Passive Income: 3 Dividend Stocks for High Cash Payouts

If you’re looking for high yield, then energy stocks like Enbridge (TSX:ENB)(NYSE:ENB) are a great place to start.

| More on:
Various Canadian dollars in gray pants pocket

Image source: Getty Images

Looking for passive income?

If so, dividend stocks are just what you’re looking for. Similar to bonds, dividend stocks pay out regular cash money over time. Unlike bonds, their payouts can grow over time. It’s not unheard of for investors to earn 50% of their investment (or more) in annual dividends a few decades after they bought it. That’s a solid rate of return. In this article, I’ll explore three high-yield dividend stocks that offer large amounts of passive income.


Enbridge (TSX:ENB)(NYSE:ENB) is a dividend stock with a sky-high 6.6% yield. Its payout ratio is technically over 100% of net income but is only 72% if you go off distributable cash flow (DCF).

ENB is a pipeline company that transports oil and gas all over North America. It charges its clients fees to transport oil for them over a network of pipes that spans the continent. A number of pipeline projects from competitors were recently cancelled or delayed. The Keystone XL project was cancelled entirely. This means that Enbridge enjoys a solid competitive position.

With several competitors out of commission, it’s free to enjoy its high market share without worry. In its most recent quarter, Enbridge grew its adjusted earnings by 27% and its DCF by 4%. Overall, it was a pretty solid quarter, suggesting that ENB’s dividend is in no danger of being cut any time soon.

NorthWest Healthcare

NorthWest Healthcare Properties REIT (TSX:NWH.UN) is another dividend stock (more accurately a REIT) with a sky-high dividend yield. At today’s prices, NWH.UN yields 6%, which means that you get $6,000 in annual cashback on a $100,000 position.

NWH is a healthcare REIT, rendering it one of the most stable and dependable types of real estate companies around. Healthcare REITs lease to healthcare providers, which tend to have very stable and predictable revenue. Particularly in Canada and the EU, where healthcare is government-funded. In its most recent quarter, NWH showed solid growth in adjusted funds from operations (AFFO) and net asset value (NAV) and had a high collection rate. This is definitely one dividend play you can sleep soundly at night with.

Canadian Imperial Bank of Commerce

Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) is a Canadian bank stock with a 4% yield at today’s prices. If you invest $100,000 in CM stock, you get $4,000 in annual cashback. That’s a substantial cash bonus every year, and you can tax-shelter up to 75% of it in a Tax-Free Savings Account (TFSA). Is CM a good stock apart from its dividend?

Well, it has a 30% net margin and 8% annualized growth in earnings over five years. That’s pretty good growth and profit for a bank. The company also delivered a solid performance in its most recent quarter, delivering:

  • $1.73 billion in reported net income, up 48% year over year and 5% sequentially.
  • $1.8 billion in adjusted net income, up 45% year over year and 9% sequentially.
  • $3.76 in reported diluted EPS, up 47% year over year and 6% sequentially.
  • 17.9% return on equity (ROE).
  • A 12.3% CET1 ratio.

It was a solid quarter overall, speaking to a bank that can keep cranking out its juicy dividend for the foreseeable future.

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 Andrew Button has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS.

More on Dividend Stocks

investment research
Dividend Stocks

Better Buy: Scotiabank or TD Bank Stock?

Take a closer look at Scotiabank and TD Bank stock to determine which might be the better addition to your…

Read more »

retirees and finances
Dividend Stocks

How to Retire in a Bearish Market

Are you looking to retire this year but are skeptical because of the bearish market? Here is a way to…

Read more »

Target. Stand out from the crowd
Dividend Stocks

TFSA Investors: 2 Stocks to Buy if the Market Drops Even More

We still aren't in a recession, so we still haven't seen a market bottom. If these stocks drop even more,…

Read more »

Woman has an idea
Dividend Stocks

2 Dirt-Cheap Dividend Shares I’d Buy for Long-Term Passive Income

Dirt-cheap dividend stocks should be evaluated more thoroughly than their more stable counterparts for long-term dividend sustainability.

Read more »

stock research, analyze data
Dividend Stocks

3 Oversold Dividend Stocks (With a 7% Yield) I’d Buy Right Now

TSX dividend stocks such as Enbridge and TC Energy offer investors dividend yields of more than 7% in 2023.

Read more »

Dividend Stocks

Is it Time to Buy More of Royal Bank of Canada Stock?

With bank stocks down after the fall of three U.S. banks, it might be time to load up on Royal…

Read more »

growing plant shoots on stacked coins
Dividend Stocks

Passive Income Portfolio: 4 Dividend Stocks to Get Started

These dividend stocks offer some of the best and most stable passive income out there if you want to get…

Read more »

Dividend Stocks

TFSA Investors: 3 Oversold Stocks That Should Be On Your Radar Right Now

Consider these three oversold stocks if you want undervalued stocks for your self-directed TFSA portfolio.

Read more »