Investing in ultra-high-yield dividend stocks can power up your portfolio’s income potential. However, high yields may not be sustainable in the long run. Therefore, investors should exercise caution and consider buying fundamentally strong stocks with growing earnings bases and sustainable payouts.
Against this backdrop, here are two ultra-high-yield dividend stocks you can buy now and hold for a decade. These Canadian stocks offer a yield of at least 7%.
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Ultra-high-yield dividend stock #1
SmartCentres REIT (TSX:SRU.UN) is one of the top Canadian dividend stocks offering ultra-high yields. The REIT distributes a monthly dividend of $0.154 per share, equating to a high yield of approximately 7.2% based on its recent closing price of $25.65 (as of June 4). Moreover, its payouts are sustainable and support its resilient real estate portfolio, which consistently generates solid same-property net operating income (NOI).
The REIT’s resilient real estate portfolio is anchored by grocery-focused retail centres, which adds stability to its financials and drives same-property NOI. Moreover, it benefits from strong leasing momentum and a high occupancy rate. For instance, its occupancy rate stood at 98.4% as of the last reported quarter, reflecting its strong leasing momentum and tenant retention.
In addition to its high occupancy rates, SmartCentres benefits from a robust cash collection rate and experiences steady rental growth. The recent quarter saw a notable 4.1% increase in same-property NOI, reflecting increased tenant demand and successful lease renewals. Moreover, the REIT has already extended or finalized leases covering 68.4% of maturing agreements for 2025, with an 8.4% growth in rents excluding anchor tenants.
Looking forward, SmartCentres REIT remains well-positioned to sustain its dividend payouts. Its high occupancy rates and ongoing rental growth will drive same-property NOI and future payouts. Further, the REIT’s diversified portfolio of mixed-use properties will drive income. Moreover, its vast underutilized landbank and strong balance sheet augur well for growth.
Ultra-high-yield dividend stock #2
Telus (TSX:T) is another ultra-high-yield dividend stock you can buy and hold for the next decade. The leading wireless service provider has been rewarding shareholders with higher dividend distributions and currently offers an ultra-high yield. Moreover, its payouts are sustainable, implying investors can generate worry-free passive income from Telus stock in all market conditions.
Notably, since 2011, the company has increased its dividend 27 times through a consistent, multi-year growth program. Currently, shareholders receive a quarterly dividend of $0.416 per share, representing an exceptionally high yield of 7.4%. Telus is aiming to raise its dividend by 3% to 8% annually through 2028. Moreover, Telus maintains a disciplined payout ratio of 60–75% of its free cash flow.
The telecom giant remains committed to returning higher cash to its shareholders, given the expected moderation in capital expenditures, its ability to increase earnings and free cash flow, and its sustainable payout ratio.
Telus’s focus on revenue diversification and ability to expand its user base profitably bodes well for future growth. The company is maintaining a lower churn rate and focusing on reducing costs. This will likely drive earnings and support its future payouts.
On the infrastructure side, Telus continues to invest in its network by acquiring spectrum and upgrading its technology to enhance service quality and reliability. These enhancements will strengthen its competitive edge and drive long-term earnings growth, which in turn will support its ongoing commitment to delivering higher dividends.
