Dividends are a solid source of passive income. Investors can rely on shares of fundamentally strong companies to start a worry-free passive income stream.
Thankfully, the TSX has several dividend-paying companies that have consistently paid and increased their dividends irrespective of market conditions. Further, these companies have resilient business models and a growing earnings stream, which implies that their payouts are well-covered, making them reliable income stocks.
Against this backdrop, let’s look at two Canadian stocks with solid financials, stellar dividend payments, and a growth history. Moreover, these companies have a well-covered payout ratio, and their management remains committed to enhancing their shareholders’ returns.
Against this backdrop, investing $10,000 in these two Canadian dividend stocks can help you earn over $606/year. Let’s delve deeper.
Enbridge
Investors seeking to generate passive income through stocks could rely on Enbridge (TSX:ENB). The company transports oil and gas and is popular for its solid dividend payment history. This energy company has uninterruptedly paid dividends for over 69 years. Moreover, the energy infrastructure company raised its dividend for 29 years at a compound annualized growth rate (CAGR) of 10%. Besides its stellar payouts, Enbridge stock offers a high and well-protected yield of 7.7% (based on the closing price of $47.50 on June 21).
The company’s payment history shows its commitment to rewarding its shareholders with higher dividends in all market conditions. Enbridge’s resilient business model, highly diversified revenue streams, growing earnings base, and ability to generate solid distributable cash flows (DCFs) drive its dividend payments.
Enbridge’s high-quality infrastructure assets and investments in renewable and conventional energy sources will help the company capitalize on the growing energy demand. Further, the company’s high asset utilization rate, long-term contracts, power-purchase agreements, and multi-billion-dollar secured capital projects help drive its DCF per share and dividend payments.
Enbridge’s leadership expects its earnings and DCF to increase at a mid-single-digit rate in the long term. This will enable the company to grow its annual dividend at a similar pace in future years. Moreover, Enbridge maintains a target payout ratio of 60 to 70% of DCF, which is sustainable in the long term.
Fortis
Like energy companies, utility sector stocks are famous for offering reliable dividends owing to their regulated asset base, defensive business model, and ability to generate predictable cash flows. Among top utility companies, Canadians could consider investing in Fortis (TSX:FTS) for its resilient payouts. Fortis boasts an uninterrupted dividend growth history of over 50 years. Moreover, it provides an attractive yield of about 4.5% near the current levels.
Fortis’ dividend payments are backed by its defensive business model, growing rate base, and predictable cash flows. Moreover, as Fortis generates all of its earnings from regulated utility businesses, its quarterly payouts are well-covered and can be relied upon.
Fortis focuses on growing its rate base through continued investment in regulated utility assets. This could help drive its future earnings and dividend payments. For instance, the utility company plans to grow its rate base by about 6.3% annually through 2028. It will enable Fortis to enhance shareholders’ returns through higher dividend payments. Fortis predicts its dividend to increase by 4 to 6% annually during the same period.
Fortis’s low-risk business, growing rate base, stellar track record of dividend payments, and visibility over future payouts make it a worry-free stock for generating passive income.
Bottom line
Both Enbridge and Fortis stocks are dependable investments for earning worry-free passive income. The table shows that an investment of $5,000 in each stock can help you earn over $151.54 every quarter, or about $606/year.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
