Shares of dividend-paying companies can be a compelling investment to start a passive-income stream. However, investors should take caution and consider Canadian stocks with strong financial health, stellar dividend payment and growth history, well-covered payout ratio, and management’s commitment to enhancing shareholders’ returns.
Moreover, one should focus on diversifying the income portfolio. This way, one can generate worry-free dividend income in all market conditions. With this backdrop, let’s delve into two fundamentally strong Canadian dividend stocks that can help you earn over $614/year with a $10K investment.
An energy stock
Investors seeking reliable dividend income stocks could consider Enbridge (TSX:ENB). The company that transports oil and gas is popular for its solid dividend payment history and management’s commitment to returning higher cash to its shareholders. Adding to these positives, Enbridge stock offers a high and well-protected yield.
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For instance, this Dividend Aristocrat has paid dividends for over 69 years and increased it for 29 consecutive years. Meanwhile, this energy company offers a high yield of 7.5%.
Looking ahead, Enbridge’s continued investments in conventional and renewable energy projects will help the company capitalize on the energy demand and deliver solid distributable cash flow (DCF) per share. In addition, benefits from power-purchase agreements and regulated cost-of-service tolling frameworks will likely drive its earnings and DCF, supporting higher payouts.
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 60-70% of DCF, which is sustainable in the long term.
A bank stock
From the energy sector, let’s turn to top Canadian banks. These banks have been famous for paying dividends for more than 100 years, making them a dependable investment option for investors seeking passive income.
Among top banks, investors could consider investing in Bank of Montreal (TSX:BMO) stock. This financial services company has paid uninterrupted dividends for over 195 years, the longest dividend-paying corporation in Canada. Further, Bank of Montreal has increased its dividend at a compound annual growth rate (CAGR) of 5% in the past 15 years.
The financial services giant’s stellar dividend payouts are supported by its ability to deliver profitable growth. Its diversified revenue sources, high-quality loans, and solid deposit base drive its top line. Further, steady credit performance and operating efficiency cushion its earnings and drive its payouts.
Bank of Montreal expects its earnings to increase at a CAGR of 7-10% in the medium term, enabling it to grow its dividend at least at a mid-single-digit rate. Based on its closing price of $124.23 on April 26, Bank of Montreal stock offers a yield of 4.87%.
The bottom line
Enbridge and Bank of Montreal are reliable investments that generate consistent dividend income. The table shows that an investment of $5,000 in each stock can help you earn over $153.73 every quarter, or about $614.92/year.
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Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.
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.
