My Top No-Brainer, High-Yield Dividend Stock to Buy in 2024

This Canadian company is an obvious choice for investors looking for dependable, high-yield income stock.

| More on:

Canadian stocks with high yields could be a great choice for investors seeking regular passive income. Moreover, as high yields lead to an increased cash inflow, they can reduce an investment’s payback period.

Fortunately, the TSX has several fundamentally strong companies with reliable payouts. Moreover, a few of these high-quality dividend stocks offer high yields, making them compelling investments that generate steady income.

With this background, here is my top no-brainer, high-yield dividend stock to buy in 2024 for generating dependable passive income for decades.

No-brainer, high-yield stock

Investors seeking high yield for worry-free passive income could consider shares likely BCE, SmartCentres Real Estate Investment Trust, and Enbridge (TSX:ENB). While all these stocks are solid investments for earning high yields, I recommend Enbridge for its proven track record of reliable dividend payments, management’s commitment to enhancing shareholders’ value, visibility over future earnings and distributable cash flows (DCF) growth, and sustainable yield.

For example, Enbridge pays and increases its dividends irrespective of the economic and commodity cycles. It has uninterruptedly paid dividends for over 69 years. Moreover, the energy infrastructure company that transports oil and gas has increased dividends for 29 consecutive years. Furthermore, Enbridge’s dividend grew at a compound annual growth rate of 10% during the same period, the highest among its peers.

While Enbridge has consistently increased its dividends, its payouts are reliable. For instance, this energy company even paid and increased its dividend during the 2008 financial crisis and the COVID-19 pandemic. This shows the resiliency of Enbridge’s dividend payouts and management’s commitment to rewarding its shareholders.

Enbridge’s quarterly dividend stands at $0.915 per share, translating into a high yield of 7.5% based on its closing price of $48.95 on July 15.

While Enbridge is a dependable, high-yield stock, several factors suggest it will continue to increase its dividends in the upcoming years and enhance its shareholders’ value.

Enbridge’s dividend to increase

Enbridge is a leading player in North America’s energy transportation sector. It has extensive energy infrastructure assets strategically positioned between key supply basins and demand markets. This strategic positioning ensures strong utilization of its network, driving its earnings, distributable cash flow (DCF), and dividends.

Furthermore, Enbridge’s highly diversified revenue stream adds stability to its cash flows, mitigating risks associated with market volatility. In addition, Enbridge secures its income through long-term contracts, power-purchase agreements (PPAs), regulated cost-of-service tolling frameworks, and other low-risk commercial arrangements. This framework ensures steady cash flow regardless of market conditions.

Enbridge continues to invest in both conventional and low-carbon energy assets. This positions it well to capitalize on the energy demand. Beyond organic growth, Enbridge will likely benefit from strategic acquisitions, which will enhance its DCF per share and contribute to long-term stability and growth.

Enbridge’s management expects the company’s earnings per share and DCF per share to grow at a mid-single-digit rate in the long term. This indicates that Enbridge could continue to increase its dividend at a similar pace.

Bottom line

Enbridge’s top-tier energy infrastructure network, diverse revenue streams, and resilient earnings and DCF per share suggest that Enbridge will likely enhance its shareholders’ value through higher dividend payments. Moreover, Enbridge targets a payout ratio of 60-70% of DCF, which is sustainable.

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 recommends Enbridge and SmartCentres Real Estate Investment Trust. The Motley Fool has a disclosure policy.

More on Dividend Stocks

dividends can compound over time
Dividend Stocks

Want a 7% Yield? The 3 TSX Stocks to Buy Today

These TSX stocks are offering high yields of over 7%, making them attractive for investors seeking steady passive income.

Read more »

how to save money
Dividend Stocks

The Smartest Dividend Stocks to Buy With $200 Right Now

These smartest dividend stocks can consistently pay and increase their dividends in the coming years, irrespective of the macro uncertainty.

Read more »

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

3 Utility Stocks That Are Smart Buys for Canadians in November

These utility stocks benefit from regulated businesses and generate predictable cash flows that support higher dividend payouts.

Read more »

Start line on the highway
Dividend Stocks

Invest $10,000 in This Dividend Stock for $600 in Passive Income

Do you want to generate passive income? Forget the rental unit! This option will save you the mortgage yet still…

Read more »

Senior uses a laptop computer
Dividend Stocks

1 Reliable Dividend Stock for the Ultimate Retirement Income Stream

TD Bank (TSX:TD) shares are way too cheap with way too swollen a yield for retirees to pass up right…

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

Is Brookfield Infrastructure Partners a Buy for its 4.75% Yield?

Brookfield Infrastructure Partners (BIP) has a 4.75% dividend yield. Is it worth it?

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »