Canadians are feeling the heat when it comes to their finances. In these moments, stable income becomes more valuable than ever. That’s why a stock like Labrador Iron Ore Royalty (TSX: LIF), with its sky-high 10.42% dividend yield, is getting attention. So, let’s get into why.
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About LIF
LIF isn’t your typical mining stock. It doesn’t operate mines or build new infrastructure. Instead, it collects royalties. Specifically, it owns a 15.1% stake in the Iron Ore Company of Canada (IOC) and earns a 7% gross overriding royalty on all iron ore products IOC sells. This gives LIF a more predictable, cash-generating business model that isn’t as exposed to the ups and downs of mining costs and labour disruptions. It’s essentially getting a steady cut of IOC’s sales without footing the bill for operations.
This model served investors well. Even as the price of iron ore bounced around due to global demand changes, LIF continued to reward shareholders. In its most recent earnings report for the first quarter of 2025, the dividend stock reported net income of $21.2 million and earnings per share (EPS) of $0.33. That was a drop from $0.93 EPS in the first quarter (Q1) of 2024, mainly due to lower iron ore prices and reduced volumes shipped. But the dividend wasn’t cut. LIF paid out $0.50 per share, which annualizes to a yield of over 10% based on the current share price of $29.27.
A strong dividend
That’s what makes LIF a compelling dividend stock in a volatile market. Even with commodity swings, the company has a long history of paying high dividends. It may not pay every month, but between the quarterly payouts and occasional special dividends, it generates income regularly enough to offer real comfort to income investors. Its trailing 12-month dividend total is $3.05 per share, and the payout ratio sits above 140%, which shows the company prioritizes shareholder returns, even during weaker quarters.
In fact, if investors were to put their TFSA contribution room aside for 2025 towards LIF stock, that $7,000 could earn $730 in annual income at writing. That would come to $60.75 in monthly income!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | INVESTMENT TOTAL |
|---|---|---|---|---|---|---|
| LIF.TO | $29.27 | 239 | $3.05 | $728.95 | Quarterly | $6,997.53 |
Stable and growing
LIF’s structure also offers peace of mind. It carries no debt and ended 2024 with a strong cash position and net working capital of $29 million. That’s a rarity in the mining space, where debt-fuelled expansion is common. This conservative approach gives LIF breathing room when markets dip or demand falters. For Canadians dealing with economic uncertainty and job concerns, this kind of steady, low-risk income can make all the difference.
And while it’s true that LIF’s earnings are tied to iron ore prices, the long-term demand story is still intact. Steel production continues to rise, especially in developing economies. As the global economy eventually recovers, iron ore prices should find support, which could lift LIF’s earnings again. In the meantime, the generous dividend is more than enough to keep many investors patient. In this kind of climate, dividend income can act like a financial anchor. It provides cash in hand when you need it most and helps reduce the temptation to panic during market swings.
Bottom line
LIF might not be the flashiest stock on the TSX, but it’s one that pays you to wait. Whether you’re trying to supplement your income, reduce portfolio risk, or simply breathe easier during volatile times, it earns a spot on the watchlist. A 10.42% yield doesn’t come around every day, and in this economic environment, getting paid to hold on is a win.
