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The Smartest High-Dividend Stocks to Buy Today

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No investor, no matter how experienced and well-versed in good investment practices they are, can create a perfectly secure portfolio. It’s impossible to predict how the market will behave in the weeks, months, and years from now. But we all make the best of what we know of the stock’s history, fundamentals, sector, and broad market conditions at any given time.

Still, the more you research, the smarter your picks would be for both dividend and growth stocks. And if you are looking for some smart dividend picks, here are three that should be on your radar.

An energy leader

As one of the largest oil and gas sector service providers, Keyera (TSX:KEY) has experienced decent growth in 2021, riding the momentum of a reviving energy sector. The stock grew about 47% since the beginning of the year, and considering its price-to-earnings of 118 and price-to-book of 2.7; the stock has also gotten more expensive.

Keyera controls a powerful integrated value chain in the natural gas sphere, the relatively “safer” of the two key components of the sector. The company is also focusing on the clean transition the energy sector is going through right now.

The company offers a juicy 5.7% yield. The payout ratio is not very sustainable at the moment, but financial recovery seems underway, and a few strong quarters might change that.

A commercial REIT

The real estate sector, especially the REIT segment of it, is beloved for its high yields. But the yields often come with fluctuations, with REITs slashing their dividends during harsh financial times. And one of the yields that slashed its dividends in 2020 (by a significant margin) is PRO Real Estate Investment Trust (TSX:PRV.UN). The company slashed its payout ratio from $0.0525 to $0.0375.

But there are two reasons why this REIT might still be a great dividend buy. The first is its mouth-watering 6.4% yield, and the second is that the REIT is highly unlikely to slash its dividends any time in the near future. In fact, there is a strong possibility that it might grow its dividends once again, which would result in a significant dividend income hike.

An income fund

If you are looking for a truly remarkable yield, the close-end Canoe EIT Income Fund (TSX:EIT.UN) (formerly EnerVest) might be worth looking into. The fund has been around for over two decades. Though capital appreciation is neither Canoe’s forte nor the reason most investors add it into their portfolios, the company has been growing at a powerful pace ever since the crash and has grown 31% in the past 12 months alone.

The main reasons people consider this fund is its diversified portfolio and impressive distributions. The company is sustaining a payout of $0.1 per share for some time now, and despite its recent recovery-fuelled growth bout, the company is offering a powerful 9.9% yield. If you invest $100,000 in this fund, the current yield is enough to get you a solid, $825 a month passive income.

Foolish takeaway

Finding high-yield stocks is easy enough but choosing stocks that are not likely to cut their dividends in the future is the key to smart dividend investing. You want your passive income stream to grow over time, not thin out as more and more holdings in your dividend portfolio start slashing their dividends.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends KEYERA CORP.

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