Investing in dividend-paying stocks can help you start a passive-income stream. Further, choosing stocks with high yields can significantly lower the payback period of your investment and help you beat inflation.
However, due to the uncertainty related to the dividend distributions, not all high-yield stocks are reliable investments. Therefore, investors should focus on companies with a proven track record of consistent or increasing dividend payouts. Additionally, it’s essential to evaluate the sustainability of the payouts over the long term. Above all, selecting stocks with a growing earnings base enables you to earn worry-free yield.
Against this backdrop, let’s zoom in on three high-yield Canadian stocks to buy right now.
SmartCentres Real Estate Investment Trust
Investors could consider investing in shares of SmartCentres Real Estate Investment Trust (TSX:SRU.UN) for a high and reliable yield. This REIT (real estate investment trust) distributes most of its earnings as dividends. With its portfolio of high-quality assets, strong fundamentals, consistent history of dividend payments, and monthly payout structure, SmartCentres is an appealing investment opportunity for passive-income investors.
Above all, SmartCentres offers a compelling yield of 7.9% based on a closing price of $23.54 on March 1.
It’s worth highlighting that SmartCentres’s resilient real estate portfolio generates strong same-property net operating income. This implies that its payouts are well-protected. Additionally, this REIT has a top-tier base and boasts an impressive occupancy rate of 98.5%. Furthermore, SmartCentres predominantly holds the fixed-rate debt, which offers insulation against high-interest rates.
The company is well-positioned to continue to return significant cash to its shareholders. Moreover, its development pipeline, comprising mixed-use properties and untapped land assets, will likely accelerate its growth and support future payouts.
Enbridge
Enbridge (TSX:ENB) is one of the most reliable high-yield stocks listed on the Canadian stock market. This Canadian energy infrastructure firm has a long-standing history of consistent dividend payments and growth. Additionally, Enbridge offers a high and well-protected yield.
For instance, this Dividend Aristocrat has consistently paid dividends for about 69 years. Further, it has increased its dividend for 29 consecutive years at an average annualized rate of 10%. The company’s payout history underscores the resiliency of its business model and its commitment to maintaining payments despite challenging circumstances.
Looking ahead, its diversified income streams, inflation-protected earnings, highly utilized asset portfolio, and contractual arrangement will drive its distributable cash flows (DCF) and cover dividend distributions. Besides dependable dividends, Enbridge stock offers a lucrative yield of 7.8%, near the current levels.
Telus
Telecom giant Telus (TSX:T) could be a solid addition to your income portfolio. The company consistently enhances its shareholders’ value through its multi-year dividend-growth program. For instance, Telus has distributed around $25 billion to its shareholders since 2004, with $20 billion coming in the form of dividends. Telus is committed to augmenting its annual dividend by 7-10% as part of its ongoing dividend-growth strategy.
Telus’s ability to grow its customer base and tight control over operating costs enables it to consistently grow its earnings and supports higher dividend payments. Further, its industry-leading wireless and PureFibre broadband networks act as catalysts to boost customer base and reduce churn rate.
Telus will likely benefit from the expansion of its 5G services and national broadband network capabilities. Moreover, its focus on improving efficiency will cushion its profitability and drive future dividends. It is currently offering a yield of 6.3%.
