High-yield dividend stocks present an opportunity to earn substantial passive income over time. Moreover, one can start investing in these stocks with as little as $400. So, for investors looking for stocks with attractive and sustainable yields, here are three fundamentally strong stocks to buy and hold forever.
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High-yield dividend stock #1
Investors seeking high yields can rely on Northwest Healthcare Properties REIT (TSX:NWH.UN). The real estate investment trust (REIT) distributes a monthly dividend of $0.03 per share, equating to a high yield of approximately 7.2%. Northwest Healthcare’s resilient portfolio of healthcare properties adds stability to its financials and drives same-property net operating income (NOI), which supports its payouts.
Further, Northwest Healthcare has high-quality tenants, including large hospital operators or healthcare practitioners supported by government funding. The REIT also benefits from a solid occupancy rate (96%), substantial rent collection, and long-term and inflation-adjusted leases.
Northwest looks well-positioned to capitalize on the increasing demand for healthcare infrastructure worldwide and drive sustainable growth. Aging populations and rising urban migration will drive demand for healthcare infrastructure. Additionally, Northwest Healthcare’s strategic initiatives to streamline its operations, including planned asset sales, augur well for growth. It is also reducing debt and focusing on optimizing its balance sheet, which will likely strengthen its financial position and support future dividend payouts.
High-yield dividend stock #2
Brookfield Renewable Partners (TSX: BEP.UN) is a reliable investment for investors seeking high-yield stocks. The company owns and operates renewable power assets and has consistently raised its dividends over the past several years. In the last 14 years, Brookfield’s dividend grew at a compound annual growth rate of over 5%. Moreover, it offers a high yield of about 6.5%, which is near its current market price.
This renewable energy company is on track to increase future dividends at a mid to high-single-digit rate. Its highly diversified portfolio of renewable energy assets, large installed capacity, and long-term, inflation-linked contracts position it well to generate solid cash flows, which will enable it to raise its future dividends.
Brookfield Renewable Partners will also benefit from the growing demand for clean energy, driven by the broader push toward electrification and the expansion of data centres. Brookfield’s strategic acquisitions will also help strengthen its position in the clean energy segment. Furthermore, the company’s extensive development pipeline and strong liquidity augur well for growth.
High-yield dividend stock #3
Pizza Pizza Royalty Corp. (TSX: PZA) is another high-yield Canadian stock investors could buy and hold forever. The company operates and franchises quick-service restaurants. It offers a monthly dividend of $0.077 per share, which equates to an attractive yield of about 7%, near the current market price.
Pizza Pizza’s dividend payments are supported by its diversified revenues, including royalty income and food and beverage sales. Further, its efforts to drive same-store sales by attracting more guests and increasing their average order value support its financials. Thanks to its solid financials and high payout ratio, Pizza Pizza returns significant cash to its shareholders.
The company is expanding its restaurant network and leveraging in-store pickup channels to drive revenues. It is using third-party food delivery platforms to broaden its customer base. All these measures are likely to drive its top line. It will also benefit from its ability to increase menu pricing and investments to improve food quality and operational efficiency. These measures are likely to boost its earnings, supporting its payouts.
