly grouped into conventional pipelines, oil sands transportation, NGL processing, and bulk liquids storage.

Each of those segments are well diversified and deserving of a quick overview. The oil sands transportation segment represents over 3,300 km of pipeline and 3.8 million barrels of storage capacity. In the most recent quarter, the segment earned $520.4 million.

The conventional oil pipeline business, which includes 3,900 km of pipeline and 1.3 million barrels of storage capacity, contributed $146.2 million in earnings in the most recent quarter. Inter Pipeline’s NGL processing unit, which has a production capacity of over 240,000 barrels per day, realized earnings of $137.5 million in the most recent quarter. The bulk liquids storage unit, which consists of 23 storage terminals across Europe, saw earnings of $6.5 million.

While each unit generates earnings for the company, it’s worth noting that each segment is diverse from the other — something that few peers can match. Adding to that appeal is the fact that the two pipeline segments are, in many ways, passive-income generators for the company, often compared with a toll-road network.

Future growth

As impressive as Inter Pipeline sounds, the company also has an emerging new business. The $3.5 billion Heartland Petrochemical Complex is currently under construction and slated to complete within the next year. Once complete, the complex will take locally sourced propane and convert it into a type of plastic used in a variety of manufacturing processes.

The facility will be the first of its kind in Canada, and Inter Pipeline notes that the addition of the complex will generate EBITDA of $400 million on an annual basis.

Strong dividends

What could be better than multiple, solid, recurring-revenue business segments? How about a solid and sustainable dividend that pays out on a monthly cadence! Inter Pipeline’s monthly dividends amazingly remains one of the best-kept secrets on the market. The current yield amounts to an incredible 8.32% yield, which handily puts Inter Pipeline among the best-paying dividend stocks not just within the energy sector but across the entire market.

When should you buy?

As incredible of an investment that Inter Pipeline is, the stock is trading down over 13% so far this year, although much, if not all, of that drop can be attributed to the sell-off we’ve seen in the past two-week period.

Despite the recent pullback, Inter Pipeline remains a solid long-term investment for nearly any portfolio. Prospective investors should view this pullback as an opportunity to buy into a great company at an attractive price.

Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned.

More on Dividend Stocks

A woman stands on an apartment balcony in a city
Dividend Stocks

3 Dirt Cheap Stocks to Buy With $1,000 Right Now

These three Canadian stocks do indeed look dirt cheap to me, as top ways for investors to gain exposure to…

Read more »

House models and one with REIT real estate investment trust.
Dividend Stocks

This 7.6% Dividend Stock Pays Cash Every Month

For under $5 per unit, BTB REIT (TSX:BTB.UN) could add a juicy 7.6% well-covered monthly passive income stream to your…

Read more »

jar with coins and plant
Dividend Stocks

Income Investors: These Canadian Companies Are Raising Their Payouts

Barrick Mining (TSX:ABX) and another dividend grower to keep on your watchlist this Spring.

Read more »

leader pulls ahead of the pack during bike race
Dividend Stocks

1 Unstoppable Dividend Stock to Buy With $400 Right Now

This dividend stock has consistently rewarded shareholders with both stable income and strong capital appreciation.

Read more »

Quality Control Inspectors at Waste Management Facility
Dividend Stocks

The Best Stocks to Invest $10,000 in Right Now

Looking for some resilient blue-chip stocks that should be safe from AI disruption? Check out these lesser-known industrial stocks.

Read more »

dividend stocks bring in passive income so investors can sit back and relax
Dividend Stocks

3 Dividend Stocks Every Canadian Should Own

Canadians should look more closely at these dividend stocks offering a nice blend of stability, global growth exposure, and high…

Read more »

money goes up and down in balance
Dividend Stocks

What to Know About Canadian Value Stocks for 2026

Here's my broad commentary around why Canadian stocks look cheap right now, and a couple top opportunities for investors to…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

How to Structure a TFSA With $14,000 for Lifelong Monthly Income

If you got $14,000 to invest in your TFSA, these four dividend stocks earn you a safe and growing stream…

Read more »