Amid the ongoing war between Russia and Ukraine, energy and food prices have increased, driving inflation. Despite multiple interest rate hikes over the last few months, the U.S. consumer price index rose 8.6% in May — a fresh 40-year high. The rising living costs could put pressure on households. So, amid the increasing expenses, investors can boost their passive income by investing in the following three high-yielding dividend stocks.
Enbridge
With an impressive track record of raising dividends and a high yield of 5.91%, Enbridge (TSX:ENB)(NYSE:ENB) is my first pick. Supported by reliable and predictable cash flows from its regulated assets or long-term contracts, the company has raised its dividend at a CAGR of over 10% for the last 27 years. Meanwhile, the rising energy demand could boost exploration and production activities, thus driving Enbridge’s asset utilization and financials.
Further, the company has planned to make a capital investment of around $10 billion from 2022 to 2025, expanding its midstream assets. So, amid the rising demand and its growth initiatives, Enbridge’s management projects its DCF/share to grow at an average annualized rate of 5-7%. So, the company is well positioned to continue its dividend growth.
NorthWest Healthcare Properties REIT
NorthWest Healthcare Properties REIT (TSX:NWH.UN) is another stock to have in your portfolio in this volatile environment due to its high dividend yield of 6.31% and stable cash flows. Given its highly defensive portfolio, long-term contracts, and government-backed tenants, the company’s occupancy and collection rates remain higher irrespective of the economy.
Additionally, the company is strengthening its position in the United States by acquiring 27 healthcare properties for $765 million. These properties currently have an average occupancy rate of 97%, with a weighted average lease expiry of 10.7 years. NorthWest Healthcare has an impressive project pipeline, with development opportunities of $2 billion. So, given its growth prospects and solid cash flows, I believe the company’s dividend is safe.
SmartCentres REIT
My final pick is SmartCentres REIT (TSX:SRU.UN), which owns and operates 174 properties spanning 34.7 million square feet of retail space. Its occupancy and collection rates currently stand at 97.2% and 98.5%, respectively. Meanwhile, the company earns around 60% of its revenue from stable, creditworthy, essential service tenants, which is encouraging. Walmart is one of its biggest tenants, contributing approximately 25% of its revenue.
SmartCentres has also announced Project 512, which will add 58.6 million square feet of retail space at an investment of $15.2 billion. The construction work for 28.6 million square feet of these investments could begin over the next five years. So, the company’s outlook looks healthy. Given its growth prospects, I believe the company is well positioned to continue paying dividends at a healthy rate.
Meanwhile, SmartCentres currently pays a monthly dividend of $0.154/share, with its forward yield at an impressive 6.49%.
Bottom line
The Canadian government initiated a Tax-Free Savings Account in 2009 to prompt its citizens to save more. It allowed Canadian citizens to earn tax-free returns on a specified amount called contribution room. If you were above 18 years by 2009, your cumulative contribution room would be $81,500 in 2022. So, if you invest that amount in any of these three stocks, you can earn a tax-free passive income of over $400 per month. This extra income could help reduce the impact of the rising prices.
