3 Blue Chip Dividend Aristocrats With Yields as High as 7%

Top dividend stocks like Enbridge have elevated yields yet their businesses are thriving – herein lies the opportunity.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In the world of high-yield stocks, elevated dividend yields often come at a price – elevated risk. This means that we have to accept that the yield may not be so high for long and/or that we may incur capital losses.

But this is not always the case. Consider, for example, the following dividend aristocrats that are yielding as high as 7% today. In fact, these stocks all have a few of the best things in common – a stellar record of dividend growth, strong cash flows, and financial strength.

BCE: A telecom giant yielding 6.32%

BCE Inc. (TSX:BCE) is Canada’s leading telecom giant, boasting unmatched broadband and fibre optic networks. It’s also a leader in financial strength and shareholder value creation. In fact, BCE has decades of strong cash flow growth and shareholder value creation behind its belt. For example, over the last five years, BCE’s annual cash from operations has grown 12.6% to $8.3 billion.

Created with Highcharts 11.4.3Bce PriceZoom1M3M6MYTD1Y5Y10YALL7 Apr 20204 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '2520212021202220222023202320242024202520252030405060www.fool.ca

Also, BCE’s dividend has grown at a compound annual growth rate (CAGR) of 5.5% since 2000. This is admittedly typical of a dividend aristocrat, but that doesn’t make it any less impressive. BCE has been able to achieve this by being the leader in an industry that has high barriers to entry, and executing with operational and financial excellence.

Today, BCE stock is yielding 6.32%. In my opinion, BCE stock is being mispriced as the market is consumed with fear and risk. Thus, this dividend aristocrat won’t be offering this juicy yield for long, as I expect BCE stock to rise.

Enbridge stock: Opportunity knocks

Enbridge Inc. (TSX:ENB) is another dividend aristocrat that, in my opinion, is being mispriced. Hence, its juicy 6.85% yield. Enbridge is one of Canada’s essential energy infrastructure companies with a vast North American presence. The company has a long history of being a vital part of the North American economy as well as a solid investment for its shareholders.

Created with Highcharts 11.4.3Enbridge PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Enbridge stock has stood the test of time, as it benefits from a business model that protects it from inflation and the ups and downs of commodity prices. This, in turn, has allowed Enbridge to provide its shareholders with reliable, predictable, and growing dividend income. In fact, Enbridge’s dividend has grown at a CAGR of 11.1% in the last 22 years. It’s quite impressive, and BCE’s dividend growth rate kind of pales in comparison. Yet, it’s a reflection of Enbridge’s place in the North American economy as well as its value.

Despite Enbridge’s predictable business providing predictable and fast-growing cash flows, investors are skeptical. They see that the transition away from oil and gas is beginning, and they are understandably nervous about companies like Enbridge. Thus, we have Enbridge stock yielding 6.85% today.

In my view, this is a once-in-a-lifetime opportunity to buy into this strong business. I mean, Enbridge controls over 70% of Canada’s take-away oil capacity and it’s heavily relied upon by U.S. refineries. A transition is happening but it won’t happened overnight. In any case, Enbridge has been preparing it for quite some time now. And given its financial strength, its connections, and infrastructure, Enbridge can be a full participant in this transition.

TC Energy: The ultimate dividend aristocrat

Last but not least, TC Energy Inc. (TSX:TRP)) is another one of Canada’s energy infrastructure giants. Its assets consist of more than 92,600 kilometres of natural gas pipelines, 4,900 kilometres of oil pipelines, 653 billion cubic feet of gas storage, and 6.600 megawatts of power generation.

Created with Highcharts 11.4.3Tc Energy PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

TC Energy is currently plagued by cost overruns at its Coastal GasLink project. This is not a small issue and cost overruns could ultimately come in north of $1 billion. However, as long-term investors, we have every reason to look beyond this. Because demand is booming and TC Energy is seeing record flows.

This all came together last quarter with a 10% increase in both earnings and EBITDA. TC Energy’s management has been using a lot of this cash flow to reduce debt, but also to continue to invest in the many projects available in this “opportunity-rich” environment.

TC Energy is currently yielding 7.06%. Its dividends have grown at a CAGR of 7.24% over the last 22 years.

Should you invest $1,000 in Telus right now?

Before you buy stock in Telus, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Telus wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 Karen Thomas has a position in BCE, Enbridge, and TC Energy. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

The Best Canadian Stocks to Buy Right Away With $30,000

If you have $30,000 you're willing to invest, these are some of the first Canadian stocks to consider on your…

Read more »

rail train
Dividend Stocks

What to Know About Canadian Pacific Railway Stock for 2025

CP stock has now gone through a major merger, so what do investors have to look forward to?

Read more »

ways to boost income
Dividend Stocks

Top Canadian Value Stocks I’d Buy for Dividend Growth and Appreciation

If you are looking for income and capital appreciation, here are three Canadian value stocks for a great total return…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Canadian Stock to Buy With $2,000 Right Now

The company’s powerful combination of growth, income, and value, positions it well to deliver solid returns, making it a smart…

Read more »

Transparent umbrella under heavy rain against water drops splash background. Rainy weather concept.
Dividend Stocks

This 10.6 Percent Dividend Stock Pays Cash Every Single Month

Are you looking to invest for a rainy day? This 10.6% dividend stock pays cash every month, irrespective of the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Market Dip: Opportunity or Risk This April?

This market dip might have investors worried, but should they be excited instead?

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Why I’d Add This Top TSX Dividend Stock to My TFSA During the Current Dip

The market is full of volatility right now. Fortunately, this top TSX dividend trades at a discount and pays a…

Read more »