While inflation has moderated from its peak, it remains high. Thus, having a few high-yield dividend-paying stocks in your portfolio is a must. Dividends boost your income to meet expenses. Moreover, the reinvestment of the dividends helps in creating wealth in the long term.
Thankfully, the Canadian stock exchange has several top stocks that offer high and reliable dividend yields, making them attractive investments in all market conditions to meet your income and investment needs.
I’ll focus on three Canadian stocks that offer at least 6% yields in this article. Moreover, these Canadian corporations have a solid track record of dividend payments. Also, as dividends are not guaranteed, I have focused on stocks from different sectors. This way, one can diversify their risk and create a stable passive-income portfolio. Let’s dig deeper.
Enbridge
Speaking of high yield and reliable dividends, Enbridge (TSX:ENB) tops my mind. The company transports oil and gas. Also, it has ownership interests in renewable energy facilities. Thanks to its high-quality asset base, Enbridge has a high utilization rate, which drives its DCF (distributable cash flows). Also, contractual arrangements and highly diversified revenue streams position it well to consistently enhance its shareholders’ returns through higher dividend payments.
Thanks to its resilient business and a growing DCF, Enbridge has been uninterruptedly paying dividend for over 68 years. Further, this energy company increased its dividend for 28 years.
Enbridge’s more than 40 diverse income streams, contracts to minimize price and volume risks, investments in conventional and renewable energy assets, and the multi-billion-dollar secured capital program will likely drive its DCF/share and dividend payments. Meanwhile, new assets placed into service will boost its near-term financials and payouts.
It offers a quarterly dividend of $0.887 a share, reflecting a dividend yield of 6.64% (based on the closing price of $53.43 on May 5). Furthermore, its dividend-payout ratio of 60-70% of DCF is well protected and sustainable.
SmartCentres Real Estate Investment Trust
From energy, let’s move towards real estate investment trusts, or REITs. Owing to their high payout ratio, REITs are a solid investment for investors seeking regular income. While the TSX has several top-quality REITs, we’ll restrict ourselves to SmartCentres Real Estate Investment Trust (TSX:SRU.UN). This fully integrated REIT has a solid tenant base and a best-in-class portfolio of 185 strategically located income-producing assets.
As SmartCentres focuses on commercial real estate, 60% of its rents are collected from essential service providers like the top retail companies and banks. While its tenant base remains strong, its properties sport a high occupancy rate of 98%, which adds stability and drives its cash flows. Further, most of SmartCentres’s debt is of fixed rate, thus safeguarding it against rising interest rates.
SmartCentres offers a monthly dividend of $0.154 per share, reflecting a stellar yield of 7.20% (based on its closing price of $25.7 on May 5).
Scotiabank
From REITs and energy, let’s turn toward Canadian banks. Notably, the large Canadian banks have been paying dividends for decades, making them a solid investment for regular income. Within the sector, investors could add Scotiabank (TSX:BNS) to their portfolios.
Scotiabank has been paying dividend since 1833. Further, its dividend increased at an average annualized growth rate of 6% in the past decade.
The financial services giant’s diversified revenue base, solid credit performance, and strong balance sheet drive its bottom line and dividend payments. The bank pays a quarterly dividend of $1.03 per share. Moreover, it offers a dividend yield of 6.16%.
