Image source: Getty Images

Amid lower interest rates, dividend-paying stocks with high and reliable yields appear to be an attractive investment for a constant influx of cash. So if you’re looking for a higher yield in 2022, consider buying those dividend-paying Toronto Stock Exchange stocks now.


With its long history of paying dividends, strong earnings base and high yield of 7%, Enbridge (TSX: ENB) (NYSE: ENB) is a must-have TSX stock for generating consistent income. Enbridge has paid dividends for over six and a half decades. Plus, its dividends have a 10% CAGR over the past 26 years.

I expect Enbridge to continue to benefit from the increased utilization of its assets, the recovery in Mainline volumes and the strength of its core business. In addition, its diversified cash flow, strategic acquisitions and contractual arrangements bode well for growth.

With the $ 10 billion growth capital commissioned in 2021, Enbridge expects to generate strong cash flow in 2022. It recently announced a 3% increase in annual dividends. In addition, it projects its average annual growth of 5 to 7% of its distributable cash flow per share until 2024.

Going forward, its strong guaranteed capital program, income indexations, and productivity savings will likely dampen its profits and, in turn, lead to higher dividend payouts. Enbridge’s high dividend yield is secure and its target payout ratio of 60-70% is sustainable over the long term.

Pembina pipeline

Like Enbridge, Pembina pipeline Stocks (TSX: PPL) (NYSE: PBA) offer a high and reliable dividend yield. Pembina has been providing monthly payments and paying dividends for over two decades. To be precise, it has paid dividends since 1997. In addition, it has paid dividends worth $ 10.5 billion since then.

Pembina’s heavily contracted business, recovering volumes and rising commodity prices suggest that Pembina may continue to drive shareholder returns through consistent dividend payments. In addition, order books and new growth plans will likely support its growth.

It should be noted that the shares of this energy infrastructure company are trading cheaper than its peers. Pembina’s forward EV / EBITDA multiple of 10.2 is below its historical average and compares favorably to the peer group average of 11.7.

Overall, its heavily contracted business, strong commission-based cash flow, low valuation, and high 6.5% dividend yield make it a solid investment at current levels.

Algonquin Power & Utilities

Next come the shares of the utility company Algonquin Power & Utilities (TSX: AQN) (NYSE: AQN). Thanks to its prudent business mix and high quality asset base, Algonquin Power has consistently grown earnings at a decent rate, enabling it to improve shareholder returns through increased dividends.

Notably, Algonquin Power has paid and increased its dividends at a CAGR of 10% over the past 11 years. In addition, it yields 4.7% at current levels.

Going forward, its five-year $ 12.4 billion investment program is expected to boost its rate base and, therefore, its high-quality earnings base. It should be noted that Algonquin Power predicts that its rate base will increase at a CAGR of 14.6% from 2022 to 2026. Meanwhile, it expects its profits to increase by a CAGR of 7 to 9%. during the same period.

Overall, its low-risk utility assets, long-term contracts, opportunities in renewables, and visibility into future earnings make it a high-income stock. In addition, Algonquin Power’s stock has experienced a solid pullback, which represents a good buying opportunity.