3 High-Yield Dividend Stocks to Earn a Truckload of Passive Income in 2023

High-yield dividend stocks such as Keyera and Fiera Capital are well poised to deliver consistent returns to shareholders in 2023.

| More on:
top TSX stocks to buy

Source: Getty Images

One of the best ways to build wealth at an accelerated pace is by creating multiple sources of income. Few investors actually know they can easily begin earning passive income with a small amount of capital by holding a basket of dividend stocks in their portfolio.

In fact, buying high-yield dividend stocks is an easy way to generate additional income. Here are three such TSX stocks that may become passive-income machines in 2023.

An asset manager with a 9.8% dividend yield

One of Canada’s largest asset management companies, Fiera Capital (TSX:FSZ) ended the third quarter (Q3) with $158.3 billion in assets under management (AUM). Its AUM has grown from $29 billion in 2011 to $158 billion in the September quarter, allowing the company to consistently support higher dividend payouts.

In the last 18 years, Fiera has increased dividends at an annual rate of 7.4%. It currently offers investors a forward yield of 9.8%, which is among the highest on the TSX.

A volatile macro-environment will continue to hamper FSZ stock in the next 12 months. However, once the equity market stabilizes, investors will once again pour into this asset class, driving management fees and earnings higher for Fiera Capital.

Down 42% from all-time highs, Fiera Capital is trading at a discount of 10% to consensus price target estimates. After accounting for its dividend yield, total returns will be closer to 20% in the next year.

An energy heavyweight

An energy stock trading on the TSX, Keyera (TSX:KEY) is an energy infrastructure company with a sustainable dividend yield. Its robust base of cash-generating assets benefits from high utilization rates, allowing Keyera to improve cash flows consistently and fund organic growth initiatives.

Keyera’s distributable cash flow per share has grown at an annual rate of 8% since 2008. Comparatively, its dividend payouts have risen by close to 6% annually in this period. It currently offers investors a monthly dividend of $0.16 per share, translating to a tasty yield of 6.1%.

Keyera now expects its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to increase by 6% annually through 2025, which should support dividend increases in the future.

Its widening profit margins will also be used to reduce long-term debt, providing the company with even more flexibility to drive organic growth higher.

A TSX stock with a 8% yield

The final stock on my list is Canoe EIT Income Fund (TSX:EIT.UN), an investment fund that aims to maximize monthly distributions and capital appreciation by investing in a portfolio of top-quality assets.

EIT stock offers investors a yield of more than 8% and has returned 227% to shareholders in the last 10 years.

Canoe explained that it has a disciplined “bottom-up” investment process, allowing it to deliver consistent returns to investors. Its actively managed portfolio is focused on quality franchises and stable businesses that benefit from long-term growth.

The Foolish takeaway

Investing $25,000 in each of these three TSX stocks will enable investors to generate $6,000 in annual dividends, indicating an average yield of 8%. If the stocks are held in a Tax-Free Savings Account, the dividends will be exempt from federal or state taxes.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCY
Fiera Capital$8.772,851$0.215$613Quarterly
Keyera Corp.$31.52793$0.16$126.88Monthly
Canoe EIT Income Fund$13.871,822$0.10$182.2Monthly

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Fiera Capital and Keyera. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Business people standing near houses models
Dividend Stocks

Why Canadian Apartment Properties REIT Notched a 15% Gain in January 2023

CAPREIT may not look like a deal at the outset, but long-term growth projections would disagree – especially when considering…

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

1 Oversold Dividend Stock (With a 8% Yield) I’m Buying Right Now

Real estate investment trusts Northwest Healthcare offers investors a tasty dividend yield of almost 8%.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

2 Recession-Resistant Stocks to Buy for Steady Gains in 2023

Investors worried about a recession can look to buy utility stocks such as Hydro One and Waste Connections right now.

Read more »

Dial moving from 4G to 5G
Dividend Stocks

Down by 15%: Is BCE Stock a Good Investment in January 2023?

Few companies are truly “too big to fail,” but most market leaders are far more resilient against market headwinds or…

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Dividend Stocks

Looking for $200/Month in Alternative Income? Buy 530 Shares of This Stock

Do you want to earn $200 monthly alternative income for the next few years? Then accelerate your investments in this…

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Dividend Stocks

Deadline Coming: 3 TFSA Stocks to Buy Now Before Dividend Payouts

Invest in RNW stock and 2 other TFSA friendly names before this fast-approaching deadline to get the full 2023 dividend.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Passive Income: How to Earn Nearly $367 Per Month in Your TFSA Portfolio

Top TSX dividend stocks now trade at discounted prices for TFSA investors seeking passive income.

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Dividend Stocks

3 Stocks I’d Buy — But I’m Waiting for a Dip

After the recent bounce, It may be smart for investors to wait for a dip before they buy these solid…

Read more »