After a challenging last month, the Canadian equity markets have bounced back strongly this month, with the S&P/TSX Composite Index rising 3.7%. On Friday, the United States Labor Department reported that the consumer price index in June fell by 0.1% compared to May. It was the first month-on-month decline in the last four years. The signs of easing inflation have raised investorsâ hopes of early interest rate cuts, boosting equity markets.

Meanwhile, concerns over continued geopolitical tensions and the impact of higher interest rates on global growth persist. Adding a quality dividend stock with a high yield is an excellent strategy to strengthen your portfolio. Let's assess the following two high-yield dividend stocks to pick which would be a better buy right now.

BCE

The Canadian telecom sector has been under pressure over the last two years amid unfavourable federal policy changes and high interest rates. The CTRC (Canadian Radio-television and Telecommunications Commission) has mandated large telcos to share their broadband network with independent players to increase competition. However, this move would greatly disincentivize players, such as BCE (TSX:BCE) and Telus (TSX:T), who have made substantial capital investments in expanding their broadband infrastructure. Amid the weakness, BCE has lost around 40% of its stock value over the last two years. Amid the steep correction, its NTM (next-12-month) price-to-earnings multiple has declined to 14.9.

However, the demand for telecommunication services is rising amid digitization and growth in remote working and learning. The company continues to strengthen its 5G infrastructure, expanding its customer base and average revenue per user. Further, the company has lowered its capital spending this year on pure fibre build and highly-regulated businesses due to unfavourable policies. It has also slashed its workforce and has undertaken other cost rationalization initiatives to improve its profitability. Its financial position also looks healthy, with a liquidity of $4.7 billion. However, its net debt-to-adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) ratio is 3.6, higher than the earlier provided guidance.

Meanwhile, telecommunication companies enjoy healthy cash flows due to recurring revenue sources. With these stable cash flows, BCE has paid dividends for the last 16 years, while its forward yield is currently at 9.01%.

Enbridge

Enbridge (TSX:ENB) is a midstream energy company that has been paying dividends uninterruptedly for 69 years. It has also raised its dividends at an annualized rate of 10% for the previous 29 years. Its contracted and inflation-indexed asset base provides stability to its financials. Given its capital-intensive business, the company has been under pressure over the last two years, losing 18% of its stock value. Amid the pullback, its forward price-to-earnings multiple stands at an attractive 16.5.

Meanwhile, Enbridge is continuing its $25 billion secured capital program, which could deliver 3% annual growth through 2028. Its asset optimization and cost-saving initiatives could also contribute to 1-2% yearly growth. Apart from organic growth, the midstream energy company is also making strategic acquisitions. It has acquired two natural gas utility assets in the United States from Dominion Energy and is working on closing the third deal. So, its growth prospects look healthy.

Enbridge has also divested several non-core assets, with the net proceeds utilized to fund its acquisition and lower its debt levels. Its net debt-to-adjusted EBITDA ratio is 4.7, within the company's guidance of 4.5-5. Given its healthy growth prospects and solid financial position, I believe Enbridge is well-equipped to continue with its dividend growth. It currently offers a forward yield of 7.43%.

Investors takeaway

Although BCE trades at an attractive valuation and offers a higher yield, I believe Enbridge would be a better buy due to its solid underlying business, healthy cash flows, and excellent growth prospects.

The post Both Have Yields Over 7.4% — But 1 Is a Better Stock to Buy Now Than the Other appeared first on The Motley Fool Canada.