Who doesn’t love the idea of earning steady, high income from their stock investments? Whether the stock market is rallying or pulling back, high-yield dividend stocks tend to continue rewarding investors with consistent cash flow. This is because dividend-paying companies are usually established players with a strong track record of returning value to shareholders.
In this article, I’ll introduce you to two high-yield Canadian dividend stocks paying over 6% right now and explain why they could be excellent additions to your income-focused portfolio.
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Gibson Energy stock
The first high-yield dividend stock in my list is Gibson Energy (TSX: GEI). This Calgary-headquartered energy company mainly focuses on midstream oil and gas operations, which include storing, transporting, and marketing crude oil and refined products. After rallying by over 19% so far in 2024, GEI stock currently trades at $34.03 per share with a market cap of $3.9 billion. At this market price, it offers a 6.8% annualized dividend yield.
This impressive dividend yield of over 6% is backed by Gibson’s strong financial and operational performance as it continues to ensure stability even in a challenging economic environment.
For example, the company’s infrastructure segment, which now makes up over 85% of its business, registered a 7% year-over-year increase in its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) in the latest quarter ended in September 2024. As a result, Gibson’s adjusted EBITDA margin also expanded to 5.2% last quarter compared to 4.6% a year ago. This growth was mainly fueled by record crude volumes at its Edmonton Terminal, supported by connections to key pipelines like the Trans Mountain Expansion.
Another key factor that makes Gibson an attractive, high-yield dividend stock to buy now is its solid cash flow and disciplined approach to shareholder returns. Despite a slight dip in distributable cash flow in the most recent quarter, the company maintained a conservative dividend payout ratio of 65%. Moreover, Gibson’s strong portfolio of strategic assets across Canada and the United States could help it post strong financial growth in the coming years, which should also help its share prices appreciate in value.
Veren stock
Besides Gibson Energy, Veren (TSX: VRN), which was earlier known as Crescent Point Energy, could be a high-yield dividend stock Canadian investors may want to consider on the dip right now. After witnessing 22% value erosion year to date, VRN stock currently trades at $7.15 per share with a market cap of $4.4 billion. These declines, however, have made the company’s dividend yield even more attractive, currently at 6.2%.
Despite some production hiccups due to unplanned downtime and facility constraints this year, Veren has maintained a disciplined approach to capital allocation. In the third quarter, the company generated $114 million in excess cash flow and expects to achieve $625 million for the full year. Interestingly, it has managed to reduce its net debt by $1.3 billion so far in 2024, reflecting its focus on strengthening its balance sheet.
Moreover, Veren’s top assets, like Alberta Montney and Kaybob Duvernay, are continuing to pay off, with a strong performance from top-tier wells and efficiency gains in its drilling techniques, brightening its long-term growth outlook.
