It is therefore essential to be able to discern between a good value and a value trap. Today we will look at two dividend investing stocks on the TSX that offer high returns and that may have the resilience required during these times.
Enbridge (TSX: ENB) (NYSE: ENB) is a huge multinational energy distribution and transportation company. It has long been a favorite of dividend investors with its excellent track record for exceptional dividend growth and stability.
Now there is no doubt that Enbridge has been hit hard by the tightening economy and the drastic drop in oil prices. Although it is not itself a direct producer of oil, the company does transport it. If producers cannot afford to produce oil at certain prices, there are simply fewer products to distribute to Enbridge.
This struggle was highlighted in the recent performance of the stock investing in dividends. In its latest earnings announcement, Enbridge announced quarterly year-over-year revenue growth of -6.6%. In addition, Enbridge shares have declined 14.11% in the past 52 weeks.
Of course, the drop in Enbridge’s share price provided a higher return. At the time of this writing, Enbridge is trading at $ 41.41 and returns 7.82%.
For long-term investors, this figure is attractive. However, this comes with a distribution rate of over 300%. This certainly does not give a good idea of the sustainability of the yield.
Despite short-term concerns, Enbridge has long been a top dividend investment star. Its excellent track record should inspire confidence among investors, but there is no doubt that there is a risk involved here. It might be prudent for investors to cook while waiting for some sort of short-term dividend decline, even if only temporarily.
Even with an assumed decline, the reward on the table here could still be worth it for some more risk-tolerant investors.
Brookfield Renewable Partners (TSX: BEP.UN) (NYSE: BEP) has a variety of renewable energy assets around the world. If you think that the future of energy is in renewable energies, BEP will listen to you.
This dividend investment star owns and operates some of the largest renewable energy facilities in the world, and continues to grow frequently. Its portfolio of energy assets combines to form more than 19,000 megawatts of total capacity.
The company also largely negotiates long-term contracts for its power generation, which means that its sources of income are well defined and predictable.
In addition, as the global economy evolves towards more renewable energy options, BEP should capitalize because it already has world-class infrastructure.
At the time of this writing, this dividend investment option is trading at $ 66.10 and yields 4.52%. For investors focused on a very long-term horizon, this security offers both tremendous growth potential and a very attractive return.
Dividend investment strategy
These two stocks are solid dividend investment choices. Enbridge appears to have some difficult short-term challenges, but the reward is certainly there for willing investors.
If you are looking to add to a dividend investment plan, be sure to pay close attention to these TSX energy stars.
Speaking of the best TSX stocks to watch today …
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Insane contributor Jared Seguin owns shares of Brookfield Renewable Partners. The Motley Fool owns shares and recommends Enbridge.