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The recent stock market volatility may disappoint investors hoping for another blowout year of gains, but it’s good news for income-hungry investors.

When share prices rise, dividend yields fall. With the S&P/TSX Composite Index down almost 2 per cent for the year through Feb. 23, there’s a nicely varied selection of blue-chip dividend stocks with yields of 4 per cent or more.

Within this 4-per-cent club of stocks is a smaller, more elite group with annualized five-year dividend growth that exceeds the most recent inflation rate of 5.1 per cent. These stocks offer a very competitive initial yield, and a demonstrated ability to increase dividends at a rate that exceeds even today’s elevated increases in the cost of living.

Here are stocks that made it through this screen:

  • Enbridge Inc. (ENB-T): Even after a solid run over the past 12 months, ENB still offers a comparatively high yield of 6.5 per cent. Globeinvestor.com shows a five-year dividend growth rate of 9.5 per cent, but the increase announced in December, 2021, was 3 per cent.
  • Pembina Pipeline Corp. (PPL-T): A 6-per-cent dividend yield and an annualized five-year dividend increase of just under 7 per cent.
  • BCE Inc. (BCE-T): A yield of 5.6 per cent and a five-year dividend growth rate of 5.1 per cent. BCE recently announced a dividend hike of – wait for it – 5.1 per cent.
  • TC Energy Corp. (TRP-T): The yield is 5.4 per cent and the five-year dividend growth rate is 9 per cent; projected growth looking ahead is 3 to 5 per cent.
  • Manulife Financial Corp. (MFC-T): A 5.1-per-cent yield and a five-year dividend growth rate of 9.6 per cent.
  • Power Corp. of Canada (POW-T): A 5-per-cent yield and a five-year dividend growth rate of 12.4 per cent.
  • Algonquin Power and Utilities Corp. (AQN-T): A yield of 4.8 per cent and five-year dividend growth of 10 per cent.
  • Emera Inc. (EMA-T): A yield of 4.5 per cent and five-year dividend growth of 5.2 per cent.
  • Telus Corp. (T-T): A 4.1-per-cent yield and five-year dividend growth of 6.7 per cent.

A couple of banks, Bank of Nova Scotia (BNS-T) and Canadian Imperial Bank of Commerce (CM-T), also had a yield of 4 per cent or more. However, their dividend growth rates were below 5.1 per cent as a result of a freeze on dividend hikes mandated by regulators. That freeze ended in the latter part of 2021.

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