However, dividend payments are not guaranteed. Investors should be careful when selecting dividend stocks and evaluate a company’s fundamentals, cash flow and growth prospects before investing. Against this backdrop, let’s take a look at two Canadian dividend stocks that currently offer attractive buying opportunities.
Enbridge
Enbridge (TSX:ENB) is a diversified energy infrastructure company that operates an extensive pipeline network that transports oil and natural gas across North America under a toll framework and long-term take-or-pay contracts. It also operates three U.S. natural gas companies and owns 41 clean energy assets, backed by long-term energy purchase agreements. Because the majority of its revenues come from regulated assets and long-term contracts – in addition to minimal exposure to commodity price fluctuations and inflation-indexed revenues – Enbridge generates stable, predictable cash flows. These strong cash flows have enabled the company to pay dividends for 70 years in a row.
Yesterday, Enbridge announced a 3% increase in its quarterly dividend, bringing it to $0.97 per share, marking its 31st consecutive year of dividend growth. The stock currently offers an attractive forward dividend yield of 5.82%.
In the third quarter, the Calgary-based company added $7 billion in new projects, expanding its secured capital backlog to $35 billion. Enbridge plans to invest $9 billion to $10 billion annually to advance these projects, which are expected to enter service in 2030. Supported by these growth initiatives, management expects earnings per share (EPS) to grow 4% to 6% and discounted cash flow per share to grow 3% through 2026, followed by annualized growth of approximately 5% thereafter. Given this strong outlook, management aims to return between $40 billion and $45 billion to shareholders over the next five years, making Enbridge an attractive long-term buy.
Bank of Nova Scotia
Another top dividend stock I’m bullish on is Bank of Nova Scotia (TSX:BNS), which has been paying dividends continuously since 1833. The bank operates in several countries and offers a comprehensive range of financial services, resulting in diversified income streams and strong cash flows that support consistent dividend payments. Over the past decade, it has increased its dividend by 4.73% annually and currently offers an attractive yield of 4.49%.
Earlier this week, BNS reported strong fourth-quarter performance, exceeding analyst expectations. The bank posted a net profit of $2.21 billion. After excluding $352 million in adjusting items, including restructuring costs and severance payments, adjusted net income came to $2.56 billion, which translated into adjusted earnings per share (earnings per share) of $1.93. Adjusted earnings per share reflect a robust 22.9% increase year-over-year, supported by earnings growth across all segments. In addition, return on equity improved to 12.5%, compared to 10.5% in the same quarter last year.
In addition to achieving strong financial results, BNS has strengthened its balance sheet, improved its loan-to-deposit ratio, improved its common equity tier-one ratio and maintained healthy liquidity. The bank also continues its strategy to grow its footprint in the lower-risk North American market while scaling back less profitable or risky activities in Latin America. By reallocating resources to higher-return opportunities, BNS aims to streamline operations and strengthen overall profitability. Given these efforts and its impressive track record of rewarding shareholders, I think BNS is well positioned to continue paying attractive dividends, making it an attractive buy.
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