Ultra-high-yield dividend stocks are top options for investors looking to generate a regular cash inflow through investments. While these stocks are compelling bets to start a passive income stream, investors should take caution, as high yields may not sustain in the long run. Thus, investors could consider adding Canadian stocks with solid fundamentals, a growing earnings base, and sustainable payouts. These stocks are reliable investments that generate worry-free passive income.
Against this background, here are two ultra-high-yield dividend stocks to buy and hold for a decade.
Ultra-high-yield dividend stock #1
Among the leading Canadian stocks offering ultra-high yields, investors could consider SmartCentres REIT (TSX:SRU.UN). Known for its strong dividend payment history, SmartCentres currently offers a monthly payout of $0.154 per share, translating to an impressive yield of about 7.5% based on its closing price of $24.73 (as of December 26, 2024).
The REIT’s dividend payments are supported by its ability to generate solid net operating income (NOI) across all market conditions. Its portfolio consists of high-quality real estate that continues to witness solid demand from both new and existing tenants. Notably, it owns a diverse portfolio of properties, primarily grocery-anchored shopping centres in higher-traffic areas. This adds resilience to its performance, even during economic downturns, leading to higher cash collection and occupancy rate.
SmartCentres REIT has a high occupancy rate of about 98.5%. Its high occupancy rate, increased leasing activity, and solid tenant mix will likely drive rental income and cash collections. Further, SmartCentres has diversified its revenue streams through mixed-use developments integrating residential, self-storage, and industrial properties, positioning it for long-term growth. With long-term tenant contracts, high retention rates, and a substantial land bank, SmartCentres remains well-equipped to generate solid NOI, which will drive its future dividend payments.
Ultra-high-yield dividend stock #2
Investors looking for ultra-high-yield dividend stocks could consider adding Enbridge (TSX:ENB) to their portfolio. The energy infrastructure company has uninterruptedly paid dividends for about seven decades and raised its dividends for 30 consecutive years at a CAGR of 10%. Enbridge’s payouts reflect the resiliency of its business and management’s commitment to enhancing shareholder value through higher payouts.
Enbridge stock offers a quarterly dividend of $0.945 per share, reflecting a compelling yield of over 6% based on its current market price. Thanks to its diversified revenue streams and high-quality assets, the company is well-positioned to maintain and grow its dividend. Enbridge’s extensive pipeline network, connecting key supply and demand regions, operates at high capacity, generating steady earnings and distributable cash flow (DCF), which supports its dividend growth.
In addition, Enbridge’s long-term contracts and regulated tolling frameworks provide a stable foundation for reliable growth. The company is also expanding its renewable energy assets, positioning itself to capitalize on future energy demands. Moreover, strategic acquisitions will further enhance its cash flow and support long-term growth.
Looking ahead, Enbridge plans to launch multi-billion-dollar projects that will significantly expand its earnings base, supporting continued dividend increases. Moreover, with a payout ratio target of 60–70% of DCF, the company’s high yield remains well-protected. Enbridge expects steady, mid-single-digit growth in earnings and DCF per share in the long term, which will enable it to grow its dividend in line with its DCF growth rate.
