Investors looking for passive income could consider high-yield dividend stocks. While the TSX has several companies offering high yields, focusing on yield alone can be a risky bet. A better investment approach is to consider high-yield TSX stocks backed by solid fundamentals, a consistent history of dividend payments, resilient earnings, and payouts that can be sustained over time. This balance can help generate stress-free passive income.
With this context, here are two high-yield dividend stocks for stress-free passive income.
Source: Getty Images
High-Yield Dividend Stock #1: Enbridge
Enbridge (TSX:ENB) is a reliable high-yield stock for stress-free passive income. It has a long track record of paying and growing dividends through multiple economic cycles, making it a dependable income stock. Moreover, Enbridge stock currently offers an attractive yield of about 6.2%, supported by a sustainable payout ratio.
Enbridge has raised its dividend for 31 consecutive years, reflecting operational resilience and disciplined capital allocation. Moreover, Enbridge is well-positioned to continue growing its dividend in the coming years.
Nearly all of Enbridge’s earnings before interest, taxes, depreciation, and amortization (EBITDA) are generated from regulated assets or long-term, take-or-pay contracts. As a result, cash flows remain largely insulated from the volatility in commodity prices. In addition, about 80% of Enbridge’s cash flow is protected by regulatory mechanisms and inflation-linked adjustments. This operating structure drives its earnings, supporting its payouts.
Moreover, Enbridge targets paying out 60% to 70% of distributable cash flow (DCF), leaving ample room to fund growth and maintain balance sheet strength.
Looking ahead, Enbridge’s diversified revenue base and strength in core businesses will support its earnings and dividend growth. Management expects mid-single-digit growth in earnings and cash flow over the long term. Higher earnings and DCF will enable it to grow its dividend by a low to mid-single-digit range.
High-Yield Dividend Stock #2: SmartCentres REIT
SmartCentres REIT (TSX:SRU.UN) is a compelling passive income stock due to its durable dividend history, high yield of 7.1%, and monthly distributions. The REIT’s payouts are well supported by a high-quality real estate portfolio, including retail and growing mixed-use assets.
The REIT owns 197 properties across Canada, primarily located in high-traffic locations. These properties drive steady tenant demand, resulting in consistently high occupancy and steady rental income growth. SmartCentres’ focus on essential retail further strengthens its stability, as many properties are anchored by national retailers that tend to perform well even during economic slowdowns.
The REIT’s recent financial results indicate that demand for its properties remains high. In the third quarter, SmartCentres’ occupancy remained exceptionally strong at 98.6%, while rent collections held near 99%. Same-property net operating income continued to grow, supported by positive leasing activity and higher renewal rents. Excluding anchor tenants, NOI increased 4.6% during the quarter, highlighting the strength of demand for well-located retail space.
Beyond its core retail assets, SmartCentres is steadily expanding its mixed-use development pipeline. This strategy leverages its extensive land holdings to create new income streams over time. Combined with a solid balance sheet, these initiatives position the REIT to support its dividend while pursuing long-term growth.
