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Excessive-yield dividend shares get a nasty rap, and actually? A few of them deserve it.

When you’re an earnings investor who has been burned by a yield that regarded nice till it didn’t, you already know the drill: The quantity on the display is just nearly as good because the money movement behind it.

A sky-high yield can sign bother, particularly if the corporate pays greater than it earns or retains borrowing simply to mail out cheques. However a excessive yield can even present up for a less complicated motive: the market feels nervous, the inventory worth falls, and the dividend appears to be like greater on paper although the underlying money movement nonetheless holds up. The candy spot sits within the center, the place you get a pleasant yield and a enterprise mannequin that may truly help it.

TF

Timbercreek Monetary (TSX:TF) shouldn’t be a conventional working firm. It’s a mortgage funding company that lends to Canadian business actual property debtors, typically within the bridge-financing lane. During the last yr, the backdrop has shifted from “charges hold biting” to “charges lastly easing,” and administration has framed decrease floating charges as a tailwind for its typical lending technique whereas transaction exercise improves.

Within the fourth quarter of 2025, it reported internet funding earnings of $25.7 million and distributable earnings of $15 million, or $0.18 per share. It declared $0.17 per share in dividends within the quarter, which put the distributable earnings payout ratio at 95.3%. It additionally ended the quarter with internet mortgage investments of $1.239 billion and a weighted common rate of interest of 8.1% for the quarter. The headline internet outcome regarded ugly because it booked a internet lack of $1.1 million, however that was pushed by legacy asset resolutions, not a collapse within the core curiosity engine.

If it retains resolving legacy positions and redeploys into higher-quality new loans, the earnings capability can enhance whereas the month-to-month dividend stays intact. The market is already paying shut consideration to protection, so that you wish to watch distributable earnings, not simply accounting earnings. On valuation, the inventory presently trades round 16.7 instances trailing earnings, but additionally comes with actual property credit score threat you can’t ignore.

T

TELUS (TSX:T) is the extra acquainted type of dividend inventory. It runs Canada’s third nationwide wi-fi service, a big fibre community enterprise, and a rising digital well being platform, with TELUS Digital now handled as a part of the broader portfolio after its privatization. During the last yr, TELUS has leaned closely right into a easy promise: hold including clients, hold increasing margins, and hold deleveraging. It has additionally been extra cautious on capital allocation, together with maintaining the dividend at its present degree.

Within the fourth quarter of 2025, TELUS reported consolidated working revenues and different earnings of $5.3 billion. Web earnings for the quarter was $290 million and fundamental earnings per share (EPS) was $0.19, whereas adjusted internet earnings was $311 million and adjusted fundamental EPS was $0.20. Adjusted earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) sat round $1.8 billion and was primarily flat yr over yr. For the total yr, it reported consolidated money from operations of $4.9 billion and report free money movement of $2.2 billion, up 11%.

TELUS additionally gave traders a clearer map for 2026. It targets 2026 consolidated service income progress of two% to 4%, adjusted EBITDA progress of two% to 4%, capital expenditures of about $2.3 billion, and free money movement of roughly $2.45 billion, or about 10% progress. It additionally declared a quarterly dividend of $0.4184 per share and pointed to a long-term payout ratio guideline tied to free money movement, even because it prioritizes deleveraging.

Backside line

These two shares present why “excessive yield” doesn’t mechanically imply “unhealthy guess,” however provided that you give attention to what the yield is constructed on, not simply the quantity itself.

Right here’s what each might usher in from $7,000 in every.

That final level — that you must give attention to money movement protection over yield chasing — is one thing they arrive again to always in Inventory Advisor Canada. When you’re constructing a passive earnings portfolio, it’s price a glance.