When a stock offers a 7.7% dividend yield, a C$10,000 investment can generate approximately C$770 in annual income — which sounds quite enticing. However, the higher the yield, the greater the risk tends to be. Once a company cuts its dividend, the share price often falls along with it, turning that high yield into a wealth trap.
The core issue lies in how to correctly calculate the dividend yield. The most reliable method is to annualize the latest declared regular payout and divide it by the current share price, rather than simply using historical data from the past 12 months — the latter can be distorted by including dividends that have since been cancelled or are no longer sustainable. After excluding ETFs, split-share corporations, special dividends, and illiquid penny stocks, three TSX-listed names currently stand out with higher yields worth examining: BTB REIT (BTB.UN), Allied Properties REIT (AP.UN), and BCE (BCE).
BTB REIT: Industrial transition paying off, strongest coverage
BTB REIT (TSX:BTB.UN) owns industrial properties, necessity-based retail, and suburban office assets. The company has recently continued to increase its exposure to industrial real estate, including the acquisition of three fully leased properties in Alberta, which are expected to add approximately C$2.5 million in annualized net operating income (NOI). Second-quarter rental revenue rose 4.5%, while adjusted funds from operations (AFFO) reached C$0.098 per unit, with the corresponding AFFO payout ratio improving to 76.5%. At the current share price of C$3.91, the units trade at a roughly 30% discount to net asset value per unit of C$5.56. However, its total debt ratio stands at 58.1% and occupancy is only 91.3%, leaving limited room for operational missteps.
Allied Properties: Deepest discount, but greatest payout pressure
Allied Properties REIT (TSX:AP.UN) holds distinctive urban office properties in major Canadian cities. The company has secured approximately C$321 million in 2026 property-sale proceeds, including firm transactions, with the cash earmarked for debt reduction. Current leased area stands at 86.7%, and the C$9.38 unit price sits about 51% below the reported net asset value of C$18.97. But this deep discount does not come without a cost — second-quarter same-asset net operating income fell 12.6%, net debt was 12 times adjusted EBITDA, and the adjusted AFFO payout ratio reached 105.7%. The company itself expects distributions to exceed available cash in the near term, so another reduction cannot be ruled out.
BCE: Broadest business, improved dividend coverage
BCE (TSX:BCE) operates wireless, fibre internet, and media businesses. The acquisition of Ziply Fiber added a U.S. growth platform, while ongoing cost cuts helped wireline adjusted EBITDA margins expand by 110 basis points to 42.7% in the latest quarter. Reported revenue rose 1.5%, although it declined 2% excluding Ziply. At the current price of roughly C$30.86, BCE trades around 8.8 times the midpoint of its 2026 adjusted earnings guidance. The quarterly dividend of C$0.44 is far better covered after the 2025 reset, yet leverage near 3.8 times EBITDA and aggressive telecom pricing remain real risks.
The trade-offs
BTB currently offers the strongest payout coverage, Allied the deepest discount, and BCE the broadest business diversification. None deserves a purchase based on yield alone. Investors may consider starting with a smaller position, adding to it after subsequent results validate the thesis, and using a diversified portfolio to turn an enticing payout into a more durable source of long-term income.
