Investing in quality high-dividend stocks can help you earn a passive-income stream for life. You need to identify companies that generate steady cash flows across business cycles, have sustainable payout ratios, and are armed with robust balance sheets.
Ideally, these dividend-paying companies should increase their earnings consistently, resulting in dividend hikes each year. Two such energy infrastructure TSX stocks with a high dividend yield are Pembina Pipeline (TSX:PPL) and Enbridge (TSX:ENB).
Let’s see how you can earn $6,000 in annual dividend income each year by investing in these two dividend stocks.
Pembina Pipeline stock
A Canada-based pipeline company, Pembina Pipeline, ended the third quarter (Q3) of 2023 with an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $1.02 billion, an increase of 6% year over year. Its EBITDA grew due to growing volumes, rising utilization rates, and strong performance from its marketing business.
Pembina recently announced plans to acquire Enbridge’s remaining in the Alliance Pipeline, Aux Sable Pipeline, and NRGreen joint ventures for $3.1 billion. The acquisition will mean Pembina now has complete ownership of these natural gas assets, which should drive future cash flows higher.
The Alliance Pipeline is a natural gas transportation system operating in Canada and the United States. It spans 3,888 kilometres, ferrying natural gas from Western Canada to Chicago. The Aux Sable processing plant is located in Illinois and connected to the Alliance Pipeline and processes natural gas liquids from the pipeline.
Pembina Pipeline pays shareholders an annual dividend of $2.67 per share, indicating a forward yield of 5.8%. These payouts have increased by 11.2% annually in the last 17 years, which is exceptional for an energy company. Priced at 15 times forward earnings, PPL stock is not too expensive and trades at a discount of 12% to consensus price target estimates.
Enbridge stock
Among the most popular dividend stocks in Canada, Enbridge offers you a tasty dividend yield of 7.7%. A majority of its cash flows are tied to inflation-linked, long-term contracts, allowing Enbridge to raise dividends for 28 consecutive years.
It recently disclosed plans to acquire multiple gas utility businesses from Dominion Energy, which will drive earnings growth in the near term. To complete the acquisition, Enbridge raised $8 billion in debt and has secured $14 billion in total funding. The utility acquisitions are expected to close by the end of 2024, improving the resiliency of Enbridge’s cash flows.
In the last 20 years, Enbridge has returned 11% annually to shareholders, easily outpacing the broader markets. Despite these stellar gains, ENB stock is priced at 16 times forward earnings and trades at a discount of 12.8% to consensus price target estimates.
The Foolish takeaway
Investing a total of $90,606 distributed equally in the two TSX dividend stocks will help you earn $1,500 each quarter or $6,000 in annual dividends. If the companies raise dividends by 5% annually, your dividend income will double in the next 14 years.
COMPANY
RECENT PRICE
NUMBER OF SHARES
DIVIDEND
TOTAL PAYOUT
FREQUENCY
Enbridge
$47.51
820
$0.915
$750.3
Quarterly
Pembina Pipeline
$45.95
1,124
$0.6675
$750.27
Quarterly
However, investing such a huge sum in just two stocks does not make financial sense. You should identify other blue-chip TSX stocks and further diversify your dividend portfolio.
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.
