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Rising Volatility: Boost Your Passive Income With These 4 Dividend Stocks

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Woman has an idea
Woman has an idea

Written by Rajiv Nanjapla at The Motley Fool Canada

The multiple rate hikes, high inflation, and weak economic data from China have made investors skeptical, leading to a selloff in the equity markets. So, given the volatile environment, investors can buy the following four dividend stocks to boost their passive income. These four companies are less impacted by market volatilities given their regular payouts.

TC Energy

TC Energy (TSX:TRP)(NYSE:TRP) is a midstream energy company that generates 95% of its adjusted EBITDA from regulated assets or long-term contracts. So, its cash flows are predictable and reliable. Supported by these robust cash flows, the company has raised its dividend for the previous 22 years at an average yearly growth of 7%. With a quarterly dividend of $0.90/share, its forward yield stands at 5%.

Meanwhile, the company is progressing with its $25 billion secured capital program by investing around $1.7 billion in the first quarter. Supported by these investments, its management expects its adjusted EBITDA to grow at a CAGR of 5% through 2026. So, I believe Enbridge’s dividend is safe. Meanwhile, the company’s valuation also looks attractive, with its NTM price-to-earnings multiple at 16.8. So, I believe TC Energy would be an excellent addition to your portfolio during this volatile environment.

BCE

With an impressive dividend yield of 5.4%, BCE (TSX:BCE)(NYSE:BCE) is my second pick. The growth in remote working, learning, and digitization has driven the demand for telecommunication services. Meanwhile, the company has accelerated its investment in expanding its 5G and broadband infrastructure across Canada. Supported by these investments, the company hopes to add 900,000 new broadband connections this year while increasing its 5G service to cover 80% of the Canadian population.

BCE could also benefit from rising roaming revenue and media revenues due to the easing of restrictions. With liquidity of above $2.8 billion, the company’s financial position also looks stable. So, I expect BCE is well positioned to continue paying a dividend at a healthy yield.

Canadian Utilities

Given its long history of raising its dividends, I have selected Canadian Utilities (TSX:CU) as my third pick. The diversified energy infrastructure company is involved in utility, energy infrastructure, and retail energy business, generating stable cash flows. Supported by these reliable cash flows, the company has increased its dividend for the past 49 years.

Meanwhile, the company continues to strengthen its asset base, with a capital investment of $263 million in the first quarter. Of these investments, 83% were committed to regulated utility assets, while 17% were in energy infrastructure. These investments were in line with its $2 billion planned investment for 2021 and 2022. So, I believe Canadian Utilities is well positioned to continue its dividend growth.

NorthWest Healthcare Properties REIT

My final pick is NorthWest Healthcare Properties REIT (TSX:NWH.UN), which pays monthly dividends, with its forward yield currently at 6.25%. Given its highly defensive healthcare portfolio, long-term agreements, reliable tenants, and inflation-indexed rent, its cash flows are reliable, thus allowing it to pay a dividend at a healthy rate.

Meanwhile, the company is looking at expanding its footprint in the United States and has recently acquired 10 healthcare facilities for $765 million. The company is also progressing with its institutional joint venture initiatives in the U.K. and the U.S. and expects to complete them over two quarters. The company has over $2 billion of development opportunities, which is in line with its expansion strategy. So, I believe NorthWest Healthcare is an excellent buy right now.

The post Rising Volatility: Boost Your Passive Income With These 4 Dividend Stocks appeared first on The Motley Fool Canada.

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The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.

2022

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