High-yield dividend stocks are a top investment to boost a portfolio’s income potential. However, a high dividend yield should not be the sole reason for buying a dividend stock. In some cases, a high yield can result from a declining share price, which may also signal that the company faces challenges and may not sustain its payouts.
For investors, dividend sustainability is therefore an important factor to evaluate. Rather than focusing only on yield, investors should consider TSX stocks with solid underlying businesses, strong distribution history, consistent earnings, and healthy cash flow generation. These characteristics can provide a stronger foundation for maintaining dividend payments over time.
SmartCentres REIT (TSX: SRU.UN) and Gibson Energy (TSX: GEI), for example, are two Canadian companies that offer relatively high dividend yields. But how dependable are their dividends, and do their business fundamentals support these payouts over the long term? Here’s my take.
High-yield dividend stock #1: SmartCentres REIT
SmartCentres REIT is a real estate investment trust (REIT). It offers a monthly dividend of $0.154, yielding about 7% based on its September 15 closing price of $26.69.
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While SmartCentres REIT offers a high yield, it also has a solid dividend payment history. Moreover, its distributions appear sustainable.
Its payouts are supported by a diversified real estate portfolio spanning retail and mixed-use properties that generate steady net operating income (NOI). As its diversified properties are concentrated in high-demand markets, it supports strong occupancy and leasing activity. The REIT also benefits from a solid tenant base, which supports its rental income and adds stability.
The REIT’s occupancy was 98.1% at the end of the second quarter, while rent collections remained very high. SmartCentres has also completed about 86% of its 2026 lease renewals, with renewed leases being signed at higher rents.
Overall, its strong tenant retention, double-digit rental-rate growth on renewals, and high occupancy should continue to support NOI and funds from operations (FFO) growth and drive payouts. With leasing conditions expected to remain favourable, these trends could provide a solid foundation for sustained NOI and FFO growth in future quarters.
Beyond its existing properties, the REIT has significant land holdings and a mixed-use development pipeline. These assets provide additional avenues for long-term growth.
High-yield dividend stock #2: Gibson Energy
Gibson operates a diversified portfolio of liquids infrastructure assets, including storage terminals, processing facilities, gathering systems, and waterborne loading services for crude oil and refined products, which drives steady cash flow and supports its distributions.
The energy infrastructure company has consistently rewarded its shareholders and has increased its dividend for seven consecutive years, reflecting strong earnings and cash flow. Further, GEI stock offers a high yield of 5.8%.
Gibson’s payouts are backed by its Infrastructure segment, which generates most of its earnings. Revenue from this business is largely secured through long-term, take-or-pay contracts with investment-grade customers. This contractual operating structure adds stability to earnings and cash flow and limits exposure to commodity price volatility, supporting dividend payments.
Gibson is well-positioned to sustain its payouts in the years ahead. The acquisition of Teine Energy’s Chauvin Infrastructure Assets expands its presence in Canada’s crude oil infrastructure market. Meanwhile, the Wink-to-Gateway Integration project is designed to strengthen connectivity across its network and improve operating efficiency. These projects are likely to boost the Infrastructure segment’s earnings, thereby supporting higher payouts.
The bottom line
SmartCentres REIT and Gibson Energy’s high yields are supported by stable businesses, reliable cash flows, and sustainable payout policies. While neither stock guarantees dividend payouts, their strong operating fundamentals and growth initiatives support future distributions. For income investors, these two TSX stocks are actually good.