As markets are expected to remain volatile in 2023, it makes sense to stay defensive. And it does not mean you will have to make a big compromise on returns when you are high on defensives. Rather, these safe and less-volatile names will provide stability and stable dividends every year.
And if you are investing via TFSA (Tax-Free Savings Account), the capital gain and dividends will be tax free. The long-term effect of holding stocks in TFSA is quite remarkable, as no money is lost in taxes, and compounding takes place in full.
So, here are three top dividend-paying TSX stocks for your TFSA.
Enbridge
Canadian energy midstream giant Enbridge (TSX:ENB) offers handsome dividends. It yields some of the highest 6.6% and has raised shareholder payouts for the last 28 consecutive years. So, if you invest $6,500 in ENB, it will make $430 in dividends every year. As the company increases its profits, Enbridge will likely raise shareholder payouts as well.
As crude oil prices increase, oil-producing companies make money. Thus, oil-producing stocks have a moderate positive correlation with oil prices. On the flip side, they also fell when oil prices tumbled. In case of Enbridge, it has a much lower correlation with oil prices, which makes it much less volatile. This explains its relative underperformance, where ENB stock has returned 16%, while TSX energy stocks have returned 50% this year.
However, Enbridge’s dividend reliability stands notably tall. It makes money from fixed-fee, long-term contracts, which facilitates dividend stability.
BCE
BCE (TSX:BCE) is another name with a rich dividend profile. It yields 6.1%, way higher than TSX stocks at large. Investing $6,500 in BCE stock will make $397 in dividends annually.
Telecom companies earn stable cash flows from their large, regulated operations. So, when high-growth companies experience earnings decline amid economic downturns, companies like BCE play well and outperform. In the last 10 years, BCE’s net income has increased by 2%, compounded annually. The stock has returned 9% compounded annually in this period, thanks to its consistently growing dividends.
The Canadian telecom industry is an oligopoly with a market share of almost equally divided between three top players. BCE has the second-largest wireless subscriber base and dons a relatively superior balance sheet. Its earnings and dividend stability stand tall in volatile markets and will likely play well for the long term.
Fortis
Utility stocks are classic recession plays as they keep growing steadily, even during economic downturns. Fortis (TSX:FTS) is one of the top utility stocks with a stable dividend profile. It currently yields 4%, which is in line with its peers.
Fortis has seen several recessions in the past and has kept its dividend-growth streak intact. This indicates its earnings visibility and dividend stability. So, it will likely keep raising shareholder payouts, even if a recession comes in 2023.
FTS has returned a negative 5% in 2022 amid rapidly rising interest rates. However, it will likely outperform in the long term, as the interest rate hike cycle reverses.
Free Dividend Stock Pick: 7.9% Yield and Monthly Payments
Canada’s inflation rate has skyrocketed to 6.9%, meaning you’re effectively losing money by investing in a GIC, or worse, leaving your money in a so-called “high interest” savings account.
That’s why we’re alerting investors to a high-yield Canadian dividend stock that looks ridiculously cheap right now. Not only does it yield a whopping 7.9%, but it pays monthly!
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The Motley Fool recommends Enbridge and Fortis. The Motley Fool has a disclosure policy. Fool contributor Vineet Kulkarni has no position in any of the stocks mentioned.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
