Chasing Passive Income? These 2 Canadian Dividend Stocks Yield 9% and Can Back It Up

High-yield dividend stocks get a bad rap, and honestly? Some of them deserve it.

If you’re an income investor who has been burned by a yield that looked great until it didn’t, you already know the drill: The number on the screen is only as good as the cash flow behind it.

A sky-high yield can signal trouble, especially if the company pays more than it earns or keeps borrowing just to mail out cheques. But a high yield can also show up for a simpler reason: the market feels nervous, the stock price falls, and the dividend looks bigger on paper even though the underlying cash flow still holds up. The sweet spot sits in the middle, where you get a nice yield and a business model that can actually support it.

TF

Timbercreek Financial (TSX:TF) is not a traditional operating company. It’s a mortgage investment corporation that lends to Canadian commercial real estate borrowers, often in the bridge-financing lane. Over the last year, the backdrop has shifted from “rates keep biting” to “rates finally easing,” and management has framed lower floating rates as a tailwind for its typical lending strategy while transaction activity improves.

In the fourth quarter of 2025, it reported net investment income of $25.7 million and distributable income of $15 million, or $0.18 per share. It declared $0.17 per share in dividends in the quarter, which put the distributable income payout ratio at 95.3%. It also ended the quarter with net mortgage investments of $1.239 billion and a weighted average interest rate of 8.1% for the quarter. The headline net result looked ugly as it booked a net loss of $1.1 million, but that was driven by legacy asset resolutions, not a collapse in the core interest engine.

If it keeps resolving legacy positions and redeploys into higher-quality new loans, the earnings capacity can improve while the monthly dividend stays intact. The market is already paying close attention to coverage, so you want to watch distributable income, not just accounting earnings. On valuation, the stock currently trades around 16.7 times trailing earnings, but also comes with real estate credit risk you cannot ignore.

T

TELUS (TSX:T) is the more familiar kind of dividend stock. It runs Canada’s third national wireless carrier, a large fibre network business, and a growing digital health platform, with TELUS Digital now treated as part of the broader portfolio after its privatization. Over the last year, TELUS has leaned heavily into a simple promise: keep adding customers, keep expanding margins, and keep deleveraging. It has also been more cautious on capital allocation, including keeping the dividend at its current level.

In the fourth quarter of 2025, TELUS reported consolidated operating revenues and other income of $5.3 billion. Net income for the quarter was $290 million and basic earnings per share (EPS) was $0.19, while adjusted net income was $311 million and adjusted basic EPS was $0.20. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) sat around $1.8 billion and was essentially flat year over year. For the full year, it reported consolidated cash from operations of $4.9 billion and record free cash flow of $2.2 billion, up 11%.

TELUS also gave investors a clearer map for 2026. It targets 2026 consolidated service revenue growth of 2% to 4%, adjusted EBITDA growth of 2% to 4%, capital expenditures of about $2.3 billion, and free cash flow of roughly $2.45 billion, or about 10% growth. It also declared a quarterly dividend of $0.4184 per share and pointed to a long-term payout ratio guideline tied to free cash flow, even as it prioritizes deleveraging.

Bottom line

These two stocks show why “high yield” does not automatically mean “bad bet,” but only if you focus on what the yield is built on, not just the number itself.

Here’s what both could bring in from $7,000 in each.

That last point — that you should focus on cash flow coverage over yield chasing — is something they come back to constantly in Stock Advisor Canada. If you’re building a passive income portfolio, it’s worth a look.