Investing in ultra-high-yield Canadian dividend stocks can significantly boost your portfolio’s income potential. While many stocks offer attractive yields, it’s crucial to remember that not all high-yield stocks can maintain their dividends over the long term. Therefore, investors should exercise caution and consider buying and holding fundamentally strong stocks having a growing earnings base and reliable payouts.
Against this backdrop, here are three 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
Speaking of ultra-high-yield dividend stocks, Northwest Healthcare Properties REIT (TSX:NWH.UN) could be a valuable addition to your portfolio. The REIT distributes a monthly dividend of $0.03 per share, equating to a high yield of approximately 7.3% based on its recent closing price of $4.96 (as of July 8).
The company specializes in healthcare real estate and operates a diversified portfolio of hospitals, outpatient centres, and medical office buildings across Canada and several international markets. Thanks to its recession-resistant business model, inflation-protected, long-term leases, and solid occupancy rates, the REIT generates stable same-property net operating income.
Moreover, Northwest’s strong tenant base, which includes large hospital operators and medical practitioners often supported by the government, provides stability to its portfolio. The REIT is also managing its balance sheet well by selectively selling non-core assets to reduce leverage.
Northwest Healthcare Properties REIT remains well-positioned to enhance its shareholders’ value through monthly payouts, owing to its solid defensive assets, steady income, and strong balance sheet. The aging population is expected to drive further long-term demand for healthcare services, which will benefit the REIT.
Ultra-high-yield dividend stock #2
Telus (TSX:T) is another ultra-high-yield dividend stock to buy and hold. It has consistently enhanced its dividend and maintains a reliable payout ratio of 60–75% of its free cash flow. This implies that its high yield is reliable.
The leading wireless service provider has increased its dividend 27 times since 2011. Moreover, its current quarterly dividend of $0.416 per share represents an ultra-high yield of 7.4%. Looking ahead, Telus plans to raise its dividend by 3% to 8% annually through 2028, making it a dependable stock to generate a growing passive income.
Telus’s ability to increase earnings and free cash flow, as well as the expected moderation in capital expenditures, will support its future payouts. Further, its 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, which will likely drive earnings and support its payouts.
In addition, Telus’ investments in its network and upgrading its technology to enhance service quality and reliability will support its growth. 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.
Ultra-high-yield dividend stock #3
Whitecap Resources (TSX:WCP) is another ultra-high-yield dividend stock you can buy and hold for a decade. The company acquires high-quality oil and natural gas assets, which support its growth. Further, its high netback, low decline conventional light oil assets’ portfolio enables it to generate significant cash flows, driving its monthly dividend payments.
Whitecap pays a monthly dividend of $0.061 per share, yielding approximately 7.7%.
Whitecap continues to expand its asset base while focusing on drilling optimization and reducing costs. These improvements will support margin expansion and future earnings, which in turn will drive higher dividend payouts.
Whitecap’s inventory of high-return drilling opportunities, with quick capital payback periods, provides a solid foundation for future growth. Further, the energy company’s low-leverage balance sheet and low-maintenance capital requirements offer the flexibility to capitalize on new growth opportunities and maintain sustainable payouts.
Furthermore, Whitecap’s strategic acquisitions will continue to help the company deliver solid growth, generate higher funds flow, improve operational efficiencies, and drive future earnings.
