3 TSX Dividend Beasts With Yields of 6% or More

TSX is home to a lot of great dividend stocks that don’t just offer healthy yields, but also have sound financial backings that result in a solid sustainability potential.

Adam Othman

Adam is a value investor who is always on the hunt for fantastic undervalued companies that he can share with Motley Fool readers. He follows Warren Buffett and Charlie Munger's investment advice and has completed the Canadian Securities Course. When he's not investing, Adam can usually be found traveling or skiing.

Published March 30, 2022 7:23 am EDT

The TSX has a healthy collection of amazing dividend stocks, and the variety offers Canadian investors more options. You can go for stocks that offer more sustainability compared to a high yield, or you can go for slightly risky but highly generous dividend stocks. However, there are plenty of dividend beasts on the TSX that offer both.

A senior care company

Senior care, including nursing and retirement homes, is a relatively healthy business, especially considering the rate at which the senior population of Canada is growing. This makes companies like Extendicare (TSX: EXE) amazing long-term holdings. The company offers multiple senior care services, including retirement living and home health care.

Even though Extendicare is a good pick from a capital preservation perspective, considering its performance since 2013, it’s the company’s dividends that attract most investors. It’s currently offering a juicy 6% yield. The payout ratio doesn’t inspire too much confidence as it has almost always been above a 100%, but the company hasn’t slashed its dividends once since 2014.

A commercial REIT

REITs are a no-brainer part of any comprehensive list of high-yield stocks in Canada. The commercial PRO REIT (TSX: PRV.UN) is one example of a dividend beast from this market segment. It’s currently offering a powerful 6.2% yield at a payout ratio of 85.6%.

The payout ratio has stabilized since the REIT slashed its dividends in 2020, which, while alarming, is almost a guarantee that another dividend cut might not come any time soon.

PRO REIT has a heavily industrial-leaning portfolio which is made up of about 120 properties, and the REIT boasts a decent occupancy rate. And the yield is quite attractive considering that the stock has almost recovered back to its pre-pandemic peak, and it’s not just a by-product of the slow post-pandemic growth phase.

A mortgage company

The financials sector has been on a tear since 2020, but not all stocks from the sector are following the same recovery/growth pattern. Atrium Mortgage (TSX: AI), for example, reached its recovery peak in June 2021, and since then, the stock has been sliding down at a very slow pace (about 3% depletion since then).

However, despite trading quite near its pre-pandemic peak, the stock offers a compelling 6.3% yield. The payout ratio of 91.4% is quite good, considering its payout ratio history. The mortgage company caters to residential and commercial customers and offers a wide variety of financing options that many conventional mortgage lenders (big banks) don’t.

Foolish takeaway

The three dividend stocks offering you a yield of more than 6% can help you start a decent-sized passive income. You can also opt for the DRIP and grow your stake in these companies, so when you do start taking out your dividends, you get a relatively thicker payment.