A random screen that ranks Canadian dividend stocks’ yields in descending order may indicate some of the highest-paying tickers with yields approaching 14%. Such payouts indicate that, within as few as seven years, the companies would have effectively repaid investors their capital through dividends. However, given that equity claims are perpetual and so could be the dividends, double-digit dividend yields don’t make much sense to the companies paying them.
Given the choice, such companies would be better off borrowing in the debt markets rather than issuing expensive equity. Therefore, the moment you see a double-digit dividend yield on a stock, the yield should indicate significant risk to your capital. Such high-yield payouts are usually unsustainable. There’s no free lunch here.
That said, digging deeper into some of the highest-paying TSX dividend stocks could reveal a few tickers worth a second look. The three highest-paying dividend stocks on my radar today include TELUS (TSX:T) stock with a 9% payout, Allied Properties Real Estate Investment Trust (TSX:AP.UN) with a massive distribution yield, and Parex Resources (TSX:PXT), an energy stock paying an 8.3% dividend yield. Here is why passive income investors may wish to check them out right now.
TELUS
The telecom sector giant is a household name for millions of Canadians. Telus has long been considered a bedrock of domestic portfolios because of its essential services and strong market position. However, the stock has been battered recently, pushing its dividend yield toward a historically high 9%.
The selling point for TELUS stock is its cash flow resilience. Even in a recession, Canadians will likely pay their internet and phone bills before almost anything else. Telus also continues to expand its fiber network and 5G capabilities, ensuring it remains competitive against rivals including Rogers and BCE.
The risk to the dividend, however, is real. The company’s payout ratio has been stretched, often exceeding free cash flow in recent quarters due to heavy capital expenditures. Management recently cut capital investments and believes the dividend’s free cash flow payout is within the target 60% to 75% range. If TELUS’s dividend yield remains this high for too long, management may be tempted to prune it towards industry averages.
Investors looking for high-yield Canadian dividend stocks to buy now could still consider TELUS stock, for its blend of high income and defensive stability, provided management can steer the ship back to free cash flow growth in 2026.
Parex Resources
Parex Resources stands out as a unique high-yield dividend stock offering on the TSX. Unlike many Canadian peers that sell their oil at a discount through tariffs-strewn U.S. trade routes, Parex produces oil in Colombia and sells its crude at prices pegged to a superior Brent Crude index. This pricing advantage usually results in stronger margins.
Currently, Parex Resources stock’s dividend yield is a tempting 8.3%. Its payout rate appears sustainable for now, primarily because the company maintains very little leverage. Its pristine balance sheet is management’s primary defence against volatility.
However, income investors should watch oil prices closely. Although Parex’s production fetches better prices, lower global oil prices could cripple its capital spending budget for 2026 if the market trends much lower. If that happens, the high-yield dividend could face a chop.
Allied Properties REIT
On November 17, the Allied Properties Real Estate Investment Trust announced a $0.15 per unit monthly distribution for December 2025. The office properties real estate investment trust (REIT) has maintained its monthly payouts through 2025, but the annualized yield has crept to an unbelievable 13.9%.
The REIT is struggling with lower occupancy rates. In-place occupancy rates at 84% by September 2025 were far below management’s targets for 90% by year-end, as leasing efforts suffered delays because tenants have been too slow to commit.
That said, the REIT nearly extinguished its variable interest debt during the third quarter and maintains a low debt ratio of 45%. However, management guides for adjusted funds from operations (AFFO) per unit to contract by 10% year-over-year in 2025. This threatens the distribution significantly during a time the trust is disposing of its non-core properties. The REIT’s most recent AFFO payout rate of 106.4% is extremely unsustainable.
Looking ahead, Allied Properties announced a significant long-term lease at one of its large properties, reducing the property’s vacancy to 10%. Perhaps 2026 brings better fortunes for investors who buy units at a current 66% discount to their recent net asset value (NAV) of $38.05.
