Top 10 Highest-Income ETFs and Stocks for Canadian Investors (2026)

From Enbridge paying dividends for 70 years to covered call ETFs yielding 21%, here is the complete Canadian income investor guide ranked by risk.

⚠️ This is educational content, not investment advice. Please consult a qualified financial advisor for guidance specific to your situation.

Not All Income Is Equal

Before anything else, one rule worth internalizing: a 9% yield and a 4% yield are not the same type of income. They are not even close to the same thing.

The 9% yield might be manufactured by writing options on a volatile stock, or it might be a warning sign that the stock price has collapsed and the market does not believe the payout is sustainable. The 4% yield might come from a company that has raised its dividend every year for 52 straight years, through recessions, rate cycles, and global pandemics.

The number alone tells you almost nothing. The story behind it is everything.

This article divides Canadian income investments into three tiers - most risky but most rewarding, moderate risk with solid income, and lowest risk while still paying above 5% - plus one bonus pick for a defensive portfolio. Every entry includes the current yield, beta, and what the risk actually means in plain English.

This is educational content, not investment advice. Please consult a qualified financial advisor before investing.

Part 1: Highest Yield, Highest Risk

These pay the most. They can also hurt the most. Eyes open.

1 NVHE - Harvest NVIDIA Enhanced High Income Shares ETF

Yield: 21-25% | MER: 0.65% | Beta: ~1.85 | Risk: Very High

The highest-yielding mainstream ETF available to Canadian investors. NVHE holds Nvidia stock, writes covered call options on it to generate premium income, and adds 25% leverage on top. The result is an extraordinary monthly distribution and extraordinary volatility.

The maximum drawdown on NVHE was 40.87% on a single day during the April 2025 Liberation Day tariff crash. That is not a typo - nearly half the fund's value gone in one session. The covered call premium that month did not come close to covering it.

NVHE is not a dividend investment in the traditional sense. It is a bet on Nvidia wrapped in an income structure. When Nvidia runs, the returns can be extraordinary - the fund delivered over 57% total return in the twelve months ending mid-2026 including distributions. When Nvidia falls, the leverage accelerates the damage.

Who it is for: Investors with genuine conviction on Nvidia's AI dominance, a short time horizon, and the stomach to watch the unit price swing 10% in a week.

Who it is not for: Anyone who needs stable, predictable income to pay bills.

2 Telus - TSX: T

Yield: ~9% | Beta: ~0.65 | Risk: High

The 9% yield on Telus looks extraordinary. The story behind it is more complicated.

Telus's share price has been under sustained pressure for two years, which has mechanically pushed the yield higher as the denominator shrinks. The payout ratio hit 148% in recent quarters - meaning the company is paying out nearly one and a half times its earnings as dividends, funding the difference from its balance sheet. Management has paused dividend growth and is targeting a net debt-to-EBITDA ratio of 3.3 times by end-2026.

The yield is real, and many analysts believe the dividend is sustainable for now. But a payout ratio above 100% is the definition of a dividend that is not fully covered by earnings. If free cash flow does not improve meaningfully, a cut becomes a real possibility - and when a 9% yield gets cut, the stock price typically falls hard on top of the lost income.

Who it is for: Investors who have analyzed the balance sheet, believe in the turnaround story, and are comfortable with the risk that the dividend could be reduced.

Who it is not for: Investors treating it as a safe income stock because the yield is high.

3 HDIV - Hamilton Enhanced Multi-Sector Covered Call ETF

Yield: ~9% | MER: 0.65% | Beta: ~0.75 | Risk: High

HDIV is a more defensible version of the single-stock covered call concept. It holds a diversified basket of established, income-generating companies across financial services, energy, utilities, and real estate - then writes covered call options on those holdings and adds 25% leverage.

The result is approximately 9% annual yield paid monthly, with a lower beta than Telus because the underlying holdings are diversified rather than a single stock. The leverage is the primary risk factor: in a meaningful market drawdown, a 25% leveraged fund falls 25% further than its underlying holdings would on their own.

HDIV is genuinely income-focused rather than a single-stock speculation. It is still not a low-risk product.

Who it is for: Income investors who want high monthly distributions and understand leverage amplifies both gains and losses.

Part 2: Moderate Risk, Reliable Income

These are the workhorses of a Canadian income portfolio. Well-known, well-tested, and still paying meaningfully.

4 Enbridge - TSX: ENB

Yield: ~5.05% | Beta: ~0.65 | Risk: Medium | Streak: 31 consecutive annual increases

Enbridge is the most important stock on this list for understanding what quality dividend income actually looks like.

Enbridge has paid dividends for over 70 years. In December 2025, they announced a 3% increase to the quarterly dividend to $0.97, translating into $3.88 annualized for 2026. That is the 31st consecutive annual dividend increase - not a coincidence, but a disciplined commitment to shareholder income through rate cycles, recessions, and commodity price swings.

Enbridge operates the largest crude oil and liquids pipeline network in North America, plus a growing natural gas distribution and renewable energy business. The cash flows are largely regulated and contracted - meaning Enbridge gets paid whether oil prices are up or down, because the pipelines are tollroads, not oil price bets.

Enbridge achieved financial guidance for the 20th consecutive year, reflecting continued business resilience and predictability across all franchises.

Beta of approximately 0.65 means that in a market that falls 10%, Enbridge typically falls around 6.5%. It also means it tends to lag in strong bull markets - the trade-off for stability.

Who it is for: Almost every income investor's shortlist. A 5% yield backed by 70 years of payment history and regulated cash flows is not easy to find.

5 Bank of Nova Scotia - TSX: BNS

Yield: ~4.6% | Beta: ~0.85 | Risk: Medium | Streak: Dividends since 1833

Scotiabank currently offers the highest forward dividend yield among the Big Six Canadian banks - a full percentage point above the group average, and nearly two percentage points above Royal Bank and National Bank.

The reason the yield is elevated is instructive. Scotiabank's share price gained 53% over the past five years, roughly half the gain of its peers on average, leaving the dividend yield relatively elevated. That underperformance reflects a strategic reset - the bank is divesting international operations in Colombia, Costa Rica and Panama to focus on North American markets.

Scotiabank's dividend history stretches back to its first declared payout in July 1833. The dividend has never been cut in modern history, including through the 2008 financial crisis and the COVID-19 pandemic.

The strategic pivot is ongoing. For investors who believe the North American refocus will pay off, the current yield is above-average entry for a bank with a nearly 200-year dividend track record.

6 TD Bank - TSX: TD

Yield: ~3.7% | Beta: ~0.88 | Risk: Medium | Streak: Uninterrupted since 1857

TD just completed a significant chapter in its history. After a $3.1 billion (USD) fine from US regulators in 2024 for anti-money laundering failures, the bank restructured its US operations, absorbed the final AML charges, and returned to growth. TD raised its quarterly dividend by 3.7% to C$1.12 per share, equating to an annualized payout of C$4.48.

TD's yield of approximately 3.7% is lower than Scotiabank's but reflects a bank that is now refocusing on growth. The AML remediation overhang that suppressed the stock through 2024 is largely resolved, which is part of why TD rebounded nearly 60% in 2025 after years of underperformance.

For income investors who also want capital appreciation potential, TD at current prices may offer both - a growing dividend plus room to run as the US business recovers.

7 ZWB - BMO Covered Call Canadian Banks ETF

Yield: ~5% | MER: 0.83% | Beta: ~0.65 | Risk: Medium

If owning individual bank stocks feels like too much single-stock concentration, ZWB packages all of Canada's Big Six banks into one ETF and writes covered calls on them to generate additional income.

The result is a yield of approximately 5% - meaningfully above what any individual bank stock pays - with automatic diversification across all six institutions and monthly distributions. The covered call strategy caps the upside in strong bank rallies but generates premium income that supplements the underlying dividends.

BMO's Equal Weight Banks Index ETF ZEB is a low-cost strategy, while ZWB with covered calls offers additional income features for investors seeking higher monthly distributions.

Beta of approximately 0.65 reflects the covered call overlay, which cushions some downside volatility relative to holding the banks directly.

8 XEI - iShares S&P/TSX High Dividend Index ETF

Yield: ~4.25% | MER: 0.22% | Beta: ~0.78 | Risk: Medium

XEI is one of the most straightforward Canadian income ETFs available. It holds approximately 75 TSX-listed stocks selected for their yield, weighted by dividend, and rebalanced regularly. The largest sector exposures are energy (approximately 33%) and financials (approximately 29%) - Canada's two dividend powerhouses.

At 0.22% MER it is significantly cheaper than ZWB and the covered call ETFs above, and it offers no options overlay - just straightforward dividend income from Canadian companies. The trade-off versus covered call products is a lower yield in exchange for full participation in upside when those sectors run.

XEI is a sensible core holding for an investor who wants broad Canadian dividend exposure at a low cost without the complexity of options mechanics.

Part 3: Lowest Risk, Still Paying Above Expectations

These are the slow and steady names. Lower volatility, regulated income streams, and decades of uninterrupted payments.

9 Fortis - TSX: FTS

Yield: ~3.3% | Beta: ~0.35 | Risk: Low | Streak: 52 consecutive annual increases

Fortis is the closest thing Canadian investors have to a bond that grows its payment every year.

Fortis has raised its dividend for 52 straight years, with mid-single-digit growth through recessions, rate cycles, and market crashes. The company operates regulated electricity and gas utilities in Canada and the United States - businesses where regulators set the allowed return and customers have no alternative provider. The cash flows are as predictable as any equity investment in existence.

Fortis reaffirmed its C$28.8 billion five-year capital plan targeting rate base growth from C$42.4 billion in 2025 to C$57.9 billion in 2030, and guides 4% to 6% annual dividend growth through 2030.

The 3.3% yield is not the headline number on this list. But paired with 4-6% annual growth, an investor who buys today and holds for 10 years will be earning a meaningfully higher yield on their original cost - without any of the volatility that the higher-yield names carry.

Beta of approximately 0.35 means Fortis barely moves with the broader market. In a 20% market correction, Fortis typically falls 6-7%. It is as close to a defensive equity as the Canadian market offers.

Who it is for: Conservative investors, retirees, and anyone building a portfolio designed to produce reliable income regardless of what the market does.

10 Enbridge Preferred Shares / CPD - iShares CDN Preferred Share Index

Yield: ~5.17% | MER: 0.50% | Beta: ~0.35 | Risk: Low-Medium

CPD holds preferred shares from Canada's largest financial and utility companies - RBC, TD, Fortis, CIBC, and similar names. Preferred shares are a hybrid security sitting between bonds and common stock in the capital structure.

The yield is approximately 5.17% - higher than most bonds currently available in Canada at comparable credit quality. The beta of 0.35 reflects that preferred shares trade on interest rate expectations more than on stock market sentiment. When the Bank of Canada cuts rates (as it has been doing), preferred share prices tend to recover. When rates rise, they fall.

CPD is appropriate for investors who specifically want bond-like income with slightly higher yields than government or corporate bonds, are comfortable with interest rate sensitivity, and want preferred share diversification rather than a single company's preferred.

Bonus Pick: XDIV - The Defensive Portfolio Anchor

Yield: ~3.78% | MER: 0.12% | Beta: ~0.68 | Risk: Low-Medium

If one ETF had to anchor a defensive Canadian income portfolio - something that works in any market environment, requires no attention, costs almost nothing, and selects for quality before yield - XDIV is that product.

At 0.12% MER it is the cheapest quality-filtered dividend ETF in Canada. Before selecting for yield, it screens every holding on MSCI's quality criteria: return on equity, earnings stability, and low financial leverage. This quality screen is what excluded BCE before its 56% dividend cut in 2025 - one of the most painful dividend traps in recent Canadian market history.

XDIV will never be the highest-yielding product on any list. It will also never blow up because it chased a yield that was not sustainable. For investors who want to put their income portfolio on autopilot and not think about it, that trade-off is the entire point.

Full Summary Table

What Beta Actually Means - And Why It Matters for Income Investors

Beta is one of those terms that gets thrown around in financial content without ever being properly explained. Here is the plain-English version.

Beta measures how much a stock or ETF moves relative to the broader market. The benchmark is typically 1.0, which means "moves exactly with the market."

• A beta of 0.35 (like Fortis or CPD) means if the TSX falls 10%, this investment typically falls about 3.5%. It also means if the TSX rises 20%, this investment typically rises about 7%. Low beta = moves less in both directions.

• A beta of 1.0 means the investment moves roughly in lockstep with the market. A 10% market drop is a 10% drop in the holding.

• A beta of 1.85 (like NVHE) means if the market falls 10%, this investment can fall 18.5% or more. The leverage in NVHE amplifies the relationship further.

Why this matters specifically for income investors:

Most people building an income portfolio are doing so because they want stable, predictable cash flow - often in retirement or near it. A high-beta income investment defeats that purpose. If your income stock drops 40% while paying you 9% distributions, you are not ahead. You are behind by 31 percentage points.

The ideal income investment for most Canadians is not the highest yield on the list. It is the highest risk-adjusted yield - meaning the most income per unit of volatility you are taking on. By that measure, Enbridge's 5% yield with a beta of 0.65 and 31 consecutive years of dividend growth is a stronger income investment than Telus's 9% yield with a payout ratio above 100%.

Beta is not a complete measure of risk. It only captures how a stock moves relative to the market - it does not capture balance sheet risk (Telus's debt load), sector concentration risk (XEI's heavy energy weighting), or the structural risk of a covered call strategy that caps your upside. Use beta as one input, not the only one.

The full picture for any income investment is: yield, beta, payout ratio, dividend history, and what happens to the payment if the business hits a rough patch. Every name on this list has been assessed on all five.

Frequently Asked Questions

Which is the safest high-income stock for a Canadian investor?

Enbridge is the most frequently cited answer among income-focused Canadians who want the combination of yield above 5%, low volatility, and a multi-decade dividend track record. Fortis is the answer if safety and dividend growth matter more than maximizing current yield. Neither is without risk - all equities can fall - but both have demonstrated the ability to maintain and grow dividends through extremely challenging environments.

Is a 9% dividend yield a red flag?

It can be. A yield above roughly 7-8% often signals one of two things: the stock price has fallen significantly because the market is skeptical the dividend is sustainable, or the income is being manufactured through options or leverage rather than underlying business cash flow. Telus's 9% reflects the first scenario. NVHE's 21-25% reflects the second. Neither is automatically bad, but both require understanding what is actually driving the number before investing.

Should I hold income ETFs in my TFSA or RRSP?

For Canadian income stocks and ETFs that pay Canadian-source dividends - like ENB, BNS, TD, ZWB, XEI, and XDIV - the TFSA is generally efficient because eligible Canadian dividends already receive favourable tax treatment in non-registered accounts. For products that pay US-source income or distributions that include foreign dividends, the RRSP may be more efficient due to withholding tax considerations. Use the Account Type Optimizer to work through your specific situation.

What is the difference between a dividend and a distribution?

A dividend is income paid by a company from its earnings - what Enbridge, Scotiabank, and Fortis pay. A distribution is what ETFs pay, and it can include dividends, interest income, capital gains, return of capital, or covered call premium - the breakdown varies by fund and is reported annually on a T3 slip. The tax treatment differs meaningfully depending on how the distribution is classified.

Can I live off Canadian dividend income in retirement?

Many Canadians do exactly this. A $1,000,000 portfolio spread across quality Canadian dividend stocks and ETFs at an average yield of 4-5% generates $40,000-$50,000 in annual income, most of which qualifies for the dividend tax credit. Combined with CPP and OAS, this income is often sufficient to fund a comfortable retirement. The risk is that dividends are never guaranteed - the income strategy works until a major holding cuts its payment, which is why dividend history and payout ratio matter more than headline yield alone.

This is educational content, not investment advice. Please consult a qualified financial advisor for guidance specific to your situation. Yields and prices fluctuate and past dividend history does not guarantee future payments.

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