Central banks around the world have kept interest rates low to drive economic growth. However, low interest rates have made debt certificates unattractive to conservative investors seeking stable returns.
Thus, in a low interest rate environment, high-yielding dividend stocks appear to be attractive investments that generate a stable inflow of funds. Let’s focus on two such dividend payers that offer high yields at current price levels. It is worth noting that these companies have resilient cash flows, have been paying dividends and growing for a very long time, and have sustainable payment ratios.
Embridge (TSX: ENB)(NYSE: ENB) The stock offers a high dividend yield of 6.6%, which is safe. My optimism about that payment comes from the long history of dividend payments. For example, Embridge has been paying dividends for over 66 years in a row. In addition, energy infrastructure companies have increased their annual dividends over the last 26 years with a compound annual growth rate (CAGR) of 10%.
While the COVID-19 delta variant continues to pose challenges to the energy sector, Embridge’s diverse asset and contract framework is appropriate as the company provides strong cash flow per share (DCF). The pace for the next few years suggests that there is the potential for continued growth in dividends.
Enbridge’s $ 17 billion secured capital program has the potential to generate incremental EBITDA to increase visibility into future cash flows and support dividend payments over the next few years. Meanwhile, continued momentum in the core business, recovery of mainline volume, and growth opportunities in the renewable energy segment have the potential to drive revenue and cash flow. In addition, Moda Midstream Operating announced the acquisition of LLC. This has the potential to increase EBITDA, DCF / shares, and earnings.Overall, Embridge Top investment For investors seeking stable income and high yields.
Like embridge Penbina pipeline (TSX: PPL)(NYSE: PBA) Another top stock in providing energy space High yield And reliable payment. The Penvina Pipeline offers monthly dividends, generating 6.3% at current price levels. Since its inception in 1997, it has paid a dividend of $ 10.1 billion. In addition, we have increased our dividend at a CAGR of 4.9% over the last decade.
Pembina Pipeline dividend payments are driven by highly contracted businesses that generate strong fee-based cash flow. The long-term contract includes a take-or-pay or service cost arrangement that reduces volume risk. In addition, its payment ratio is 72% of the 2020 fee-based distributable cash flow, which means that the payment is more secure and more than covered.
In the future, we expect Penvina’s diversification and contract assets to generate strong cash flow. In addition, backlogs, new growth projects, and more quantities and pricing may drive adjusted EBITDA and support higher dividend payments.
Embridge and Penbina have a long track record of paying dividends and growing. Both of these companies have diversified their assets and generated resilient cash flow to support higher dividend payments. Investors seeking high yields at low interest rates may consider investing in these stocks at current price levels.
This article represents the opinion of a writer who may disagree with the “official” recommendation position of the Motley Fool Premium Services or Advisors. We are Motley! Asking investment treatises, even our own treatises, can help you think critically about your investment and make decisions to be smarter, happier, and richer. As a result, we may publish articles that may not match recommendations, rankings, or other content. ..
Stupid contributor Snehanahata There are no positions in any of the listed stocks. Motley Fool owns a stake in Enbridge and recommends Enbridge. Motley Fool recommends PEMBINA PIPELINE CORPORATION.
Two high-yielding TSX shares to buy at low interest rates
https://www.fool.ca/2021/09/20/2-high-yield-tsx-stocks-to-buy-amid-low-interest-rates/ Two high-yielding TSX shares to buy at low interest rates