Dividend stocks can be powerful wealth-building tools, offering steady income and long-term capital appreciation. By reinvesting dividends, investors can further enhance returns through compounding. Additionally, dividend-paying companies often operate mature, well-established businesses with resilient cash flows, allowing them to withstand market volatility, sustain consistent dividend payments, and generate dependable returns across economic cycles.
With that in mind, here are three TSX dividend stocks that offer an average yield of 5.6%, making them attractive options for boosting passive income while adding stability to an investment portfolio.
Source: Getty Images
Enbridge
Enbridge (TSX: ENB) is a diversified energy infrastructure company with operations spanning liquids pipelines, natural gas transmission, regulated gas utilities, and renewable power generation. Its business model is designed to generate stable and predictable cash flows, with approximately 98% of its earnings supported by long-term contracts and regulated assets. In addition, about 80% of its earnings are protected by inflation-indexed mechanisms, reducing the impact of commodity price fluctuations and broader economic uncertainty.
This stability has enabled Enbridge to build an impressive track record of shareholder returns. The company has paid dividends for nearly 70 years and increased its dividend annually for the past 31 years. It currently offers a forward dividend yield of about 5%, making it an attractive option for income-focused investors.
Looking ahead, Enbridge continues to invest in growth opportunities to meet rising energy demand across North America. Its secured capital program, valued at roughly $40 billion, includes a range of pipeline, utility, and renewable energy projects scheduled to enter service through the end of the decade. These investments could drive earnings and cash-flow growth, supporting future dividend increases and enhancing Enbridge’s appeal as a long-term income investment.
SmartCentres Real Estate Investment Trust
SmartCentres Real Estate Investment Trust (TSX: SRU.UN) is another attractive option for income-seeking investors, offering a forward dividend yield of 6.1%. The REIT owns a portfolio of strategically located properties across Canada, with about 90% of Canadians residing within 10 kilometres of at least one of its properties. Its tenant base is also strong, with approximately 95% of tenants operating at the regional or national level and around 60% offering essential services.
Backed by its high-quality assets and resilient tenant mix, SmartCentres continues to maintain healthy occupancy levels. Combined with ongoing lease-up activities and higher rental rates, these factors have supported steady growth in its operating performance and cash flows, enabling the REIT to sustain its attractive monthly distributions.
Meanwhile, SmartCentres is expanding its portfolio, with 0.8 million square feet of properties currently under construction and an additional 87 million square feet in various stages of development. This extensive pipeline should support long-term earnings growth and cash-flow generation. Given its solid fundamentals, growth prospects, and attractive yield, SmartCentres could continue rewarding investors with reliable dividend income.
Peyto Exploration & Development
Peyto Exploration & Development (TSX: PEY) is my final pick for income-focused investors. The company operates primarily in Alberta’s Deep Basin, producing natural gas and natural gas liquids. Thanks to its efficient operations and disciplined capital allocation, Peyto has generated impressive long-term profitability, delivering average returns on capital employed (ROCE) and return on equity (ROE) of 17% and 24%, respectively, over the past 27 years.
Peyto’s long-term outlook is supported by its substantial reserve base of approximately 1.5 billion barrels of oil equivalent, which provides a solid foundation for future production and cash flow growth. The company also continues to invest in expanding its operations, recently allocating $150.5 million to capital projects, including drilling 23 wells and acquiring interests in 21 additional wells. These investments should help strengthen production levels and support future earnings growth.
Supported by its high-quality assets, strong operational track record, and ongoing development activities, Peyto appears well-positioned to sustain its dividend payments. The company’s current monthly dividend payout of $0.12 per share yields 5.9% on a forward basis.
