The Bank of Canada’s interest rate cuts have led to lower yields across fixed-income products. However, Canadians could consider investing in top dividend-paying stocks with high and sustainable yields to generate steady passive income.
Notably, the TSX has several fundamentally strong dividend-paying companies with dependable payouts. Among reliable dividend payers, here are three Canadian stocks offering yields of at least 6%.
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High-yield stock #1: Telus
Telus (TSX:T) is known for rewarding shareholders with reliable dividends and a high yield. This Canadian communications giant has distributed more than $23 billion in dividends since 2004. Further, it has raised its payout multiple times since 2011, reflecting its commitment to consistent dividend growth.
Telus recently extended its multi-year dividend growth program, targeting annual increases between 3% and 8% through 2028. At its current quarterly payout of $0.416 per share, it offers a high yield of roughly 7.9%. While its yield remains high, Telus maintains a sustainable payout ratio of 60-75% of free cash flow.
The company’s focus on acquiring high-value, margin-accretive customers, reducing churn, and offering competitive bundles positions it for steady, profitable growth. Telus is also broadening its revenue base beyond traditional telecom operations. Its growing presence in digital solutions and ongoing strength in Telus Health augur well for growth. At the same time, ongoing efficiency improvements, the sale of non-core assets, and moderation in capital spending are expected to boost free cash flow, driving future dividend growth.
High-yield stock #2: Whitecap Resources
Whitecap Resources (TSX:WCP) is a dependable Canadian dividend stock offering a high yield. This oil and gas producer has been rewarding its shareholders with consistent monthly payouts. Since January 2013, Whitecap has distributed roughly $2.7 billion in dividends. Moreover, it offers an attractive dividend yield exceeding 6.8%, supported by a solid foundation of high-quality assets that continue to generate robust cash flow.
Looking ahead, WCP’s focus on increasing its infrastructure utilization will help generate higher profitability and cash flow. By optimizing its drilling programs and maintaining a strong focus on operational efficiency, Whitecap is enhancing its ability to produce steady earnings even in fluctuating energy markets. Whitecap’s diverse portfolio of oil and gas assets enables management to allocate investment to projects with the highest potential returns, laying the groundwork for sustainable growth.
Whitecap’s low leverage, solid inventory, and the recent acquisition of Veren are likely to bring additional scale and premium assets, boost production capacity, and drive its cash flow. In short, Whitecap is well-positioned to sustain its monthly distributions.
High-yield stock #3: SmartCentres REIT
SmartCentres REIT (TSX:SRU.UN) could be another solid addition to your portfolio of high-yield dividend stocks. The REIT pays a monthly dividend of $0.154 per share, yielding over 6.8%. Besides high yield, SmartCentres offers durable payouts, supported by its high-quality core retail assets, which experience high occupancy and strong leasing demand.
The REIT owns 197 properties strategically located at prime locations across Canada and witnesses steady customer traffic. This consistent footfall helps sustain high occupancy levels, drives leasing demand and rent, and provides stability to the REIT’s income stream. SmartCentres’s high-quality tenants, including large retailers, further enhance stability and drive higher rent collection and retention.
Beyond retail, SmartCentres is expanding into mixed-use developments, which will enhance its revenue base and add new growth avenues. Further, the REIT’s extensive landbank in major Canadian urban centres offers a long runway for future development projects, which could strengthen its income base over time and drive its payouts.
