Share prices of some of Canada’s top dividend stocks have retreated, providing investors seeking passive income with an opportunity to earn high yields.
Enbridge (TSX: ENB) is well-known for its extensive oil pipeline business, transporting nearly one-third of Canada and the U.S.’s oil. Despite the shift towards electric vehicles potentially reducing gasoline usage, global demand for oil remains strong, with a rising demand for reliable North American oil. Enbridge also possesses a vast network of natural gas transmission assets and is set to become North America’s largest natural gas utility operator. The company recently acquired three U.S. natural gas utility companies for $14 billion. Many countries view gas-fired power generation as a favorable option with lower emissions compared to burning oil or coal. Enbridge’s stock, currently trading near $48.50, remains attractive with room for potential growth as interest rates decline. Enbridge has increased its dividend each year over the past 29 years. With a current purchase, investors can enjoy a dividend yield of 7.5%.
TC Energy (TSX: TRP) is another leading Canadian energy infrastructure company. It operates 93,000 kilometers of natural gas pipelines and approximately 6.5 trillion cubic feet of natural gas storage capacity across Canada, the U.S., and Mexico. TC Energy also has oil pipelines and plans to separate it as an independent business this year. The company has increased its dividend annually over the past 24 years. With capital investments expected to reach around $8 billion in 2024 and an anticipated range of $6-7 billion in the coming years, there should be sufficient cash flow growth to support ongoing annual dividend increases. At the time of writing, TC Energy’s stock is trading below $52 per share, offering a significant upside potential from its high in 2022 at $74 per share. Investors purchasing at current levels can benefit from a dividend yield of 7.4%.
