Many income-seeking investors choose to invest in reliable dividend stocks that virtually guarantee payouts without risk. These income-generating assets provide them with relatively low dividend yields. However, not all income-seeking investors look for risk-averse dividend payers.
Canadian dividend beasts offer yield-hungry investors higher-than-average passive-income streams that they can add to their portfolios. There are plenty of high-yield dividend stocks available in Canada. However, many of these companies offer greater rewards with a higher degree of risk. It would be wise to choose businesses that offer you the stellar income you are looking for, and Chemtrade Logistics Income Fund (TSX:CHE.UN) and Timbercreek Financial (TSX:TF) are two Canadian dividend beasts that offer dividend yields up to 8% that can provide you with sustainable, reliable, but higher recurring passive income.
Essential industrial suppler
Chemtrade Logistics is a niche company in the industrial sector that has been operating for the last two decades. The company provides an essential service to the industrial sector by supplying chemicals and related services to companies in Canada, South America, and the U.S.
Trading for $7.47 per share at writing, Chemtrade Logistics boasts a mammoth 8.03% dividend yield. Typically, such high dividend yields are considered unsustainable, and I advise investors to be wary of such companies. However, Chemtrade is well positioned to deliver dividend payouts to its shareholders at high yields without worrying about unsustainability.
The company’s year-to-date returns are 28% at its current valuation, and it can continue to deliver substantial returns. The company caters to various industrial companies, including agriculture, food production, oil refining, water treatment, and pulp & paper companies. It offers specialty chemicals, electrochemical products, performance chemicals, water solutions, and sulfur, making it an essential company.
Non-bank lender
Timbercreek Financial is another niche company, but it operates in a different sector. The financial company is a non-bank lender that might not be as popular as Canada’s Big Six banks but offers investors an interesting investment prospect. The company is a relatively new mortgage investment company founded in 2016, but it has already carved out a niche in the financial services sector.
The company offers structured financing solutions to its customers that they cannot get through the top financial institutions in Canada. The company has attracted a client base from the commercial real estate sector, and it boasts a growing portfolio of diversified and high-quality structured mortgage loans.
Timbercreek offers loans against income-producing commercial properties. Its operational structure allows Timbercreek to minimize the chances of loan defaults while generating substantial income. The company’s lending program also implements conservative loan-to-security ratios, offering it more financial security.
Trading for $9.46 per share at writing, the stock boasts a juicy but sustainable 7.29% dividend yield.
Foolish takeaway
Chemtrade Logistics Income Fund and Timbercreek Financial are two niche companies operating in different industries. The two companies are dividend beasts that you can consider investing in without the need for substantial investment capital and enjoy outsized returns through capital gains and high-yield dividend income. You could consider investing in the two companies, provided that you understand the potential risks that come with taking a position in such companies.
