Global financial markets are plagued with uncertainty and volatility, as Russia’s invasion of Ukraine has lasted a month. The resulting geopolitical tensions created by the war have caused the TSX to go through a roller coaster.
At writing, the S&P/TSX Composite Index is at its highest this year, up by 3.64% year to date. The sudden surge in the Canadian benchmark index shows the strength of the Canadian stock market through harsh economic environments.
Dividend investing is an excellent way for investors to hedge against stock market uncertainty and create a passive-income stream. Provided that you can find suitable income-generating assets, you can earn a substantial amount through shareholder dividends alone. The TSX is full of opportunities for income-seeking investors.
Today, I will discuss two TSX dividend stocks that boast jaw-dropping dividend yields that you could consider adding to your investment portfolio.
Freehold Royalties (TSX:FRU) is a $2.26 billion market capitalization, dividend-paying, oil and gas royalty business headquartered in Calgary. The company owns and operates assets located in five provinces across Canada and eight states south of the border. The company generates significant returns when commodity prices are high through its working interests in oil, natural gas, and natural gas liquids throughout the region.
At writing, Freehold Royalties stock trades for $15 per share, and it boasts a juicy 6.40% dividend yield. The high dividend yield appears to be sustainable, as the company delivers strong performances quarter after quarter. The company generated $72.08 million in 2021. Its revenues from royalties increased by almost 130% year over year, and its cash flows improved by 146% in the same period.
The company’s CEO has stated that Freehold Royalties can eliminate its net debt and break even by the end of fiscal 2022, making it an attractive asset to consider for dividend-seeking investors.
Acadian Timber (TSX:ADN) is a $324.89 million market capitalization company based in Edmundston. It supplies primary forest products in Eastern Canada and the Northeastern U.S., posting strong numbers after its business did well last year. The demand for its products has remained high, and the company can meet it through its vast timberland assets.
The company’s operating income saw a year-over-year increase of 4.5% in fiscal 2021. Its free cash flow increased by 11.7% in the same period.
At writing, Acadian Timber stock trades for $19.47 per share, and it boasts a 5.96% dividend yield. Its high dividend yield looks secure, as the demand for its products remains high. The company expects softwood and hardwood lumber consumption to increase in the coming years, making its current valuation a steal for investors.
Whether you want to hedge against uncertainty or create an income stream that can provide you with long-term wealth growth, a well-balanced portfolio can help you achieve your financial goals. High-yielding dividend stocks like Freehold Royalties and Acadian Timber could be ideal additions to your self-directed portfolio if you’re an income-seeking investor.