The high inflation, tight monetary policy, and economic uncertainty could continue to pose challenges for equity investors. However, an investment in top dividend-paying stocks could help investors earn steady cash, regardless of the market conditions.
Thankfully, the TSX has several top companies consistently paying dividends for years. In addition, few offer a lucrative yield of at least 5%. But before discussing stocks, let’s be clear that dividends are not guaranteed.
Against this background, let’s zoom in on three Canadian stocks that offer at least a 5% yield.
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NorthWest Healthcare Properties REIT
NorthWest Healthcare (TSX:NWH.UN) is a real estate investment trust with a high-quality portfolio of international healthcare real estate infrastructure. Its geographically diversified defensive portfolio helps it to enhance its shareholders’ value through monthly dividend payouts.
NorthWest’s high-quality tenants are backed by government support. In addition, its leases are of long-term (weighted average lease expiry term of about 14 years). Further, NorthWest’s majority of rents have protection against inflation, while its portfolio has a high occupancy rate of 97%.
Given these strong metrics, NorthWest is poised to return substantial cash to its shareholders. Based on its closing price of $9.76 on February 24, NorthWest Healthcare offers a lucrative yield of 8.2%.
Enbridge
Enbridge (TSX:ENB) is a dependable large-cap stock to earn a high and steady yield. It operates as an energy infrastructure company transporting oil and natural gas. The solid demand for its assets, diversified revenue stream, and high asset utilization position it well to enhance its shareholders’ returns through higher dividend payments.
It’s worth highlighting that Enbridge has paid a dividend for 68 years and increased it for 28 consecutive years. Enbridge even paid and raised its dividend during the pandemic, when several energy companies lowered their payouts due to reduced demand.
Enbridge has over 40 diverse revenue streams, while its payouts are well covered through resilient distributable cash flow (DCF). The company is poised to benefit from growing energy demand due to its continued investments in conventional and renewable energy assets. Furthermore, its solid secured projects and revenue escalators augur well for growth. By investing in Enbridge stock near the current levels, investors can earn a reliable dividend yield of 6.9%. Moreover, its target payout ratio of 60-70% of DCF appears well covered and sustainable in the long term.
Scotiabank
Canadian bank stocks are a reliable bet to earn a steady income. Notably, top Canadian banks have paid dividends for over 100 years. Within the banking space, Scotiabank (TSX:BNS) is an attractive dividend stock. Scotiabank has been paying a regular dividend since 1833. Further, it has increased its dividend at an average annualized growth rate of 6% since 2011.
What stands out is that Scotiabank stock offers a dividend yield of 5.8% based on its closing price of $71.34 on February 24.
Scotiabank’s dividend payouts are supported by its growing earnings base. The financial services giant’s exposure to high-growth banking markets, diversified sources of revenue, and operating efficiency cushion its bottom line and dividend payouts. Also, its solid credit quality and strong balance sheet bode well for future dividend growth.
