Investing in fundamentally strong, high-yield dividend stocks would be an excellent strategy for earning steady passive income regardless of market volatility. Against this backdrop, here are four bargain Canadian stocks with over 6% dividend yield to consider now.
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SmartCentres Real Estate Investment Trust
REITs (real estate investment trusts) have high payout ratios, making them attractive investment options for investors seeking dividend income. Among the top REITs listed on the TSX, investors could consider SmartCentres Real Estate Investment Trust (TSX: SRU.UN) for its high yield and discounted valuation.
SmartCentres owns a resilient portfolio of real estate assets that generate strong same-property net operating income, enabling it to easily cover its payouts. SmartCentres offers a monthly dividend of $0.154 per share, translating into a lucrative yield of over 8% based on its closing price of $22.75 on May 3.
SmartCentres’s top-quality tenant base, including large retailers, the high occupancy rate of about 98.5%, and solid tenant retention and renewal rates add resilience to its earnings. Moreover, its large and underutilized land reserve and strong, solid developmental pipeline comprising mixed-use properties augur well for future growth and will likely drive its payouts.
NorthWest Healthcare REIT
Investors could also consider NorthWest Healthcare Properties (TSX:NWH.UN) in the REIT space. The firm owns a defensive real estate portfolio of healthcare-focused assets. Notably, NorthWest stock has corrected significantly over the past year as the prolonged elevated interest rates took a toll on its financials and led the management to cut its dividend.
Nonetheless, NorthWest has taken initiatives to strengthen its business, deleverage its balance sheet, and enhance liquidity. Despite the dividend cut, NorthWest Healthcare stock currently offers a high yield of over 7%.
Its defensive real estate portfolio, high-quality tenant base backed by government funding, inflation-indexed leases, high occupancy rate of about 96%, and long lease expiry term add stability to its operations and will likely drive its cash flow and dividend payments in the coming years. Further, NorthWest stock is a bargain near the current levels.
Telus
Canadian telecom giant Telus (TSX: T) is a dependable dividend stock owing to its ability to generate profitable growth and management’s commitment to returning higher cash to its shareholders via its multi-year dividend-growth program. Although Telus stock has witnessed a pullback over the past year, its fundamentals remain strong.
Telus has paid around $20 billion to its shareholders via dividends since 2004. Moreover, the company has raised its dividend for 25 consecutive years. Telus’s ability to grow its customer base and operating efficiency will likely boost its earnings and cash flows and drive future payouts. Moreover, its investments in network infrastructure and the expansion of its 5G services bode well for growth.
Telus expects to grow its dividend by 7-10% through 2025. Moreover, it offers a high yield of 6.7%.
Pizza Pizza Royalty
Pizza Pizza Royalty (TSX: PZA) is another bargain bet for investors seeking high yields and regular income. The company operates quick-service restaurants through a franchise model under the Pizza Pizza and Pizza73 brands. Moreover, it distributes all of its available cash after retaining reserves, reflecting its commitment to providing higher returns to shareholders.
Pizza Pizza stock is trading cheaply and offers a high yield of nearly 7%. Further, it has raised its monthly dividend thrice in 2023, resulting in a total growth of 10.7%. Looking ahead, its growing store presence across Canada, higher pricing, and improving sales mix will likely drive its earnings and dividend payments.
