The Bank of Canada has recently cut the key interest rate by 0.25%, bringing it down to 2.5%. The drop in interest rates often means lower yields from fixed-income assets such as bonds and savings products, making it harder to generate higher income. In this environment, dividend-paying stocks with high yields appear to be an attractive option.
Canadian companies that consistently pay and grow their dividends can offer investors both income and long-term value. Investors should focus on businesses with payouts that are sustainable, supported by strong fundamentals, and backed by a history of reliable growth.
With this background, here are two high-yield stocks with durable dividends and stable underlying businesses. These stocks have the potential to deliver worry-free income, even as interest rates continue to slide.
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High-yield dividend stock#1: Telus
Shares of Canadian communications company Telus (TSX:T) could be a solid addition to your portfolio as interest rates drop. Its robust dividend payment history, high and sustainable yield, and visibility over future dividend growth make it a solid passive income stock.
Telus has distributed more than $23 billion in dividends since 2004 and raised its payout 27 times in the last 14 years. Its current quarterly dividend of $0.416 per share translates into a compelling 7.6% yield. Moreover, it targets a sustainable payout ratio of 60-75% of free cash flow.
Looking ahead, Telus’s growth strategy provides a solid foundation for continued dividend growth. Its investments in PureFibre and 5G networks give it a competitive edge in both broadband and wireless services, supporting subscriber growth and keeping customer churn under control. Telus is focused on attracting margin-accretive customers, which strengthens its ability to fund future dividend increases.
Telus is also diversifying beyond its traditional telecom operations. The company has seen notable traction in connected devices, driven by growing demand for Internet of Things (IoT) solutions. Meanwhile, Telus Health has emerged as one of its fastest-growing segments, providing an additional revenue stream.
Operational efficiency is likely to cushion Telus’s bottom line. As its profitability improves and capital expenditures begin to ease, Telus plans to raise dividends by 3% to 8% annually through 2028. In short, Telus is a dependable income stock amid low interest rates.
High-yield dividend stock#2: Enbridge
Enbridge (TSX:ENB) is another high-yield dividend stock investors can rely upon amid a low-interest-rate environment. This energy transportation and distribution company has been paying dividends for over 70 years. Furthermore, it uninterruptedly increased its dividend for 30 years at a compound annual growth rate of 9%.
Enbridge operates one of the largest pipeline networks in North America, moving crude oil, natural gas, and liquids between critical supply and demand hubs. With most of its earnings supported by regulated returns or long-term contracts, Enbridge is largely insulated from commodity price volatility, ensuring predictable cash flow. Roughly 80% of its EBITDA is protected by regulatory mechanisms or revenue escalators, further shielding it from inflation and cost pressures.
Enbridge currently pays a quarterly dividend of $0.9425 per share, yielding over 5.5%. Management expects to return $40 to $45 billion to investors over the next five years while targeting mid-single-digit dividend growth. Moreover, it targets a sustainable payout ratio of 60-70% of distributable cash flow.
The company is also expanding its natural gas, utilities, and renewable energy footprint, positioning itself well to capitalize on rising demand from power generation and data centres. Overall, Enbridge is a reliable income play as interest rates drop.
