Canadian investors love their high-yield dividend stocks — especially now, when inflation and interest rates remain elevated. That is, they were elevated. Inflation has come down, coming closer to the 2% goal by the Bank of Canada.
The thing is, the Bank of Canada is convinced enough that we’re headed towards that 2% rate. Therefore, June became the month we finally saw an interest rate cut. And what’s great is that stocks tend to end up with higher yields when shares drop during times of higher interest rates. Yet, as rates come down, shares go up. And those higher yields are no longer as prominent on the TSX today.
With that in mind, it’s time to look at two dividend stocks still offering high yields for investors. So, let’s get into two to consider buying right away.
SmartCentres REIT
Our first high-yielding dividend stock to consider is SmartCentres REIT (TSX:SRU.UN). SmartCentres real estate investment trust (REIT) offers an attractive dividend yield of 8.25% as of writing. The REIT pays monthly dividends, providing regular income to investors. Its current yield is supported by a strong portfolio of retail properties, primarily anchored by Walmart, which ensures stable cash flows and high occupancy rates of approximately 98.5%.
SmartCentres owns a high-quality portfolio of 193 properties across Canada, which includes significant retail space and mixed-use developments. The REIT’s focus on retail properties drives sustainable cash flows and boosts its occupancy rate, making its payouts reliable.
The dividend stock also has a strong pipeline of mixed-use developments and significant under-utilized land assets. This development pipeline is expected to drive future growth and support continued dividend payouts. Additionally, the REIT’s predominantly fixed-rate debt structure provides insulation against high interest rates, positioning it well for potential rate reductions in the future.
Finally, the company has demonstrated strength and growth in its recent earnings reports. Strong financial results with an 8.9% rental increase from lease extensions covering 4.4 million square feet. Same-property net operating income (NOI) grew by 3%, adding $4 million compared to the previous year. Funds from operations (FFO) per fully diluted unit reached $0.48, and net operating income increased by $5.9 million or 4.7%.
What’s more, the dividend stock is focusing on developing mixed-use properties with 10 projects under construction and six million square feet of zoned lands. Two projects were completed in the first quarter (Q1) alone. So, it’s certainly worth your consideration on the TSX today.
NorthWest
Then we have NorthWest Healthcare Properties REIT (TSX:NWH.UN), which is making a roaring comeback in terms of earnings. The dividend stock has a focus on healthcare real estate, including hospitals and medical office buildings. This sector is known for its stability and long-term leases, which contribute to consistent income.
Healthcare properties are considered a defensive asset class, less susceptible to economic cycles compared to other real estate sectors. This stability is attractive for income-focused investors, particularly during economic downturns.
The dividend stock now has a diversified portfolio across multiple countries, reducing regional risk and providing exposure to international healthcare markets. This diversification helps to maintain stable occupancy and income. It also comes through multiple acquisitions.
NorthWest stock has now seen consistent solid performance, driven by stable healthcare property investments. The REIT reported stable revenue from long-term leases with healthcare operators, supporting its consistent dividend payouts and high occupancy rates. And as it continues to expand, investors will certainly want to latch onto its 7.16% dividend yield as of writing.
