Dividend-paying stocks can play a pivotal role in long-term wealth creation by providing a recurring income stream alongside the potential for capital appreciation. However, dividend sustainability hinges on a company’s financial strength, consistent cash flow generation, and prudent capital allocation. Investors should therefore focus on businesses with resilient operating models, dependable cash flows, and a proven history of dividend payments to support sustainable income generation over time.
Against this backdrop, two high-yield dividend stocks stand out as compelling opportunities for long-term investors seeking passive income while building wealth.
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Enbridge
Enbridge (TSX: ENB) operates a diversified portfolio of more than 200 energy infrastructure assets spanning midstream, utilities, and renewable power. Its resilient business model benefits from long-term take-or-pay contracts and tolling arrangements in its midstream operations, low-risk regulated utility assets, and renewable energy projects backed by power purchase agreements. These features support predictable cash flows across commodity cycles and changing macroeconomic conditions. This financial resilience has enabled Enbridge to pay dividends since 1953 and increase its payouts for more than 31 consecutive years. Its current quarterly dividend of $0.97 per share translates into an attractive forward yield of 5.8%.
Looking ahead, rising oil and natural gas production across North America could further increase demand for Enbridge’s infrastructure and services. To capitalize on these opportunities, the company is advancing a $41 billion secured capital program, with projects scheduled to enter service through the end of this decade. With these investments, management expects adjusted earnings per share and distributable cash flow per share to grow about 5% annually through 2030. The company also plans to return $40 billion to $45 billion to shareholders over this period, providing a solid foundation for continued dividend growth.
Despite these favourable fundamentals, Enbridge shares have faced pressure in recent weeks amid rising interest rates and ongoing regulatory and legal uncertainty surrounding its Line 5 pipeline. As a result, the stock has declined about 16.5% from its 52-week high. For long-term investors, this pullback could present an attractive entry point to secure a healthy dividend yield while gaining exposure to Enbridge’s resilient cash flows and long-term growth opportunities.
SmartCentres Real Estate Investment Trust
Another high-yield dividend stock I believe long-term, income-seeking investors should consider is SmartCentres Real Estate Investment Trust (TSX: SRU.UN). The REIT owns 201 strategically located properties across Canada, encompassing approximately 35.5 million square feet of gross leasable area. Its diversified tenant base is a key strength, with 95% of tenants having a national or regional presence and 80% providing essential services. This tenant mix supports healthy occupancy and rent collection rates, helping SmartCentres generate relatively stable cash flows across economic cycles. These resilient fundamentals have enabled the REIT to maintain consistent dividend payments since 2002. Its current monthly distribution of $0.15 per unit translates into an attractive forward yield of 6.8%.
Meanwhile, limited new retail property supply, driven partly by elevated construction costs, has created a favourable environment for established retail-focused REITs. SmartCentres is capitalizing on these conditions by expanding its portfolio and diversifying its property offerings. The REIT is developing a 200,000-square-foot Canadian Tire store, which it expects to hand over in the fourth quarter of this year. It is also advancing self-storage projects in Burnaby and Victoria, building on the successful openings of facilities in Montreal and Laval. Overall, approximately 0.8 million square feet of properties are under construction, supporting future rental income growth.
Beyond its ongoing projects, SmartCentres has approximately 87 million square feet of potential development in various stages of planning and execution, providing a substantial pipeline of long-term growth opportunities.
With a resilient tenant base, dependable cash flows, an attractive distribution yield, and an extensive development pipeline, SmartCentres appears well positioned to sustain distributions and grow its asset base over time. I believe the REIT is worth considering for long-term investors seeking reliable passive income and potential capital appreciation.
