The Bank of Canada has slashed interest rates twice this year, and investors expect one more rate cut this year. Amid falling interest rates, investing in high-yielding dividend stocks has become one of the excellent strategies to boost your passive income. Meanwhile, the following three stocks offer over 6% of dividend yields, thus making them ideal buys for income-seeking investors.
Enbridge
Enbridge (TSX:ENB) would be one of the top dividend stocks to have in your portfolio due to its stable cash flows, consistent dividend payments, high yield, and healthy growth prospects. The midstream energy company earns around 98% of its cash flows from long-term cost-of-service, take-or-pay contracts, thus delivering stable and predictable cash flows irrespective of the macro environment. Amid its healthy cash flows, the company has paid dividends for 69 years and has raised them for the previous 29 years at an annualized rate of 10%. Its forward dividend yield stands at an attractive 6.9%.
Further, Enbridge is progressing with its $24 billion secured capital program and plans to deploy $6-$7 billion of capital this year while putting $4 billion of projects into service. Further, after acquiring two natural gas utility assets in the United States, the company is working on acquiring the third asset, which the management expects to close the deal this quarter. These acquisitions would make Enbridge North America’s largest natural gas utility company, thus reducing its business risks and improving its cash flows.
The company’s financial position also looks healthy, with its net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) ratio at 4.7. Considering all these factors, I believe Enbridge is well-positioned to maintain its dividend growth, thus making it an excellent buy.
NorthWest Healthcare Properties REIT
NorthWest Healthcare Properties REIT (TSX:NWH.UN) is my second pick. The real estate investment trust (REIT) owns and operates 186 healthcare properties across seven countries, with a total leasable area of 16.1 million square feet. It has signed long-term lease agreements with government-backed clients. The weighted average lease expiry of these agreements stands at 12.9 years. So, it enjoys a healthy occupancy and collection rate of 96% and 99%, respectively. Further, around 85% of its lease agreements are inflation-indexed, thus shielding its financials from rising prices.
Further, NWH had adopted a non-core asset sales program to lower its leverage and strengthen its balance sheet. Under this program, the company has sold 46 assets, generating around $1.4 billion. The company has utilized the net proceeds from these sales to pay off high-interest-bearing debt, thus lowering its interest expenses and improving its profitability. Moreover, the company is investing in next-gen assets that could deliver long-term earnings growth for unit holders. Furthermore, it offers an attractive forward dividend yield of 6.92% while trading at a price-to-book multiple of 0.7, offering an excellent buying opportunity.
Pizza Pizza Royalty
Pizza Pizza Royalty (TSX:PZA) has adopted an asset-light business model, operating Pizza Pizza and Pizza 73 brand restaurants. It collects royalties from its franchisees based on their sales. So, its financials are less susceptible to commodity price increases and wage inflation, thus generating healthy cash flows irrespective of the broader market conditions.
After posting 12 consecutive quarters of positive same-store sales, PZA’s same-store sales fell 3.9% in the June-ending quarter. The company has blamed the challenging macro environment for the decline. Meanwhile, given its high-quality and value-oriented menu offerings, it hopes to retain its existing customers and win new ones. PZA is expanding its restaurant network and projects its restaurant count to increase by 3-4% this year. Considering all these factors, I believe its future dividend payouts are safer. Meanwhile, it currently offers a forward dividend yield of 7.20% and trades at an attractive next-12-month price-to-earnings multiple of 13.2.
