Dividend stocks can be powerful vehicles for long-term wealth creation, offering investors the potential to benefit from stock price increases and a steady stream of income. Reinvesting these dividends can further amplify total returns over time by harnessing the power of compounding. However, since dividend payments are ultimately discretionary, investors should look beyond headline yields and prioritize companies with established business models, resilient cash flows, and proven track records of sustaining and growing shareholder distributions.
Against this backdrop, the following two high-yield dividend stocks stand out as compelling opportunities for long-term investors. Let’s take a closer look at these two companies.
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SmartCentres Real Estate Investment Trust
REITs (real estate investment trusts) must distribute a significant portion of their taxable income to unitholders, making them attractive options for investors seeking reliable income. Against this backdrop, my first pick is SmartCentres Real Estate Investment Trust (TSX: SRU.UN), which owns and operates approximately 201 strategically located properties across Canada, representing a total gross leasable area of 35.5 million square feet.
SmartCentres benefits from a high-quality tenant base, with approximately 95% of its tenants having regional or national operations and nearly 80% providing essential goods and services. This resilient tenant mix helps support strong occupancy and dependable cash flows across economic cycles, enabling the REIT to maintain its monthly distributions. Its current monthly payout of $0.15417 per unit translates into an attractive forward yield of 6.55%.
The outlook for retail real estate also remains favourable, with limited new supply amid elevated construction costs supporting demand for existing retail space. SmartCentres is leveraging this environment to expand its portfolio, including a 200,000-square-foot Canadian Tire store in Toronto, which is scheduled for handover in the fourth quarter of this year, as well as two additional self-storage facilities in British Columbia that could become operational next year. Overall, the REIT has approximately 0.8 million square feet of properties under development, with another 87 million square feet in various stages of planning and development.
With a resilient tenant base, dependable cash flows, an attractive monthly distribution, and a substantial development pipeline, SmartCentres appears well positioned to deliver sustainable income and long-term growth, making it an appealing choice for income-focused investors.
Peyto Exploration & Development
Another high-yield dividend stock that investors could consider buying and holding for the next decade is Peyto Exploration & Development (TSX: PEY), which produces natural gas and natural gas liquids in Alberta. Its low-cost operating model, long-life reserve base, disciplined capital allocation, and efficient operations have enabled consistently strong financial performance. Over the past 27 years, Peyto has generated an average return on capital employed (ROCE) of 17% and an average return on equity (ROE) of 24%.
This robust financial performance has also allowed Peyto to reward its shareholders through consistent dividend payouts. Since 1998, the company has distributed approximately $3.5 billion in dividends, or $24.63 per share. Its forward dividend yield currently stands at an attractive 5.8%.
Looking ahead, Peyto could benefit from stronger oil and natural gas prices amid ongoing geopolitical uncertainty in the Middle East. The company is also investing to expand and optimize its production capabilities, with planned capital expenditures of $450 million to $500 million this year. These investments could support drilling 70–80 net wells and optimize its infrastructure through gathering and plant debottlenecking projects. Management is targeting annual production growth of 5% to 10% in the long run, which could help generate the cash flow needed to fund capital investments, maintain dividend payments, and reduce debt.
Furthermore, Peyto’s approximately 1.5 billion barrels of oil equivalent in proved and probable reserves provide a substantial inventory of future development opportunities. This deep reserve base could support sustained production growth and strengthen the company’s long-term financial performance, creating a solid foundation for continued shareholder returns and future dividend payouts.
