3 Canadian Stocks for Reliable Dividends

The Canadian economy is on the rise with the growing government spending, improving employee compensation, and increasing household spending. Also, its booming stock market presents favorable investment opportunities for investors.

Given this backdrop, it could be wise to invest in fundamentally strong Canadian stocks Enbridge Inc. (ENB), BCE Inc. (BCE), and Fortis Inc. (FTS) offering reliable dividends.

The recently reported statistics showed that Canada's economy grew faster than the anticipated levels during the second quarter. The Statistics Canada data showed annualized growth of 2.1% in the quarter, above the 1.6% expectation of the markets and the 1.5% forecast by the Bank of Canada (BoC). Also, the central bank still remains on track to cut rates for a third consecutive time.

The economy grew with solid household spending, increasing government spending, and supported by strong wage growth in the mining and oil and gas extraction industry. Also, the central bank is likely to cut the key interest rate by another 25 basis points, bringing the rate down to 4.25%.

Further, the Canadian stock market has been on an uptrend recently, indicating an active market. The S&P/TSX Composite Index was up by 9.23% in the last quarter. Also, the index has surged close to 21% in the previous year.

Amid these economic tailwinds, investing in certain Canadian stocks offering could be suitable for investors seeking passive income. Also, these stocks have the potential for long-term growth.

Considering the industry’s optimistic outlook, investors could consider investing in fundamentally sound Canadian stocks ENB, BCE, and FTS.

Enbridge Inc. (ENB)

ENB operates as an energy infrastructure company. The company operates in five segments: Liquids Pipelines; Gas Transmission and Midstream; Gas Distribution and Storage; Renewable Power Generation; and Energy Services. It operates pipelines and related terminals to transport various grades of crude oil and other liquid hydrocarbons in Canada and the United States.

On July 30, ENB’s Board of Directors declared a quarterly dividend of $0.91 per common share, consistent with the June 1, 2024 dividend. The dividend was paid on September 1, 2024, to shareholders of record on August 15, 2024.

ENB pays an annual dividend of $2.69, which translates to a yield of 6.60% at the current share price. Its four-year average dividend yield is 6.95%. Moreover, the company’s dividend payouts have increased at a CAGR of 4.3% over the past five years.

On June 24, ENB and Six Nations Energy Development LP (Six Nations) announced plans to advance the development of a new wind energy project southeast of Weyburn, Saskatchewan. The Project is expected to produce 200 megawatts of emissions-free power, enough to support the annual energy needs of more than 100,000 Saskatchewan homes.

During the second quarter that ended June 30, 2024, ENB’s adjusted EBITDA rose 8.2% from the year-ago value to C$4.34 billion ($3.20 billion). Its adjusted earnings stood at C$1.25 billion ($923.14 million), or $0.58 per common share, for the quarter, respectively. In addition, the company’s distributable cash flow came in at C$2.86 billion ($2.11 billion), up 2.7% from the prior year’s quarter.

Analysts expect ENB’s EPS for the fiscal year (ending December 2025) to grow 6.9% year-over-year to $0.59, and its revenue for the same year is expected to be $27.45 billion. Shares of ENB have surged 13.8% over the past six months and 18.6% over the past year to close the last trading session at $40.88.

ENB’s solid fundamentals are reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

ENB has a B grade for Momentum and Stability. It is ranked #31 out of 39 stocks in the A-rated Foreign Oil & Gas industry.

In addition to the POWR Ratings we’ve stated above, we also have ENB ratings for Growth, Quality, Value, and Sentiment. Get all ENB ratings here.

BCE Inc. (BCE)

BCE is a communications company that provides wireless, wireline, Internet, and television (TV) services to residential, business, and wholesale customers in Canada. It operates through two segments, Bell Communication and Technology Services; and Bell Media.

On September 17, BCE’s wholly owned Bell and MacLean, the world's largest Canadian-based manufacturer of underground mining equipment, entered a technology collaboration to support the evolving mining customers’ needs. Through the partnership, companies will accelerate research and development on mining vehicle automation, autonomy, and interoperability.

The innovations introduced will improve equipment interoperability, the way how machines exchange and make use of information, enhance safety for workers, drive sustainable practices, and reduce vehicle emissions.

On July 25, Bell Canada and Hyundai Motor Group announced a multi-year extension of their strategic partnership to offer Canadian customers with advanced in-car connected infotainment services, enhancing their in-vehicle experiences.

On August 1, BCE's Board of Directors declared a quarterly dividend of $0.9975 per common share, payable on October 15, 2024, to shareholders of record at the close of business on September 16, 2024.

BCE’s annual dividend of $2.94 translates to a yield of 8.38% at the current share price. Its four-year average dividend yield is 6.33%. Also, the company’s dividend payouts have increased at a CAGR of 4.5% over the past five years.

For the second quarter that ended June 30, 2024, BCE reported operating revenues of $6.01 billion. Its adjusted EBITDA increased 2% from the previous year’s quarter to $2.70 billion. Net income attributable to common shareholders and EPS were $537 million and $0.59, up 63.2% and 59.5% from the prior year’s quarter, respectively.

Furthermore, the company’s free cash flow grew 8% from the year-ago value to $1.10 billion.

Analysts expect BCE’s revenue and EPS for the fiscal year (ending December 2025) to increase 0.9% and 0.9% year-over-year to $18.34 billion and $2.24, respectively.

BCE’s stock has soared 1.1% over the past month and 3.8% over the past six months to close the last trading session at $35.10.

BCE’s bright prospects are reflected in its POWR Ratings. The stock has an A grade for Stability. BCE is ranked #38 among 43 stocks in the A-rated Telecom - Foreign industry.

Click here to access BCE’s ratings for Value, Growth, Quality, Sentiment, and Momentum.

Fortis Inc. (FTS)

FTS operates as an electric and gas utility company in Canada, the United States, and the Caribbean countries. The company generates, transmits, and distributes electricity to approximately 447,000 retail customers in southeastern Arizona and 103,000 retail customers in Arizona's Mohave and Santa Cruz counties.

On July 31, FTS’ Board of Directors declared a dividend of $0.59 per share on the common shares, paid on September 1, 2024, to the shareholders of record at the close of business on August 20, 2024.

It also declared dividends on the following series of the first preference shares of the corporation: $0.31 on the Series – F, $0.38 on the Series – G, $0.11 on the Series – H, $0.40 on the Series – I, $0.30 on the Series – J, $0.34 on the Series - K, and $0.24 on the Series – M.

FTS pays an annual dividend of $1.74, which translates to a yield of 3.87% at the current share price. Its four-year average dividend yield is 3.84%. Moreover, the company’s dividend payouts have increased at a CAGR of 2.8% over the past three years. FTS has raised its dividends for eight consecutive years.

FTS’ adjusted net earnings increased 9.6% from the prior-year quarter to C$331 million ($244.45 million) during the second quarter that ended June 30, 2024. The company’s adjusted net earnings per share came in at $0.67, indicating growth of 8.1% from the year-ago value.

Street expects FTS’ revenue for the fourth quarter (ending December 2024) to increase 11.5% year-over-year to $2.39 billion. Similarly, the company’s EPS is expected to grow 12.4% year-over-year to $0.60 for the same period. Furthermore, FTS has surpassed the consensus EPS estimates in each of the trailing four quarters.

FTS’ stock has gained 14.4% over the past six months and 12.3% over the past year to close the last trading session at $45.01.

FTS’ POWR Ratings reflect its robust outlook. The stock has a B grade for Momentum and Stability. Within the B-rated Utilities - Foreign industry, FTS is ranked #45 among the 52 stocks.

Click here to access additional ratings of FTS for Sentiment, Growth, Value, and Quality.

What To Do Next?

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ENB shares were trading at $40.88 per share on Tuesday afternoon, down $0.00 (0.00%). Year-to-date, ENB has gained 19.88%, versus a 20.82% rise in the benchmark S&P 500 index during the same period.

Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.

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