Canadians planning to buy high-yield dividend stocks could consider investing in Telus (TSX: T), SmartCentres REIT (TSX: SRU.UN), and Enbridge (TSX: ENB). These companies have solid fundamentals, a growing earnings base, and a solid track record of dividend payments. Let’s dig deeper to understand why these three high-yield dividend stocks are screaming buys right now.
Image source: Getty Images
Telus stock
Canadian telecom giant Telus is one of the top TSX stocks to buy now for high-yield and reliable dividend payments. Telus’ leading network infrastructure, bundled product offerings, growing customer base, and focus on efficiency enable the company to grow profitably and enhance its shareholders’ value through higher dividend payments.
Since 2004, Telus has returned $21 billion to its shareholders through dividends. Moreover, Telus has increased its dividend through the multi-year dividend growth program. It currently pays a quarterly dividend of $0.389, translating into a high yield of 6.9% based on its closing price of $22.48 on October 2.
The communication company will likely increase its dividends by 7–10% per year under its multi-year dividend growth program. Moreover, its payout ratio of 60–75% is sustainable.
Telus’ investments in its PureFibre Network and 5G infrastructure will enhance its offerings and help grow its subscriber base. Further, Telus’ ability to maintain a low churn rate and drive higher average revenue per user (ARPU) will support its earnings. Additionally, Telus is venturing into high-growth sectors such as artificial intelligence (AI), digital transformation, and cybersecurity. These areas are expected to accelerate earnings growth and pave the way for higher dividends.
SmartCentres REIT stock
Canadian investors could consider investing in SmartCentres Real Estate Investment Trust for its high yield and monthly distributions. SmartCentres REIT owns and operates a wide range of real estate assets, including retail shopping centres and mixed-use properties. These properties attract consistent leasing demand, which helps maintain high occupancy rates and ensures steady cash flows. This financial stability is key to supporting the REIT’s monthly dividend payouts.
SmartCentres monthly dividend stands at $0.154 per share, translating into a high yield of 7%.
SmartCentres’s solid real estate portfolio, top-quality tenants, long-term lease agreements, and high occupancy rate of 98.2% position it well to consistently grow its net operating income and drive its monthly payouts. Moreover, its ability to renew leases at higher rents, expansion into mixed-use developments, and substantial land bank augur well for growth.
Enbridge stock
Enbridge is a must-have stock in your income portfolio. Shares of this energy infrastructure company offer a high and resilient yield of 6.6%. Moreover, Enbridge continues to reward its shareholders with higher dividend payments.
Enbridge has uninterruptedly increased its dividend for 29 years and been paying dividends for over 69 years. Looking ahead, the energy company could continue to increase its dividends in line with its distributable cash flow (DCF) growth rate.
Enbridge’s diversified revenue, vast liquid pipeline, long-term contracts, power purchase agreements, and regulated cost-of-service tolling frameworks will drive its earnings and DCF. Over the long term, its earnings and DCF per share are forecasted to grow at a mid-single-digit rate, enabling Enbridge to increase its future dividend at a similar rate.
