High-Yield Passive Income: 2 Stocks to Own Heading Into 2024

These top TSX dividend stocks look cheap right now.

| More on:
woman data analyze

Image source: Getty Images.

The pullback in the share prices of many top Canadian dividend stocks in 2023 is giving retirees and other investors seeking passive income a chance to get high yields from top TSX dividend payers before a potential market rebound next year.


BCE (TSX:BCE) is Canada’s largest communications company with a current market capitalization near $48 billion. The shares trade near $53 at the time of writing compared to $65 in May and above $73 at the peak last year.

The drop has mostly occurred as a result of rising interest rates. The Bank of Canada is trying to get inflation back down to its target of 2%. In October 2023 it was 3.1%, so progress is being made and the latest GDP report suggests the economy is slowing down as intended. This means rate hikes might be at an end and economists are starting to predict rate cuts in 2024 to avoid driving the economy into a recession.

BCE uses debt to fund part of its large capital program. Higher borrowing costs put a dent in profits. In fact, BCE expects earnings per share to dip in 2023. However, as rates begin to fall the negative impact should reverse and BCE continues to generate solid operating results, despite challenging economic conditions for its media business.

BCE expects to deliver on its 2023 guidance. Revenue and free cash flow for 2023 should be higher than last year, supported by the strength of the core mobile and internet businesses. Investors who buy BCE stock at the current level can get a 7.3% dividend yield. The board has increased the payout by at least 5% for 15 consecutive years.

Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS) trades near $60 per share at the time of writing compared to $93 at one point in early 2022. The drop has driven the dividend yield to 7%, which is high for a large Canadian bank.

Bank of Nova Scotia is expected to unveil a significant strategy shift in the coming weeks. This could involve monetizing some international assets. Bank of Nova Scotia has a large presence in Latin America with businesses in Mexico, Peru, Chile, and Colombia. These markets offer attractive long-term growth potential as the middle class expands, but they are also viewed by investors as being high risk due to political volatility and the reliance on commodity markets for big chunks of revenue.

Mexico will likely remain strategically important for the bank, but pundits speculate the other Latin America operations could get sold with the funds directed to other opportunities. The investor meeting on December 13 is expected to reveal the results of the strategic review conducted this year.

Bank of Nova Scotia remains very profitable, even as its provision for credit losses (PCL) is expected to rise in the coming quarters due to the impact of interest rate increases on borrowers. The bank has a solid capital position to ride out tough times, and the dividend should be safe.

BNS stock is arguably a contrarian pick today, but the long-term potential returns are attractive, and you get paid well to wait for the recovery.

The bottom line on top stocks for passive income

BCE and Bank of Nova Scotia pay good dividends that should continue to grow. If you have some cash to put to work in a portfolio focused on passive income, these stocks look cheap today and deserve to be on your radar for 2024.

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.

The Motley Fool recommends Bank Of Nova Scotia. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker owns share of BCE.

More on Dividend Stocks

A person builds a rock tower on a beach.
Dividend Stocks

CPP Pension: Boost Your Payouts by $5,232 per Year

You can raise your after-tax CPP by making RRSP contributions. Alimentation Couche-Tard (TSX:ATD) is a good RRSP stock.

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

3 No-Brainer Stocks to Buy With $20 Right Now

Here are three no-brainer stocks that are suitable for anyone getting started on their investing journey.

Read more »

growing plant shoots on stacked coins
Dividend Stocks

3 Top Dividend Stocks That Keep Raising Their Payouts

These three TSX stocks are ideal buy as they consistently raise their payouts, depicting their healthy financials.

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

This 5% Dividend Stock Pays Cash Every Month

This monthly dividend stock offers cash every month, but also returns that continue to climb higher from being in a…

Read more »

Solar panels and windmills
Dividend Stocks

How Much Will TransAlta Renewables Pay in Dividends This Year?

TransAlta Corporation’s (TSX:TA) acquisition of TransAlta Renewables stock holds significant implications for income-oriented investors who previously held this monthly dividend…

Read more »

Dividend Stocks

3 Stocks That Can Help You to Get Richer in the Next 5 Years

Consistent growth stocks with a relatively bright future are one of the most trustworthy ways to grow wealth.

Read more »

Dividend Stocks

3 Blue-Chip Stocks Every Canadian Should Own

These Canadian blue-chip stocks are backed by well-established businesses and a growing earnings base, enabling them to generate above-average returns.

Read more »

grow money, wealth build
Dividend Stocks

Is This 7.25%-Yielding Dividend Grower the Ultimate Income Stock?

This top Canadian dividend stock has increased the distribution annually for nearly three decades.

Read more »