Advertisement
Canada markets open in 3 hours 44 minutes

  • S&P/TSX

    22,290.62
    +31.15 (+0.14%)
     

  • S&P 500

    5,187.70
    +6.96 (+0.13%)
     

  • DOW

    38,884.26
    +31.99 (+0.08%)
     

  • CAD/USD

    0.7274
    -0.0013 (-0.18%)
     

  • CRUDE OIL

    77.07
    -1.31 (-1.67%)
     

  • Bitcoin CAD

    85,388.55
    -2,119.59 (-2.42%)
     

  • CMC Crypto 200

    1,289.52
    -5.15 (-0.40%)
     

  • GOLD FUTURES

    2,316.60
    -7.60 (-0.33%)
     

  • RUSSELL 2000

    2,064.65
    +3.97 (+0.19%)
     

  • 10-Yr Bond

    4.4630
    -0.0260 (-0.58%)
     

  • NASDAQ futures

    18,192.75
    -6.75 (-0.04%)
     

  • VOLATILITY

    13.22
    -0.01 (-0.08%)
     

  • FTSE

    8,348.14
    +34.47 (+0.41%)
     

  • NIKKEI 225

    38,202.37
    -632.73 (-1.63%)
     

  • CAD/EUR

    0.6764
    -0.0007 (-0.10%)
     

3 Cheap Dividend Stocks to Boost Your Passive Income

Rajiv Nanjapla
·4 min read
funds, money, nest egg
funds, money, nest egg

Written by Rajiv Nanjapla at The Motley Fool Canada

With the strengthening of commodity prices and easing concerns over Omicron, the Canadian equity markets have bounced back strongly from last month’s lows, with the S&P/TSX Composite Index trading just 1.1% lower from its all-time high. With the Federal Reserve expected to raise interest rates this year, I expect the volatility in the equity markets to continue. So, given the uncertain environment, investors can buy the following three Canadian stocks to strengthen their portfolios and earn stable passive income.

Suncor Energy

With OPEC+ countries struggling to increase their productions amid technical issues, oil prices have increased to over US$85 per barrel. Meanwhile, analysts expect oil prices to rise further and reach US$100 per barrel this year. Higher oil prices could benefit oil-producing companies, such as Suncor Energy (TSX:SU)(NYSE:SU). Since the beginning of 2021, the company’s stock price has increased by 72.4%. Despite the surge, the company is still trading at a significant discount from its pre-pandemic levels. Also, its valuation looks attractive, with its forward price-to-earnings multiple at 8.1.

ADVERTISEMENT

Meanwhile, Suncor Energy has also planned to increase its production by around 5% this year. Production growth, increased refinery utilization, and cost-cutting initiatives could boost its financials in the coming quarters. So, its dividend is safe. Meanwhile, Suncor Energy currently pays a quarterly dividend of $0.42 per share, with its forward yield standing 4.65%. So, given the favourable environment, growth initiatives, and healthy dividend yield, I am bullish on Suncor Energy.

TC Energy

My second pick would be TC Energy (TSX:TRP)(NYSE:TRP), which has been raising its dividend for the last 21 years at a CAGR of over 7%. With the company earning around 95% of its adjusted EBITDA from long-term contracts or regulated assets, it generates stable cash flows, which has allowed it to increase its dividend consistently. Meanwhile, its forward dividend yield currently stands at a juicy 5.47%.

Meanwhile, TC Energy is continuing its $29 billion capital program, with most of its projects underpinned by long-term, cost-of-service, or take-or-pay contracts. Given its optimistic outlook, the management expects its adjusted EBITDA to grow at a CAGR of 5% over the next five years. So, I believe the company is well equipped to continue with its dividend growth. Also, it trades at an attractive forward price-to-sales multiple of 15.

Keyera

Last year, Keyera (TSX:KEY) outperformed the broader equity markets, with returns of 36%. However, it is still trading at a discount from its pre-pandemic levels. Also, its valuation looks attractive, with its forward price-to-earnings multiple standing at 17.1. Meanwhile, I expect the upward momentum could continue, given the rising energy demand, its investments in expanding its asset base, and cost-cutting initiatives.

Keyera expects to make capital investments of $560 million this year, expanding its asset base. It is also progressing with the construction of the KAPS pipeline project, which could become operational in early 2023. Along with these initiatives, its strong underlying regulated business could continue to drive its cash flows. Given its growth potential and strong liquidity of $1.4 billion, the company could continue to raise its dividend in the coming years. Since 2008, it has increased its dividends at a CAGR of 7%, with its forward yield currently at 6.69%. So, I believe Keyera would be an excellent addition to your portfolio.

The post 3 Cheap Dividend Stocks to Boost Your Passive Income appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Suncor Energy Inc. (usa)?

Before you consider Suncor Energy Inc. (usa), we think you’ll want to hear this.

Our S&P/TSX market doubling* Stock Advisor Canada team just released their top 10 starter stocks for 2022 that we believe could supercharge any portfolio.

Want to see if Suncor Energy Inc. (usa) made our list? Get started with Stock Advisor Canada today to receive all 10 of our starter stocks, a fully stocked treasure trove of industry reports, two brand-new stock recommendations every month, and much more.

Click Here to Learn More About Stock Advisor Canada Today

More reading

The Motley Fool recommends KEYERA CORP. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.

2022