The 3 Best Canadian Dividend Stocks to Buy in June 2021

Yield is an important metric, as it shows how much payout a shareholder would receive relative to its stock price. Here are three top Canadian dividend stocks.

| More on:

Income-seeking investors generally focus more on dividend amounts. But dividend yield is a more important metric, as it shows how much payout a shareholder would receive relative to its stock price. Here are three top Canadian dividend stocks for June 2021.

Enbridge

Enbridge (TSX:ENB)(NYSE:ENB) is one of the biggest top-yielding stocks on the TSX. Its 7.2% yield indicates a significant premium relative to what we get on deposits. Now, you would argue that Enbridge is a risky bet compared to deposits. Certainly, but it’s not as risky as oil-producing energy companies.

Enbridge is a pipeline company and generates a large portion of its revenues from stable, long-term contract fees. Even when oil and gas prices fluctuate, that doesn’t substantially impact the company’s earnings. And that’s why Enbridge has managed to raise its shareholder payouts for the last 26 consecutive years.

Notably, it will likely keep on rising dividends consistently for the future as well. Its unmatched pipeline network and creditworthy counterparties underline a low-risk proposition for investors. Although ENB stock lags broader markets in shorter period, it outperforms in terms of total returns in the long term.

BCE

Canada’s telecom industry is going through a paradigm shift as it approaches the 5G revolution. Telecom giants are actively betting on inorganic growth, while some are spending billions on network improvements. BCE (TSX:BCE)(NYSE:BCE) belongs to the latter camp.

BCE intends to invest approximately $4 billion in capital projects annually for the next two years. It plans to provide 5G coverage to approximately 70% of the Canadian population in 2021 under its biggest capital spending plan so far. The company will likely begin reaping the benefits with accelerated earnings growth once 5G normalizes in the next couple of years.

Telecom stocks are low-risk bets and act as classic defensives in uncertain markets. BCE stock currently yields 5.7%, way higher than TSX stocks at large. It has a long dividend-payment history, which indicates reliability and stability. Like Enbridge, BCE too offers an attractive investment proposition for long-term investors.

AltaGas

AltaGas (TSX:ALA) is approximately a $7 billion energy midstream and utility company. It operates natural gas and liquids transmission and storage facilities while its utility operations take care of natural gas distribution. The company’s low-risk operations facilitate stable earnings in almost all economic scenarios. This facilitates stable and predictable dividends for investors.

Note that, natural gas utilities grow relatively at a faster rate than electric utilities. AltaGas generates 57% of its revenues from utilities, while the rest comes from midstream. It plans to invest $910 million in capital projects, which will likely drive its earnings growth. AltaGas’s earnings might not remarkably boost on economic recovery, but higher natural gas prices could bode well for it in the next few quarters.

AltaGas stock currently yields 4% — marginally higher than TSX stocks at large. It pays monthly dividends. If you invest $10,000 in AltaGas stock, you will get around $33.3 per month in dividends. The dividend amount will increase every year, as the company grows its profits.

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 Vineet Kulkarni has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends ALTAGAS LTD.

More on Energy Stocks

man touches brain to show a good idea
Energy Stocks

1 No-Brainer Energy Stock to Buy With $500 Right Now

Should you buy a cyclical energy stock at its decade-high? Probably not. But read this before you make a decision.

Read more »

A solar cell panel generates power in a country mountain landscape.
Energy Stocks

Top Canadian Renewable Energy Stocks to Buy Now

Here are two top renewable energy stocks long-term investors can put in their portfolios and forget about for a decade…

Read more »

oil and gas pipeline
Energy Stocks

Where Will Enbridge Stock Be in 3 Years?

After 29 straight years of increasing its dividend and a current yield of 6%, here's why Enbridge is one of…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

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

Enbridge stock just hit a multi-year high.

Read more »

oil pump jack under night sky
Energy Stocks

Where Will CNQ Stock Be in 3 Years?

Here’s why CNQ stock could continue to outperform the broader market by a huge margin over the next three years.

Read more »

engineer at wind farm
Energy Stocks

Invest $20,000 in This Dividend Stock for $100 in Monthly Passive Income

This dividend stock has it all – a strong outlook, monthly income, and even more to consider buying today.

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

Is Imperial Oil Stock a Buy, Sell, or Hold for 2025?

Valued at a market cap of $55 billion, Imperial Oil pays shareholders a growing dividend yield of 2.4%. Is the…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

Where Will Imperial Oil Stock Be in 1 Year?

Imperial Oil is a TSX energy stock that has delivered market-thumping returns to shareholders over the last two decades.

Read more »