2 High-Yield Dividend Stocks to Own for the Next 10 Years

Add these two TSX stocks to your self-directed portfolio to inject growth into the dividend income you generate towards substantial long-term wealth growth.

Key Points
  • Use your TFSA to build tax‑free passive income with dividend stocks, prioritizing high‑quality names that sustain payouts over time.
  • SmartCentres REIT (TSX:SRU.UN) delivers monthly distributions (~$0.154/unit, ≈6% yield) from a diversified, high‑occupancy retail/mixed‑use portfolio, while Enbridge (TSX:ENB) is a large‑cap energy/utility staple with decades of dividend hikes and stable cash flows.
  • For investors with a 10+ year horizon, a buy‑and‑hold TFSA allocation to these names can generate steady income and help withstand short‑term market volatility.

Investors seeking some extra money have plenty of ways to generate passive income in Canada. One of my favourite methods to generate extra income is by building a self-directed portfolio of high-quality dividend stocks and holding it in a Tax-Free Savings Account (TFSA).

Newer investors are typically wary of investing in high-yielding dividend stocks due to concerns that such high payouts are unsustainable for the underlying business. Besides focusing on high-yielding returns, it’s important to seek TSX stocks with solid fundamentals, sustainable payout ratios, and track records that support the ability to continue distributions without fail.

Considering these factors, I will discuss two high-quality dividend stocks that boast higher-than-average dividend yields you can consider adding to your portfolio.

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SmartCentres REIT

Real estate investing is a go-to choice for generating passive income, but most people do not have the massive cash outlay necessary to buy investment properties. Fortunately, Real Estate Investment Trusts (REITs) offer the ability to get monthly returns like a landlord without the cash outlay or hassle that comes with being one. SmartCentres REIT (TSX: SRU.UN) is an excellent example to consider.

SmartCentres is Canada’s largest fully integrated REIT. It has a solid history of distributing monthly dividends. As of this writing, SmartCentres REIT distributes $0.15 per unit each month, translating to an annualized dividend yield higher than 6% at writing. The trust has a diversified portfolio of mixed-use and retail properties across key markets in Canada, strong occupancy rates, and the ability to secure high rental income due to well-located properties.

The trust is already busy growing its extensive portfolio to unlock additional long-term value that can translate to better returns for investors in the next decade and beyond.

Enbridge

Enbridge Inc. (TSX: ENB) is a $171.2 billion market-cap energy stock that is a staple in many investment portfolios. Income-seeking investors love the stock for its reliable dividend distributions each quarter. To make things better, the dividend stock has been increasing payouts for more than three decades.

Dividend hikes are crucial for generating sustainable long-term wealth because the returns grow and keep pace with inflation. Enbridge is essentially a company in the energy sector that services other energy companies. Its extensive infrastructure transports a significant portion of natural gas and crude oil produced and consumed across North America. The company also has a growing utility business that generates predictable and stable cash flows, further improving its balance sheet.

Enbridge is well-capitalized, and it is a well-run company. With multiple long-term growth drivers supporting it, Enbridge stock can be an excellent holding in a self-directed investment portfolio.

Foolish takeaway

Investors seeking passive income for 10 years or more should focus on buying and holding assets that can perform well for the long haul. To this end, SmartCentres REIT and Enbridge stock have put up the kind of performances over the decades that can inspire confidence in long-term investors. Even if short-term market volatility impacts near-term returns, these companies seem well-positioned to outperform the broader market in the bigger scheme of things.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and SmartCentres Real Estate Investment Trust. The Motley Fool has a disclosure policy.

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