With nearly 19% year-to-date gains, the TSX Composite continues to reach new heights in 2024. When the stock market is surging, everyone loves talking about the hot growth stocks and speculative plays. But let's not forget about dividend stocks — the steady earners that could deliver stable income and, if you choose the right ones at the right time, strong returns, too. In the Canadian market, a few stocks stand out as "dividend stars," which have strong fundamentals and potential to deliver solid returns over the long term.
In this article, I'll highlight two top Canadian dividend stocks that could add stability and some notable upside to your portfolio.
Enbridge stock
Enbridge (TSX:ENB) is arguably the most trusted dividend stock in Canada. It currently has a market cap of $128.2 billion as its stock trades at $58.77 per share with slightly over 23% year-to-date gains. Even after this strong rally, ENB stock still offers an impressive 6.2% annualized dividend yield and distributes its dividend payouts every quarter.
The Calgary-based energy infrastructure giant is continuing to showcase impressive financial strength in 2024. In the third quarter, Enbridge posted a solid 51.2% YoY (year-over-year) jump in its total revenue to $14.9 billion due to a combination of strong asset utilization and recent strategic acquisitions. This surge in revenue clearly highlights Enbridge's ability to capitalize on its diverse portfolio, which spans natural gas, oil pipelines, and renewable energy.
The company's performance in the latest quarter also got a boost from the successful integration of key recent acquisitions, including U.S.-based gas utilities like the Public Service Company of North Carolina. These acquisitions have massively expanded Enbridge's customer base, adding over 600,000 new gas utility customers and strengthening its position as the largest natural gas utility operator in North America.
As Enbridge continues to expand its footprint across North America and invest in renewable energy, it could see higher growth in the years to come, which should help it deliver both income and growth for its shareholders.
Magna International stock
Unlike Enbridge, Magna International (TSX:MG) has faced a challenging year. Despite being a prominent player in the automotive and mobility technology sector, its stock has seen a 21% decline year to date, currently trading at $61.57 per share with a market cap of $17.7 billion. However, Magna still offers an impressive 4.3% annualized dividend yield, making it an attractive option for income-focused, long-term investors who are willing to look past the recent market turbulence.
In the September quarter, Magna's sales slipped by 3.8% YoY to US$10.3 billion, largely due to a 4% decrease in global light vehicle production. Despite this dip in revenue, the company managed to report a strong 22% increase in net profit to US$484 million, boosted by the recognition of deferred revenue from its deal with electric vehicle (EV) maker Fisker. However, its adjusted earnings for the quarter felt the heat of inflationary pressures on production costs.
Despite short-term challenges due to an unfavourable macroeconomic environment, Magna's commitment to future growth areas like EV and autonomous vehicle technology positions it to benefit from the ongoing transformation in the automotive industry. Magna stock could be a really attractive investment for long-term dividend investors, especially at its current valuation.
