Regardless of where the market moves, investors can generate reliable cash from high-yield dividend stocks to supplement their income. While I admit that the current macro environment and uncertainty could keep you away from investing, keeping idle cash amid an inflationary environment is not doing any good to you.
So, if you seek reliable income, no matter where the market goes, consider investing in these three TSX stocks with high yields.
NorthWest Healthcare Properties REIT
As REITs (real estate investment trusts) have high payout ratios, they are a solid investment for investors eyeing reliable income and high yield. Among REITs, I am bullish about NorthWest Healthcare (TSX:NWH.UN) due to its high yield, solid track record of dividend payments, and defensive portfolio of healthcare-based real estate assets.
NorthWest’s payouts are supported through its high-quality tenants, who are backed by government funding. Moreover, NorthWest benefits from its long lease expiry term (about 14.1 years), which adds visibility over future cash flows and dividend payments. Also, its occupancy remains high (97.1%), while approximately 82% of its rents are inflation indexed.
Overall, the resiliency of its business, high payout ratio (95%), and an attractive yield of 6.2% make NorthWest Healthcare a solid investment. Moreover, its geographically diversified assets, robust development pipeline, acquisitions, and expansion in the U.S. market provide a solid foundation for future growth.
Enbridge
With a dividend-growth history of 27 years and a high yield of 6%, Enbridge (TSX:ENB)(NYSE:ENB) is a must-have dividend stock. Further, its strong DCF (distributable cash flow) per share and diverse cash flow streams (Enbridge has 40 cash flow streams) indicate that its payouts are well covered.
Enbridge not only paid but also raised its dividend amid the COVID-19 pandemic when most energy companies announced a cut during the pandemic.
Enbridge’s solid mix of conventional and renewable assets and contractual arrangements bodes well for dividend payments. Further, its inflation-protected earnings and solid secure capital program are likely to drive its future DCF/share and dividend payments.
Also, Enbridge’s strong backlogs, benefits from new projects, and solid long-term energy outlook is likely to support its financials. Enbridge targets a dividend-payout ratio of 60-70% of DCF/share, which is sustainable and well protected.
Keyera
Keyera (TSX:KEY) is the final stock on this list. Like Enbridge, Keyera has consistently enhanced its shareholders’ returns through dividend growth amid all market conditions. Its fee-for-service energy infrastructure business produces solid contracted cash flows that comfortably support its payouts and dividend growth. Also, it enables the company to fund its growth projects.
Looking ahead, Keyera’s solid fee-for-service business, strong balance sheet, ability to grow earnings, and focus on maintaining debt at lower levels augurs well for growth. Keyera’s DCF/share has grown at an annualized rate of 8% since 2008. Thanks to the growing DCF/share, Keyera has increased its dividend at an annualized rate of 7%.
Keyera offers a high dividend yield of 5.9% at current levels. Further, Keyera’s dividend-payout ratio of 50-70% of DCF is sustainable in the long term.
