High-yield TSX dividend stocks with sustainable payouts are top investments for generating recurring income regardless of market conditions. What makes these Canadian stocks even more appealing now is the economic shift towards a lower interest rate environment. This transition is creating an opportunity for income-focused investors, as these dividend-paying stocks provide yields that outpace traditional savings accounts or bonds. So, for investors looking to buy reliable high-yield stocks today, here are my top picks offering at least 6% yield.
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Enbridge stock
Enbridge (TSX:ENB) is a no-brainer stock to earn high and sustainable yield across all market conditions. The energy infrastructure company’s highly diversified portfolio, contracted assets, low-risk cash flows, efficiency savings, and solid balance sheet position it well to consistently grow its earnings per share (EPS) and distributable cash flow (DCF). Its growing DCF per share supports higher payouts regardless of the economic and commodity cycles.
Thanks to its resilient business model and growing EPS and DCF, Enbridge has uninterruptedly paid dividends for over 69 years. Further, it increased its quarterly dividends for 29 consecutive years.
The company’s extensive liquid pipelines business is expected to be highly utilized for decades and generate attractive free cash flows. Further, optimization and low-cost expansion opportunities will drive the segment’s revenue and earnings, which, in turn, will support Enbridge’s overall financials.
Enbridge is also likely to benefit from predictable cash flows from its gas transmission and midstream business and growing utility footprint. Further, with its consistent investment in the sector, Enbridge is well-positioned to capitalize on renewable energy demand.
The company’s low-risk cash flows will support future dividend payments. In the long run, Enbridge projects its EPS and DCF per share to increase by about 5% per year, which will support higher dividend payments. While Enbridge will likely increase its future distributions, it offers a high yield of 6.1%.
Telus stock
Telus (TSX:T) is another high-yield TSX stock with solid fundamentals and sustainable payouts. The Canadian communication company has consistently rewarded its shareholders with higher dividend payments through its multi-year dividend growth program. Further, its payouts are supported by its ability to grow profitably.
Telus’s ability to grow its customer base, maintain a low churn rate, invest in strengthening network infrastructure, and improve efficiency support its earnings and dividend payments. In the past two decades, Telus has paid approximately $21 billion in dividends. Further, it remains well-positioned to enhance its shareholder value by growing its dividend at a high single-digit rate.
The company’s focus on expanding its 5G network, fibre footprint, and content augur well for growth. Moreover, its growing higher-margin user base, focus on lowering the cost to serve, and operating efficiency will drive its earnings and support higher dividend payments.
Pizza Pizza Royalty
Pizza Pizza Royalty (TSX:PZA) is another dependable, high-yield Canadian dividend stock. Known for operating and franchising a broad network of quick-service restaurants, the company has built a reputation for rewarding its shareholders with solid dividends.
The company distributes all available cash to investors after setting aside necessary reserves. This strategy supports higher dividend payouts. The company pays a monthly dividend and offers a high yield of over 7%.
Pizza Pizza continues to grow same-store sales, driven by increased customer traffic and higher average spending per visit. Further, efforts to expand its restaurant network will boost its revenue base. The company will also likely benefit from its strategic menu pricing and technology investments.
Further, Pizza Pizza is enhancing its in-store pickup options and leveraging third-party delivery platforms. These channels allow the company to reach a broader customer base and drive incremental sales, bolstering its cash flow.
