4 High Yield Dividend Stocks to Buy Amid Rising Volatility
Amid concerns about rising valuations, rising inflation and slowing the rate of economic recovery, stock markets have become volatile in recent months. So, investors can buy the following four high dividend stocks to strengthen their portfolio while earning higher stable passive income.
Amid growing energy demand due to improved economic activity, I chose Enbridge (TSX: ENB) (NYSE: ENB), a mid-level energy company, as my first choice. It has paid dividends continuously for the past 66 years while increasing the same compound annual growth rate (CAGR) of over 10% over the previous 26 years. Meanwhile, its forward yield currently stands at an impressive 6.59%.
In addition, Enbridge management plans to invest approximately $ 17 billion from 2021 to 2023 to expand its transmission and distribution activities while increasing its power generation capacity. Along with these investments, the recovery of the energy sector and its solid underlying activity could boost its results and cash flows, thus enabling it to continue to grow its dividend.
Pembina pipeline (TSX: PPL) (NYSE: PBA) would be my second choice. It pays a monthly dividend of $ 0.21 per share with a forward yield of 6.33%. The company derives approximately 94% of its Adjusted EBITDA from regulated assets or from fee-for-service and bought-deal contracts, thereby delivering stable cash flow. Supported by this significant cash flow, the company has rewarded its shareholders with $ 10.1 billion in dividends since 1997.
Meanwhile, the Pembina Pipeline has around $ 1 billion in projects under construction, while around $ 700 million is in the delayed reactivation phase and on hold. Plus, it has over $ 4 billion in potential new projects. The company’s financial position appears healthy, with liquidity amounting to $ 2 billion. Given its healthy growth outlook and strong liquidity position, I think Pembina Pipeline’s dividends are secure.
Pizza Pizza Royalty
After reporting a strong performance in the second quarter last month, Pizza Pizza Royalty (TSX: PZA) increased its monthly dividends from $ 0.055 per share to $ 0.06. Rising dividends show management’s confidence in future earnings and cash flow. The easing of restrictions has allowed the company to reopen its food courts and non-traditional restaurants, which could improve its finances in the coming quarters.
Pizza Pizza’s investment in strengthening its digital channels, such as restaurant delivery and pickup, could continue to support its financial growth even in the post-pandemic world. In addition, given its light asset model, the company could rebound quickly. Currently, its forward yield stands at a good level of 6.28%.
My final choice would be AEC (TSX: BCE) (NYSE: BCE), which has steadily increased its dividends since 2008. Its large and growing customer base and strong recurring income generate stable cash flow, allowing it to continuously increase its dividends. It currently pays a quarterly dividend of $ 0.875 per share, with a forward yield of 5.41%.
Meanwhile, the demand for telecom services is growing amidst the backdrop of digitization and a growing culture of work and distance learning, to the benefit of BCE. In addition, the company is aggressively investing in expanding its 5G service and broadband services, which could improve its finances in the coming quarters.
Its financial position also appears healthy, with cash flow of $ 5.3 billion as of June 30. So I think BCE would be a great buy for income seeking investors.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We are straight! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer, so we post sometimes articles that may not conform to recommendations, rankings or other content. .
The Motley Fool owns stock and recommends Enbridge and PIZZA PIZZA ROYALTY CORP. The Motley Fool recommends PEMBINA PIPELINE CORPORATION. Foolish contributor Rajiv Nanjapla has no position in any of the stocks mentioned.