Investing in high-yield dividend stocks with sustainable payouts can help generate solid recurring income regardless of market conditions. Further, adding a few high-yield dividend stocks to your portfolio could be a smart strategy now, as interest rates are expected to decline, and these investments are likely to offer better yields. So, for investors seeking high-yield Canadian stocks, here are my top picks providing at least a 7% yield.
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BCE stock
BCE (TSX:BCE) is a compelling dividend stock worth buying now for high yield and a solid history of dividend payments and growth. Canada’s leading communication company is known for enhancing shareholder value through higher dividend payouts. Notably, BCE has raised its dividend for 16 years in a row. Further, BCE stock offers an impressive yield of close to 11%.
BCE’s exceptionally high yield stems from a recent dip in BCE’s share price, driven by competitive pressures and broader macroeconomic challenges. Further, BCE announced it will hold its annual dividend steady at $3.99 per share through 2025. This decision, while strategic, was met with disappointment, causing the stock to decline and pushing the yield higher.
The pause in dividend growth is tied to BCE’s acquisition of Ziply Fiber, a move aimed at expanding its footprint in the underserved U.S. fibre market. While the decision unsettled investors, this acquisition positions BCE for long-term growth by enhancing its scale, market diversification, and revenue potential.
Further, BCE is poised to benefit from investments in fibre network upgrades and fast mobile 5G services. The momentum in digital advertising, cloud computing, and security services also bodes well for its future performance. Moreover, its strategic efforts to grow its subscriber base and optimize costs should improve profitability, paving the way for dividend growth down the line.
SmartCentres REIT stock
Another top TSX stock worth considering is SmartCentres REIT (TSX:SRU.UN). This real estate investment trust (REIT) rewards its shareholders with resilient payouts and high yields. It offers a monthly dividend of $0.154 per share, reflecting a high yield of 7.3%.
Notably, SmartCentres owns and manages a well-diversified portfolio of real estate that witness high occupancy and lease demand. Thanks to its defensive and solid assets portfolio, the REIT has been able to generate higher rental growth and cash collections, as well as solid same-property net operating income (NOI), which supports its payouts.
SmartCentres’s occupancy rate will likely remain high in the coming years, driven by growing tenant demand for more locations. Further, continued contribution from its core retail business and mixed-use development portfolio will likely generate high-quality income across all provinces, enabling it to pay higher monthly dividend payments.
Pizza Pizza Royalty stock
Pizza Pizza Royalty (TSX:PZA) is another attractive, high-yield Canadian stock that returns significant cash to its shareholders. The company operates and franchises a network of quick-service restaurants. It distributes a monthly dividend of $0.077 per share and offers an impressive yield of over 7%.
The company’s focus on improving guest traffic and driving the average customer cheque will likely drive its same-store sales and lead to higher earnings and distributions. Further, expanding its restaurant network and strategic menu pricing initiatives will enhance its financials.
The company’s ongoing investments in food quality and operational efficiency are expected to bolster its cash flows and enhance its dividend payouts. Additionally, Pizza Pizza’s in-store pickup channel is gaining traction, and the company is broadening its reach through third-party food delivery platforms. These channels are likely to bolster its growth rate and support its dividend distribution.
