2 TSX dividend stocks to buy for retirement income

Highlights 

  • Investors generally look for dividend stocks that can generate stable passive income to curb inflation effects.
  • While searching for dividend stocks, however, one should always look into the financials and fundamentals of companies to judge its dividend payout capabilities.
  • There are some robust stocks in the Canadian markets that have delivered stable dividends in the past few years and also hiked their dividends from time to time.

Investors generally look for dividend stocks that can generate stable passive income to curb inflation effects.

While searching for dividend stocks, however, one should always look into the financials and fundamentals of companies to judge its dividend payout capabilities.

There are some robust stocks in the Canadian markets that have delivered stable dividends in the past few years and also hiked their dividends from time to time.

Also read: Which Canadian bank stocks to buy as dividends go up?

Let us explore the two TSX-listed stocks.

1.     Enbridge Inc (TSX: ENB)

The Calgary, Alberta-based energy infrastructure company pays a quarterly dividend of C$ 0.835 per share, as against that of C$ 0.81 in November 2020.

Enbridge Inc’s dividend, which posted a yield of nearly seven per cent on Friday, December 3, grew by roughly seven per cent in three years.

The company posted GAAP earnings of C$ 682 million in the third quarter of fiscal 2021, down from C$ 990 million in Q3 FY2020. Its adjusted earnings were C$ 1.2 billion in the latest quarter, up from C$ 1 billion a year ago.

Enbridge recorded distributable cash flow of C$ 2.3 billion in Q3 FY2021 compared to C$ 2.1 billion in the same quarter a year ago.

The energy stock rose by more than 15 per cent in the past 12 months and delivered a return of roughly 18 per cent on a year-to-date (YTD) basis. It clocked a 52-week high of C$ 54.00 on November 5.

Enbridge’s stock closed at C$ 47.89 apiece on December 3, after noting a day high of C$ 48.34 during the session.

2.     Capital Power Corporation (TSX: CPX)

Capital Power Corporation, an Edmonton-based power producer, is scheduled to pay a quarterly dividend of C$ 0.547 apiece on January 31 next year, against an ex-dividend date of December 30.

On December 2, the enterprise announced that it is set to acquire a renewable energy portfolio, including developmental and construction sites in light of its decarbonization strategies. It is also evaluating carbon capture and storage solutions along with its Genesee 1 and 2 repowering projects.

The utility firm reported C$ 206 million as adjusted funds flow from operations in the third quarter of fiscal 2021. Its net cash flow from operating activities amounted to C$ 347 million in the latest quarter.

Its net income was C$ 38 million and adjusted EBITDA was C$ 286 million in Q3 FY2021.

 Capital Power Corporation (TSX:CPX)’s financial performance in Q3 FY2021

 Image source: © 2021 Kalkine Media Inc 

Data source: Capital Power Corporation

Capital Power Corporation noted a dividend yield of 5.7 per cent on December 3 and a closing stock price of C$ 38.39 apiece.

As for its stock performance, the utility stock surged by almost 17 per cent in the last 12 months.

Bottom line

Last month, on November 29, Enbridge Inc and Capital Power Corporation inked a memorandum of understanding (MOU) to work together on carbon capture and storage solutions to minimize carbon emissions in Alberta.

Development in low carbon or carbon neutral energy solutions could be crucial in the fight against growing climate change issues.

Also read: How the omicron variant can impact Canadian stock markets

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