Top dividend-paying stocks with high yields can be solid sources of passive income for Canadian retirees. Besides offering regular income, high yields act as a hedge against inflation. Fortunately, several Canadian stocks are renowned for paying and even increasing their dividends regardless of economic situation. The resilience of their payouts and high yields make them attractive investments for retirees to earn steady passive income.
With this backdrop, let’s look at three high-yield dividend stocks that can be retirees’ best friends. These companies have fundamentally strong businesses, a solid payout history, and a growing earnings base to support future payouts. Moreover, these stocks offer at least a 7% yield.
Enbridge
Enbridge (TSX:ENB) stock can be a reliable investment for retirees to earn a steady income. This energy infrastructure giant sports a stellar history of dividend payments. Moreover, the durability of its payouts makes Enbridge a solid income stock. Notably, Enbridge has paid dividends for 69 years and increased it for 29 consecutive years at a CAGR (compound annual growth rate) of 10%. Besides higher payouts, it offers a lucrative yield of 7.3%, based on the market price of $50.25 as of July 23.
Enbridge’s resilient business model and ability to grow earnings and distributable cash flows (DCF) in all market conditions support its stellar dividend payouts. Further, the energy company’s diversified revenue stream, power-purchase agreements, and long-term contracts position it to consistently grow its DCF per share, supporting its dividend payments.
Additionally, Enbridge’s payouts are well-covered and sustainable in the long term, as the company’s investments in conventional and renewable energy assets will likely expand its earnings base and help capitalize on future energy demand. Further, Enbridge’s earnings per share and DCF per share are expected to grow at a CAGR of approximately 5% in the long term. The growing earnings and cash flows provide a solid base for future dividend growth.
BCE
Shares of the leading Canadian telecom giant BCE (TSX:BCE) could be another solid bet for retirees to start a passive income stream. BCE is known for rewarding its shareholders with higher dividend payments. For instance, this telecom company announced a 3.1% increase in its dividends for 2024. Overall, it has raised its dividends for 16 consecutive years.
Besides enhancing its shareholders’ value through higher dividend payments, BCE stock offers an attractive yield of 8.9% based on the current closing price of $45.34.
The company’s focus on improving efficiency via cost-reduction measures and growing its customer base positions it well to grow earnings in all market conditions. Further, it is leveraging its leading broadband networks and products to enhance its user base, which will likely increase its financials and payouts. Further, BCE is focusing on capitalizing on new growth areas such as digital transformation and cloud and security services. These initiatives bode well for future growth and will likely support its dividend distributions.
SmartCentres REIT
SmartCentres Real Estate Investment Trust (TSX:SRU.UN) could be a compelling high-yield stock for retirees because of its reliable dividend payments, high yield, and monthly payouts. The real estate investment trust (REIT) offers a monthly dividend of $0.154 per share, reflecting a high yield of about 7.6%.
SmartCentres’s payouts are supported by its higher concentration of retail-focused properties, which generate robust same-property net operating income (NOI) and add stability to its cash flows.
Further, its solid developmental pipeline of mixed-use properties augurs well for future growth. In addition, SmartCentres’s high occupancy rate, top-quality tenant base, and underutilized land bank position it well to generate a solid income, which will drive its payouts. It is also focusing on reducing debt and strengthening its balance sheet, which positions it well to capitalize on future growth opportunities.
