The Safest High-Yielding Dividend Stocks on the TSX Right Now

With the TSX Index hitting all-time highs, high-yielding stocks are harder to find. Here are three of the safest dividends you can buy today.

The S&P/TSX Composite Index has a plentiful array of great dividend stocks. Canadian investors love their predictable dividend income streams! Who can blame them? When GICs are earning a negative yield after inflation, who doesn’t enjoy tax-efficient monthly or quarterly dividend cheques?

Yet yields on the TSX are compressing. Global investors are starting to warm up to Canada’s cash-yielding energy, financial, materials, and real estate sectors. Many bond investors have no choice but to look to higher-yielding, risk-on equity assets.

As a result, I believe Canada’s top dividend stocks will continue to rise in value and their yields will compress. If you want to lock in some of the highest and safest dividends on the TSX today, here are three stocks that look attractive today.

Pembina Pipeline: A top TSX pipeline stock

You could say Pembina Pipeline (TSX:PPL)(NYSE:PBA) is in the right place at the right time. This TSX stock operates Canada’s third-largest pipeline network and a broad range of energy midstream and infrastructure assets. With a yield of 6.2%, next to Enbridge, it has one of the highest dividends among the top TSX 60.

While this company was punished during the pandemic, it never dropped its dividend, like many commentators expected. In fact, in 2020, Pembina still earned recorded adjusted EBITDA and reached pre-pandemic guidance metrics.

94% of Pembina’s cash flows are supported by fee-based contracts, of which 77% are take or pay. This TSX stock has a 72% payout ratio, meaning its dividend is very well covered.

In 2021, Pembina is going to massively benefit from strong energy pricing and higher energy volumes through its transportation systems. Likewise, it has further growth catalysts through a large development pipeline and a number of interesting acquisitions (like Inter Pipeline, potentially the Trans Mountain pipeline, and LNG projects in British Columbia).

BCE: A TSX telecom stock with steady upside

BCE (TSX:BCE)(NYSE:BCE) pays out the highest dividend among its telecom peers. It has an attractive 5.77% dividend right now. While this TSX stock has somewhat lagged its peers, it could be heading for a turnaround.

With COVID-19 restrictions waning, Canada is starting to reopen. That means BCE’s sports, media, and entertainment assets should enjoy a rebound and meaningfully contribute to earnings again. Not to forget, BCE owns Canada’s largest cellular and broadband network. Consequently, it has a strong advantage in aggressively rolling out 5G services.

Since 2008, BCE has grown its dividend by 140%! It increased its dividend by 5% last year. This TSX stock targets a very safe annual payout of 65-75% of free cash flow. As it steadily grows its business, investors should continue to enjoy dividend growth at around a factor of two times inflation.

Northwest Healthcare Properties REIT

The last high-yielding TSX stock is Northwest Healthcare Properties REIT (TSX:NWH.UN). Today, it pays a cushy 6.2% distribution. It is one of the largest owners of healthcare properties (like medical centres and hospital buildings) in the world. Its portfolio of properties are incredibly stable cash generators. It has 97% occupancy, and its weighted average lease term is 14 years. Likewise, over 70% of its leases have inflation-indexed rents.

The REIT’s distribution has a fairly high 97% adjusted funds from operation payout ratio. However, this stock is working to roll out a growing joint venture and asset management business. That should enable it accrete some decent cash flow growth over the remainder of 2021 and beyond.

In addition, the REIT has an attractive pipeline of development projects and acquisition opportunities. Enjoy a nice steady distribution, while this REIT continues to expand its global healthcare-focused real estate empire.

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 Robin Brown owns shares in Pembina Pipeline Corporation and Enbridge. 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

investment research
Dividend Stocks

Best Stock to Buy Right Now: TD Bank vs Manulife Financial?

TD and Manulife can both be interesting stock picks for today, depending on your investment style.

Read more »

A worker gives a business presentation.
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

These stocks are out of favour but could deliver nice returns over the coming years.

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 5.5 Percent Dividend Stock Pays Cash Every Month

This defensive retail REIT could be your ticket to high monthly income.

Read more »

Confused person shrugging
Dividend Stocks

Passive Income: How Much Do You Need to Invest to Make $600 Per Month?

Do you want passive income coming in every single month? Here's how to make it and a top dividend ETF…

Read more »

Canadian Dollars bills
Dividend Stocks

3 Monthly-Paying Dividend Stocks to Boost Your Passive Income

Given their healthy cash flows and high yields, these three monthly-paying dividend stocks could boost your passive income.

Read more »

Make a choice, path to success, sign
Dividend Stocks

The TFSA Blueprint to Generate $3,695.48 in Yearly Passive Income

The blueprint to generate yearly passive income in a TFSA is to maximize the contribution limits.

Read more »

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »