When searching for great dividend stocks, there is a wide variety of factors to consider. Among them are earnings durability, recession resilience, dividend safety, and competitive advantages. However, geographic diversification is something we find investors often overlook.
Canadian stocks listed in the US tend to be undervalued relative to industry peers based in the US, and that not only means the margin of safety is better for the shareholder, but dividend yields are higher as well. Here we’ll profile three Canadian high-dividend stocks in three different industries that we like for their strong value and yield propositions today.
We note that all dollar figures below are US dollars, converted from Canadian dollars.
Our first stock is Enbridge (ENB) , an energy infrastructure company based in Calgary, Canada. The company operates five segments: Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation, and Energy Services. Through these segments, Enbridge offers a wide variety of energy-related services from transportation of oil and natural gas, gathering and processing facilities, wind and solar assets, and much more. Enbridge is a truly diversified energy company with traditional fossil fuels and renewables as part of its portfolio.
The company was founded in 1949, produces about $40 billion in yearly revenue, and trades with a market capitalization of $95 billion.
We see growth as decent for Enbridge moving forward, estimated at 4% annually. Enbridge has a history of producing fairly reliable growth, especially considering the inherent volatility of operating an energy business. However, the diversification the company’s portfolio displays has served it well, and we believe its focus on renewables is a key differentiator for the years to come.
The company continues to invest billions of dollars into growth projects, and the company is targeting cash flow gains of 5% to 7% per year. We are a bit more conservative given the high base of earnings for 2022.