High-yield dividend-paying stocks are compelling investments for investors seeking passive income. However, it is important to exercise caution while choosing such stocks, as not all high-yields are sustainable.
Thus, investors could buy shares of fundamentally strong companies with a growing earnings base and a proven history of dividend distributions and growth.
With that backdrop, here are five ultra-high-yield Canadian stocks to buy in June. These dividend stocks offer at least a 6.5% yield and can help you earn worry-free passive income.
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Enbridge
Speaking of ultra-high-yield dividend stocks, Enbridge (TSX:ENB) is undoubtedly a reliable investment. This Canadian energy infrastructure giant has consistently paid dividends for about 69 years. Moreover, it has increased its dividend for 29 consecutive years at a compound annual growth rate (CAGR) of 10%. Enbridge not only boasts a stellar dividend payment and growth history, but also offers an attractive yield of 7.4% based on its closing price of $49.48 on June 6.
The company’s stellar dividend growth history reflects its resilient business model and ability to grow earnings and distributable cash flows (DCF). The company’s diversified revenue stream, power-purchase agreements, and long-term contracts consistently drive its DCF per share in all market conditions, supporting its dividend payouts. Its earnings per share and DCF per share are forecasted to grow at a CAGR of approximately 5% in the long term, which indicates that Enbridge could increase its upcoming dividends at a mid-single-digit rate.
BCE
Investors looking for ultra-high-yield dividend stocks could consider BCE (TSX:BCE). The telecom company has enhanced its dividends for 16 consecutive years, with the latest increase of 3.1% for 2024. BCE offers an impressive yield of 8.5% based on the closing price of $47.16 on June 6.
BCE’s focus on growing its customer base, reducing costs, and improving efficiency positions it well to grow its earnings and dividend payments. Further, BCE’s focus on new growth areas of digital transformation and cloud and security services bodes well for future growth. Additionally, the company is leveraging its leading broadband networks and products and expanding its 5G services, which will likely increase its customer base, drive its financials, and support future dividends.
Scotiabank
Scotiabank (TSX:BNS) is another high-yield dividend stock investors could consider buying in June. This leading Canadian bank has been paying dividends since 1833. Further, Scotiabank’s dividends have grown at a CAGR of 6% in the past decade. BNS stock currently offers a compelling yield of 6.6%.
The financial services giant is focused on enhancing its shareholders’ returns through higher dividend payments in the future. Scotiabank’s exposure to high-growth markets, focus on diversifying its revenue streams, improving efficiency, and solid balance sheet will likely fuel its earnings and drive payouts.
SmartCentres REIT
SmartCentres Real Estate Investment Trust (TSX:SRU.UN) is a compelling high-yield stock for investors. Moreover, it offers monthly payouts. This real estate investment trust (REIT) has ownership interests in high-quality real estate properties and consistently generates robust same-property net operating income (NOI), which supports its payouts. The REIT offers a high yield of 8.1% based on its closing price of $22.83 on June 6.
SmartCentres’s high occupancy rate, top-quality tenant base, underutilized land bank, and solid pipeline of mixed-use projects suggest that the REIT could continue to generate solid NOI. This will enable the REIT to consistently return cash to its shareholders.
Pizza Pizza Royalty
Like SmartCentres, Pizza Pizza Royalty (TSX:PZA) offers a high dividend yield and monthly payouts. The company distributes all available cash to its shareholders after retaining reserves to maximize shareholders’ value. Pizza Pizza Royalty offers a monthly payout of $0.077 per share, translating into a high yield of about 7%.
The company operates quick-service restaurants under the Pizza Pizza and Pizza73 brands. Its growing store presence across Canada, higher pricing, and improving sales mix will likely drive its earnings and support higher monthly dividend payments.
