2 Stocks to Build a Strong Canadian Income Portfolio

These two Canadian dividend stocks offer investors two different ways to build dependable passive income while still keeping long-term growth potential in the portfolio.

Key Points
  • Keyera offers a 4.3% yield backed by an expanding fee-based Canadian energy infrastructure business.
  • SmartCentres REIT offers a 6.9% yield with monthly distributions and 98.1% committed occupancy.
  • Both TSX-listed companies are investing in growth projects that could support cash flow and income over the long run.

Building an income portfolio is a bit like building a house. While dividend yield gets your attention when you are a new investor, the foundation matters the most. If the business is weak, the payout could become harder to trust. On the contrary, if the company has dependable cash flow, useful assets, and a clear growth plan, the income could feel much more secure. That is why I prefer dividend stocks whose payouts are supported by something real underneath.

In this article, I’ll highlight two Canadian income stocks that could help create a stronger foundation for long-term passive income.

dividend stocks are a good way to earn passive income

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Keyera stock

If you want dependable income with exposure to the energy sector, you may want to add Keyera (TSX: KEY) to your portfolio.

This Calgary-based company operates an integrated energy infrastructure business that includes natural gas gathering and processing, natural gas liquids infrastructure, transportation, storage, and marketing. At the time of writing, KEY stock closed at $50.74 per share with a market cap of $14.9 billion. At that price, it offered a 4.3% annualized dividend yield.

Although the stock remains up 15% year-to-date, it fell about 16% in September. This weakness came after investors received a softer near-term outlook from the company.

Earlier in the month, Keyera lowered its 2026 Marketing segment realized margin guidance to between $320 million and $350 million from its previous range of $360 million to $390 million. The revision reflected the expected impact of the Line 5 disruption and lower anticipated production at the Alberta EnviroFuels facility.

Even with those temporary challenges, Keyera’s core fee-based operations continue to deliver encouraging results. In the second quarter, its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) advanced by about 6% year-over-year (YoY) to $267 million.

More importantly for income investors, the company’s fee-based realized margin surged 37% YoY due to an expanded asset base, strong utilization, and continued growth in contracted volumes. Encouraged by these results, Keyera also raised its quarterly dividend by 4.2% to $0.56 per share.

The company is now integrating the Plains’ Canadian natural gas liquids business while also benefiting from full ownership of KAPS.

With a 4.3% yield, a growing fee-based business, and an expanding infrastructure network, Keyera remains an attractive income stock to consider after its recent pullback.

SmartCentres REIT stock

Another income stock I find worth considering on the TSX today is SmartCentres Real Estate Investment Trust (TSX: SRU.UN), especially if monthly distributions are high on your priority list.

This Vaughan-based real estate investment trust (REIT) owns and manages shopping centres, offices, rental residences, and industrial properties across Canada. Its shares recently closed at $26.71 per unit, giving the trust a market cap of about $3.9 billion. At that market price, it offers a 6.9% annualized distribution yield and pays investors every month.

In the June quarter, SmartCentres’ in-place and committed occupancy reached 98.1%. The trust’s same-property net operating income inched up 2.6% YoY, or 4.4% when anchor tenants were excluded. The REIT also leased about 247,000 square feet of vacant space during the quarter, while rent growth on extended 2026 leases reached 12% excluding anchors.

Beyond its existing portfolio, SmartCentres is investing in retail, residential, and self-storage developments that could support future growth.

For income investors, SmartCentres’ 6.9% yield, monthly distributions, high occupancy, and expanding property portfolio make it an appealing stock to consider for a long-term Canadian income portfolio.

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

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