A smart investor knows that keeping cash idle depreciates your money, especially when high inflation is sticky. While your cash or savings in fixed deposits cannot beat inflation, investing in stocks can. The recent dip in the market has created an opportunity to lock in ultra-high yields of 8 to 12% in relatively safer dividend stocks. Generally, higher yield is associated with higher risk. While these stocks carry risk in a high-interest rate environment, they also have a stable long-term outlook.
Three ultra-high-yield dividend stocks that can give you $10,000 in passive income
Enbridge stock
Enbridge (TSX: ENB) stock has slipped 4.9% as oil prices fell below US$85. However, it does not impact its ability to pay dividends. The stock will remain slightly volatile in the short term as Enbridge takes on more debt to fund the acquisition of three gas utilities in the United States. However, the company has done its math and ensured the acquisition brings in stable cash flows and helps it service debt and increase dividends by 3% till 2026. Simultaneously, the company is building new gas pipelines. As they come into operation, they will increase cash flow, contributing to 5% dividend growth beyond 2026.
Enbridge’s low-risk business model (65 to 70% of distributable cash flow is paid as dividends) can help you earn inflation-adjusted passive income. As the stock is rangebound ($40-$57), you can invest a large amount when it trades near its low and lock in the ultra-high dividend yield, as the dividend will keep growing by 3% while your cost per share remains unchanged at $45.50. Enbridge’s yield is 8%, with a $3.66 annual dividend per share. Its dividend could increase to $3.88 (2026), increasing the yield to 8.5%.
Fiera Capital stock
Fiera Capital (TSX: FSZ) stock has slipped 5.8% along with the TSX. This investment management company’s performance depends upon the performance of equity markets. It earns revenue from base management fees it collects from public and private investors and performance management fees if the assets do well. When interest rates are high, equity tends to underperform as people don’t have enough liquidity to invest in stocks.
However, Fiera Capital enjoys relatively stable cash flows that have helped it pay regular dividends since 2010. It grew its dividends when the stock market performed well (2013-2019). However, its dividends have been stable since 2020 as the pandemic (2020-21), the tech bubble bursting (2022), and the high interest rates (2023) kept equity markets volatile.
In 2023, its dividends exceeded its free cash flow per share as the equity markets were weak. Fiera Capital’s stock price fell 47% between January and October 2023. However, a revival in the equity market when the Fed announced a pause in rate hikes in October sent the stock up 100% by March 2024. This stock can give you an 11.6% yield and capital appreciation if you buy the dip. It is still trading 40% below its average trading price of $10.5, making it a buy. It is a risky stock, but it also gives handsome returns.
Slate Grocery REIT
Slate Grocery REIT stock has slipped 4% in the last five days as hopes of interest rate cuts dimmed. The REIT earns all its rental income in US dollars from its 117 properties in America. The REIT has a dividend payout ratio of 81.1%, which hints that it can continue paying distributions.
How a $103,000 investment can give $10,000 in passive income this year?
| Details | Enbridge | Slate Grocery RFEIT | Fiera Capital | Total |
| Stock Price | $45.55 | $11.33 | $7.42 | |
| Dividend Per Share | $3.66 | $1.16 | $0.86 | |
| Invested Amount | $40,000 | $33,000 | $30,000 | $103,000.00 |
| No. of Shares | 878 | 2,913 | 4,043 | |
| Annual Dividend | $3,214.05 | $3,375.73 | $3,477.09 | $10,066.87 |
| Yield | 8.04% | 10.23% | 11.59% | 9.77% |
I have allocated a higher amount to Enbridge as it is safer than the other two. A $40,000 investment today can buy you 878 Enbridge shares that will pay $3,214 in annual dividends at $3.66 dividend per share. Similarly, you can buy 2,913 shares of Slate Grocery REIT for $33,000 and 4,043 shares of Fiera Capital for $30,000. Since the first four months’ dividend has already been distributed, you can earn $10,000 in dividends by April 2025.
