4 High-Yield Canadian Stocks to Buy Right Now

These dividend-paying TSX stocks are yielding over 6% and have resilient cash flows to support future payouts.

Investors eyeing higher and secure yields amid a lower interest rate environment could consider buying stocks of Enbridge (TSX:ENB)(NYSE:ENB), Pembina Pipeline (TSX:PPL)(NYSE:PBA), TC Energy (TSX:TRP)(NYSE:TRP), and NorthWest Healthcare Properties REIT (TSX:NWH.UN). 

These Canadian companies offer high yields and generate resilient cash flows, implying that their yields and future payouts are safe. 

Enbridge

Enbridge stock is yielding about 7.6% at the current price levels, which is very safe. Its more than 40 diversified cash flow streams, cost and productivity improvements, and incremental EBITDA from the secured projects are likely to drive its earnings and cash flows and support its higher dividend payments

It has raised its dividends for 26 years in a row and could continue to hike it further in the future, thanks to the strength in its core business and recovery in mainline volumes. Enbridge projects its DCF (distributable cash flow) per share to increase by 5-7% over the next three years, implying that its dividends could rise at a similar pace. 

Pembina Pipeline

Energy infrastructure giant Pembina Pipeline has consistently maintained and raised its dividend for more than two decades. Meanwhile, its dividends have grown at an average annual rate of 4% in the last 10 years. Pembina’s robust dividend payments are supported through its fee-based cash flow, which continues to grow at a healthy pace.

The company owns highly diversified and contracted assets that generate strong fee-based cash flows. Meanwhile, its payout ratio is sustainable in the long run. The company projects high volumes and pricing and growing backlogs to support its adjusted EBITDA growth in 2021. Meanwhile, contractual arrangements and new projects are expected to support its future cash flows. Pembina pays monthly dividends and is yielding about 7.3%. 

TC Energy

TC Energy’s regulated and contracted assets generate high-quality earnings and cash flows that drive its dividend payments. Its dividends increased at a CAGR (compound annual growth rate) of 7% in the last 21 years. Meanwhile, TC Energy projects 5-7% growth in its dividends in the future. 

TC Energy derives about 95% of its adjusted EBITDA from assets that are regulated or have long-term contracts, implying that its earnings and cash flows could continue to increase at a decent pace in the coming years. Further, with more than $8 billion worth of projects under development and organic growth opportunities, TC Energy could continue to boost its shareholders’ returns through higher dividend payments. The company pays a quarterly dividend of $0.87 a share, reflecting a yield of 6.1%.

NorthWest Healthcare Properties

NorthWest Healthcare Properties’s low-risk and diversified healthcare real estate portfolio positions it well to consistently boost its shareholders’ returns through regular dividend payments. Its occupancy rate remains high, while the majority of its tenants are backed by governments. 

Its long lease expiry term of 14.5 years reduces vacancy risk and adds visibility over the future cash flows. Further, about two-thirds of its rents are inflation-indexed, which lowers price risk. Its focus on deleveraging its balance sheet, accretive acquisitions, and geographic expansion bode well for growth. Like Pembina, it pays monthly dividends and offers an annual yield of 6.1%. 

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS and PEMBINA PIPELINE CORPORATION.

More on Dividend Stocks

A man smiles while playing a video game.
Tech Stocks

A Few Years From Now, You’ll Wish You Bought This Undervalued Stock

A dividend-paying but undervalued tech stock is a buying opportunity for both income and growth investors.

Read more »

a sign flashes global stock data
Dividend Stocks

3 Reasons to Buy TMX Group Stock Like There’s No Tomorrow

TMX Group (TSX:X) is Canada's biggest stock exchange owner.

Read more »

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Canadian National Railway Stock is on Sale: Why Now is the Time to Invest

CNR stock has long been a top stock, with a solid position in a railway duopoly. But right now is…

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

This 7.9% Dividend Stock Pays Cash Every Month

We all want dividends, and having them come out monthly is ideal! But this might be a strong choice for…

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

Is Northland Power Stock a Buy for its 6% Dividend Yield

Northland Power stock is cheap and ready to move higher as major projects near completion. In the meantime, we have…

Read more »

space ship model takes off
Dividend Stocks

3 Top Canadian Stocks That Just Increased Their Dividends (Again)!

These three top Canadian stocks just increased their dividend. No surprise since they have a great record of growing earnings…

Read more »

Canadian flag
Dividend Stocks

This Canadian Dividend Stock Pays at 11.2%

A high dividend yield is awesome, sure, but is this dividend stock still a great buy with that 11.2% yield,…

Read more »

Hand Protecting Senior Couple
Dividend Stocks

3 Blue-Chip Stocks So Safe Canadians Can Hold Them Until They Die

Canadian National Railway (TSX:CNR) is a stock worth owning for life.

Read more »