Dividend stocks can be an effective way to build long-term wealth, offering opportunities for capital appreciation and a steady stream of passive income. Reinvesting dividends can further accelerate wealth creation by harnessing compounding. However, dividend payments depend on a company’s financial performance, cash flow generation, and capital allocation priorities. As a result, investors should prioritize well-established businesses with resilient operations, healthy cash flows, and a consistent history of rewarding shareholders.
Against this backdrop, let’s explore three high-yield dividend stocks that could be worthwhile additions to a long-term investment portfolio.
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Enbridge
Enbridge (TSX: ENB) stands out as an attractive dividend stock for long-term investors, backed by predictable cash flows, a resilient business model, and an impressive dividend-growth history. The diversified energy infrastructure company generates about 98% of its earnings from regulated assets and long-term take-or-pay contracts, with nearly 80% linked to inflation. This stable revenue base helps Enbridge maintain consistent financial performance and generate reliable cash flows, even amid challenging macroeconomic conditions.
Reflecting its strong cash flow generation, Enbridge has paid dividends since 1953 and has increased its payouts for 31 consecutive years. Its current quarterly dividend of $0.97 per share translates into an attractive forward yield of approximately 5.6%, making it appealing to income-seeking investors.
Beyond its dividend strength, Enbridge is expanding its asset base through a $41 billion secured capital investment program, with several projects expected to enter service through 2030. These investments should strengthen its earnings base and support management’s target of approximately 5% annualized growth in earnings and cash flow through 2030. Backed by these growth initiatives and stable underlying operations, the company expects to generate substantial shareholder distributions, targeting $40 billion to $45 billion in capital returns through 2030. This combination of reliable cash flows, attractive dividend income, and visible growth prospects makes Enbridge a compelling option for long-term investors.
SmartCentres Real Estate Investment Trust
SmartCentres Real Estate Investment Trust (TSX: SRU.UN) is another high-yield dividend stock that could appeal to long-term income-seeking investors. The REIT owns and operates 201 strategically located properties across Canada, covering 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 approximately 80% providing essential services. Long-term lease agreements also support stable occupancy and rent collection, contributing to predictable financial performance. Backed by this resilient business model, SmartCentres has maintained consistent dividend payments since 2002. Its monthly distribution of $0.15 per unit translates into an attractive forward yield of approximately 6.8%.
Looking ahead, resilient demand for Canadian retail space, coupled with limited new supply due to elevated construction costs, could support the REIT’s growth. SmartCentres is expanding its portfolio, with approximately 0.8 million square feet of properties currently under construction. More importantly, its development pipeline offers significant long-term growth potential, with approximately 87 million square feet of potential developments at various stages of planning and execution. These opportunities could support future rental income and strengthen its asset base. Given its stable occupancy, established tenant relationships, and substantial development pipeline, SmartCentres appears well positioned to support its distributions and deliver consistent income to long-term investors.
Bank of Nova Scotia
Bank of Nova Scotia (TSX: BNS) is another dividend stock worth considering for long-term investors, supported by its diversified business model and long history of rewarding shareholders. The bank provides a broad range of financial services across multiple markets and generates revenue from diversified business segments. This diversified operating model supports stable cash flow generation and has enabled Scotiabank to pay dividends consistently since 1833. Moreover, the bank has increased its dividend at an annualized rate of approximately 4.5% over the past decade. Its current forward yield of 3.5% further enhances its appeal to income-seeking investors.
Looking ahead, a rising interest rate environment could support Scotiabank’s core lending business by improving net interest margins, although the overall impact will depend on funding costs and credit conditions. Meanwhile, the bank is strategically reshaping its business portfolio by expanding its more profitable North American operations while reducing its exposure to less profitable Latin American markets. This shift could improve operational efficiency, strengthen earnings quality, and support sustainable long-term profitability.
Scotiabank is also returning additional capital to shareholders through share repurchases. The bank recently increased its share buyback authorization from 15 million to 40 million shares, which could reduce its outstanding share count by about 3.3%. This move could further enhance shareholder returns by boosting earnings per share. Considering its established dividend history, diversified operations, and ongoing strategic initiatives, Scotiabank appears well positioned to sustain dividend growth and deliver attractive long-term shareholder returns.
