Dividend stocks are often defined as companies that regularly return capital to shareholders. There are many different types of dividend-paying stocks to choose from. Of course, the higher the yield on these equities, the higher the risk profile (usually).
That said, there a number of high-quality dividend stocks worth considering in the high-yield space. Like every sector, these companies aren’t created the same. Accordingly, investors ought to be discriminating when picking stocks in the high-yield space.
Two of the top options I think are worth considering among higher-yield dividend stocks are SmartCentres REIT (TSX: SRU.UN) and Pembina Pipeline (TSX: PPL)(NYSE: PBA). Here’s why.
Top high-yield dividend stocks: SmartCentres REIT
SmartCentres REIT focuses on improving the lives of Canadians by planning and developing mixed-use, connected, and complete communities on existing retail properties. Recently, this company touched a new 52-week high of $33.48 and is trading right around this level. Despite rather strong capital appreciation, SmartCentres’s dividend yield still sits at around 5.6%. That’s truly incredible.
One of the reasons this is so impressive is that SmartCentres recently announced an annualized dividend of $1.85 per unit. This works out to a little more than $0.15 per month for investors to rake in. Accordingly, those looking for monthly dividends ought to like how this dividend is structured.
SmartCentres currently has a $15 billion program underway to focus on new construction within its portfolio. Those bullish on the real estate space, given the supply/demand fundamentals of this sector, may want to consider SmartCentres at these levels.
Recently, SmartCentres released its Q4 results, which showed strong performance from all aspects of its business. This REIT’s balance sheet appears strong and able to support continued dividend hikes over time. Occupancy rose to 97.6%, and cash collections improved and surpassed 98%.
All in all, this REIT looks well positioned to continue reshaping the Canadian urban-suburban and urban landscape.
Pembina Pipeline
Given the ongoing Russia-Ukraine conflict, much attention has begun to be paid to energy infrastructure. In the North American realm, Pembina is a key player in this regard.
This company offers midstream services and transportation for the energy sector. It operates via three segments: Facilities, Marketing & New Ventures, and Pipelines.
The organization provided its Q4 2021 earnings announcement on Feb. 24. Since then, Pembina stock has performed well, as investors digested relatively strong top- and bottom-line results. Indeed, EBITDA growth of 12% is noteworthy, in this otherwise stable sector.
Pembina’s dividend yield of 5.3% is well supported by its current earnings. On a forward-looking basis, this stock looks cheap. That’s because many experts expect Pembina’s earnings power to only increase over time.
Overall, I think Pembina is a cash flow-generating stock that many investors are ignoring right now. The reality is that Pembina’s dividend profile, among high-yield options, is one of the strongest right now.
