Investors can consistently generate stable passive income from dividend stocks, regardless of where the market moves. The TSX has several stocks that have maintained and increased their dividend, despite the difficult operating environment. Their resilient business and cash flow position them well to return solid cash to their shareholders. Meanwhile, they offer well-protected and high yields to beat inflation.
So, for investors eyeing a worry-free passive income, here are my top picks offering dividend yields of at least 6%.
SmartCentres REIT
With a high payout ratio, REITs (real estate investment trusts) are a popular investment for investors seeking solid passive income. Within the REITs space, investors can consider adding SmartCentres Real Estate Investment Trust (TSX:SRU.UN). It is one of Canada’s largest fully integrated REITs with a solid portfolio of income-producing assets.
What stands out is its high occupancy rate (97.2%) and solid tenants. It’s worth mentioning that most of its revenues come from Walmart (about 25% of its total revenue), and approximately 60% of its rents are derived from creditworthy essential service tenants (Walmart/grocery anchored). Meanwhile, its overall collection levels remain high (over 98%). This adds stability and supports its payouts.
It has consistently paid monthly dividends for over a decade and has delivered an average annual shareholder return of 13.3% since 2002. Further, investors can earn a high dividend yield of 6.4% by investing in SmartCentres REIT.
NorthWest Healthcare Properties REIT
My next pick is also from the REITs space. Besides SmartCentres, investors can consider adding NorthWest Healthcare (TSX:NWH.UN) to their passive-income portfolio for its high yield. Meanwhile, its defensive portfolio of healthcare-focused assets and ability to generate solid funds from operations support my investment case.
Like SmartCentres, NorthWest’s dividend payouts are backed by its high-quality tenant base. More than 80% of its tenants are supported through government funding. Further, its strategic relationships with hospitals and geographically diversified portfolios are positives.
Its operating metrics remain strong, with portfolio occupancy remaining high at 97%. Further, about 82% of its rents have inflation indexation, while its long lease expiry term of approximately 14.1 years adds visibility over future cash-generation capabilities.
Overall, NorthWest’s solid asset base, resilient cash flows, robust development pipeline, and attractive yield of 6.2% make it a solid passive-income stock.
Enbridge
Enbridge (TSX:ENB)(NYSE:ENB) stock needs no introduction. Its ability to pay and grow dividends makes it a must-have stock in your portfolio. Given its solid dividend payment record of 67 years and a dividend-growth history of 27 years, Enbridge is one of the safest stocks to bet on for passive-income investors.
Its diverse cash flow streams (has 40 cash streams), contractual arrangements, creditworthy clients, and inflation-protected EBITDA (about 80% of its earnings before interest, taxes, depreciation, and amortization are covered against inflation) drive its distributable cash flows (DCF) and dividend payments.
Its conventional and renewable assets, project backlogs, benefits from new assets placed into service, and a solid secured capital program bode well for future DCF growth.
Enbridge’s payout multiple of 60-70% of DCF/share is sustainable, while it offers a high yield of 6%.
