Want 6% Yield? The 3 TSX Stocks to Buy Today

These Canadian dividend stocks offer high yields of 6% and above, making them compelling investments for steady passive income.

| More on:
dividends can compound over time

Source: Getty Images

Investing in high-yield dividend stocks can help generate significant income over time. However, investors should take caution before investing in high-yield stocks and consider investing in shares of well-established companies with solid fundamentals and a growing earnings base. These companies will most likely sustain their high yield and pay consistent dividends in the coming years. Against this backdrop, here are three TSX stocks offering at least 6% dividend yields.

Enbridge

Enbridge (TSX:ENB) is a reliable, high-yield Canadian dividend stock. This energy infrastructure company has consistently raised its dividend by an average of about 10% annually over the past 29 consecutive years, which shows its commitment to rewarding its shareholders.

Besides paying and growing its dividend, Enbridge stock offers a high yield of about 6.4% based on its closing price of $57.04 on October 24, which is well covered through its growing distributable cash flows (DCF).

The energy company’s financials are supported by its extensive liquid pipeline network and long-term contracts. Enbridge benefits from the high utilization of its assets, power-purchase agreements, and regulated cost-of-service tolling frameworks. These arrangements add stability to its operations and financials and help generate solid earnings and DCF per share regardless of commodity or economic cycles.

Enbridge expects its EPS and DCF per share to increase at a mid-single-digit rate in the long run. This will enable the company to expand its earnings at low to mid-single-digit rates during the same period. While Enbridge’s organic growth will cushion its earnings, its strategic acquisitions and growing renewables portfolio will support its payouts.

BCE

BCE (TSX:BCE) is another reliable, high-yield TSX stock. Its ability to grow profitably in all market conditions supports its payouts. The Canadian communication giant has been known for paying and increasing its dividends for years. To be precise, BCE has raised its dividend for 16 consecutive years and offers a high yield of about 8.7%.

Competitive headwinds and macro challenges have weighed on BCE stock, driving its yield higher. However, its yield is sustainable given BCE’s growing earnings base and focus on efficiently increasing its customer base and managing promotions.

BCE’s extensive broadband fibre network, fast 5G mobile services, and cost-efficient promotions will enable it to grow profitably. In addition, BCE’s cost reduction measures augur well for earnings growth, driving higher dividend payments. The company is also expanding its capabilities in high-growth segments such as digital advertising, cloud computing, and cybersecurity services. This move is likely to bolster its financials and support its payouts.

Pizza Pizza Royalty

Investors can also consider Pizza Pizza Royalty (TSX:PZA) stock for high-yield earnings. The company, which operates and franchises a network of quick-service restaurants, offers monthly dividend payouts.

The franchisor is focused on returning higher cash to its shareholders. In 2023, Pizza Pizza announced three dividend increases, reflecting 10.7% growth. Currently, it offers an attractive yield of 6.9%.

Pizza Pizza Royalty distributes all of its cash to investors after retaining the required reserves. Thanks to its growing same-store sales and diversified income sources, including revenues through royalty income and food and beverage sales, Pizza Pizza has been growing profitably and distributing cash to its shareholders.

Its national footprint across Canada, omnichannel presence, growing network of restaurants, strategic menu pricing, and ongoing food quality and technology investments will likely bolster its cash flows and dividend payouts.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

More on Dividend Stocks

profit rises over time
Dividend Stocks

Buy 2,990 Shares of This Stock for $165.25/Month in Passive Income

A high-yield dividend stock can transform your investment into monthly passive income streams.

Read more »

close-up photo of investor Warren Buffett
Dividend Stocks

3 Warren Buffett Stocks to Buy Hand Over Fist in November

Warren Buffett has been buying Occidental Petroleum (NYSE:OXY) hand over fist. He previously owned the similar Canadian oil giant Suncor…

Read more »

dividend growth for passive income
Dividend Stocks

Is Intact Financial Stock a Buy for its 1.8% Dividend Yield?

Intact Financial's dividend is not that attractive, but its strong history of execution and dividend growth are compelling factors for…

Read more »

Hourglass and stock price chart
Dividend Stocks

Where Will Brookfield Stock Be in 5 Years?

Based on its recent successes, Brookfield Corp (TSX:BN) looks poised to be more valuable in five years' time than today.

Read more »

hand stacks coins
Dividend Stocks

The Smartest Dividend Stocks to Buy With $400 Right Now

The market is full of dividend stocks to buy. Here's a look at two options that cater to both growth…

Read more »

ways to boost income
Dividend Stocks

This Top TSX Dividend Stock Down 10.78% Is Ready for a Rebound

The rebound of an underperforming but top TSX dividend stock is coming due to a significant product diversification.

Read more »

Canadian Dollars bills
Dividend Stocks

3 Dividend Stocks to Supercharge Your Passive Income

These companies are known for their consistent payout histories and high yields can supercharge your passive-income portfolio.

Read more »

space ship model takes off
Top TSX Stocks

My 5 Favourite Stocks to Buy Right Now

There are plenty of great stocks on the market. Here's a look at my favourite stocks to own for growth…

Read more »