Investors seeking safe income could consider dividend stocks with sustainable yield and a resilient earnings base. These stocks are most likely to consistently pay and even increase their dividends, making them reliable investments. Against this background, here are three Canadian stocks with solid fundamentals offering ultra-high yields.
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Ultra-high-yield stock #1
Investors seeking stocks offering safe dividend income and ultra-high yields could consider Brookfield Renewable Partners (TSX: BEP.UN). The company invests in renewable power and sustainable solutions and is poised to capitalize on the growing demand for clean energy.
Its diversified renewable energy assets and highly contracted portfolio enable it to generate resilient earnings and cash flows that support its payouts. For instance, about 90% of its energy generation is secured through long-term contracts, and nearly 70% of its revenue is inflation-indexed. This setup provides a level of stability and supports its margins.
Brookfield Renewable Partners has increased its dividend for 14 consecutive years thanks to its predictable revenue base. Moreover, its annual dividend has grown by at least 5% yearly.
Brookfield stands to gain from its existing long-term contracts while also taking advantage of expiring agreements that can be renegotiated at higher rates. With the global shift toward clean energy, the company has secured new agreements at improved terms, supporting its funds from operations (FFO) and future payouts.
Brookfield’s large installed capacity and a robust pipeline of new projects ensure long-term growth. Moreover, its contracted power generation adds stability. Overall, Brookfield is well-positioned to increase its dividend in the coming years. Additionally, it offers an ultra-high dividend yield of over 6.5%.
Ultra-high-yield stock #2
Whitecap Resources (TSX: WCP) is another ultra-high-yield stock to consider for steady passive income. This energy company specializes in acquiring, developing, and producing petroleum and natural gas properties and assets, with a portfolio designed for stability.
Notably, its assets have stable production and low base declines, which enables it to generate predictable cash flow to support its monthly dividend payments. Whitecap Resources currently pays a monthly dividend of $0.061 per share, reflecting an ultra-high yield of about 9.1% near the current market price.
The company’s focus on high-condensate production, cost controls, and drilling efficiency contributes to its strong profitability. Further, with a strong balance sheet and low maintenance capital requirements, Whitecap is well-positioned to continue rewarding shareholders. In addition, its strategic mergers and acquisitions enhances its growth prospects.
Whitecap recently announced a merger with Veren (TSX: VRN) to create a leading light oil and condensate producer in key resource-rich areas like Alberta’s Montney and Duvernay formations. The merger will expand Whitecap’s asset base, increase its scale, and improve operational efficiencies. The combined company is expected to generate higher profitability and enhance shareholder value.
Ultra-high-yield stock #3
Firm Capital Mortgage Investment Corporation (TSX: FC) is another reliable stock offering safe dividends and ultra-high yield. This Canadian financial services company has been paying monthly dividends since 2013. Further, the stock offers a high annualized yield of about 8%, near the current market price.
Firm Capital specializes in short-term real estate mortgage loans and related debt investments. It generates significant earnings from interest, fees, and other stable income sources, which support regular payouts. Moreover, the company’s emphasis on real estate-backed assets and loan syndication enhances financial stability and reduces loan loss risks.
The company also benefits from its diversified portfolio of predominantly first mortgages and its solid underwriting capabilities. Further, its investment in market segments underserved by large lending institutions will likely generate steady cash flows and will support its dividend distributions in the coming years.
