3 Dividend Stocks to Buy if Rates Stay Higher for Longer

When rates stay higher for longer, investors need dividend stocks with more than a juicy yield. The best picks usually sell services people keep using in any economy, carry steady cash flow, and have enough pricing power to offset higher borrowing costs. A big yield can look tempting, but it can flash a warning sign if the payout eats too much cash. So the sweet spot sits with companies tied to everyday needs.

SGR

Slate Grocery REIT (TSX:SGR.UN) owns grocery-anchored real estate across major U.S. markets. Plazas where supermarkets pull in steady traffic, then smaller tenants benefit from that flow. That setup looks useful when rates stay high, since grocery trips don’t disappear just because borrowing costs pinch household budgets. Over the last year, Slate Grocery stock kept leaning into that defensive base. In 2025, it completed 1.7 million square feet of leasing, with renewals signed at 14.9% above expiring rents and new deals at 34.9% above comparable in-place rent. Occupancy sat at 94.4% at year-end, which shows the portfolio still had solid demand.

The earnings picture looks steady, though not perfect. In the fourth quarter, rental revenue rose 2.9% to US$54.6 million, while net operating income (NOI) rose 1.7% to US$42.2 million. Funds from operations (FFO) came in at US$0.25 per unit, flat from the year before. Adjusted FFO fell to US$0.19 per unit, and the AFFO payout ratio reached 110.8%.

That’s the risk investors need to respect. Still, the stock’s roughly 7.4% yield at writing gives investors plenty of income while they wait. If management keeps lifting rents and managing debt carefully, Slate Grocery stock could work as a higher-income pick in a stubborn-rate world.

EXE

Meanwhile, Extendicare (TSX:EXE) owns and operates long-term care homes, retirement living, home health care, and management services. That ties it to an aging population rather than the normal economic cycle. Over the last year, Extendicare also gained attention for growth, not just dividends. The company raised its monthly dividend by 5% to $0.0441 per share, which was a nice signal after a strong 2025. The yield sits closer to 1.75%, so this isn’t the biggest payer on the list. But it offers a better blend of growth and income.

Its latest numbers explain why the stock climbed. Fourth-quarter revenue rose 18% year over year to about $462 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) climbed 36.4% to $45.6 million, while AFFO per share rose 6% to $0.337. The payout ratio sat near 42% for the quarter, which leaves more breathing room than many higher-yield stocks.

The valuation looks richer now, with the stock trading around 27 times trailing earnings and about 25 times forward earnings. That’s the main risk as investors pay up for quality and growth. But with demand for senior care still rising, Extendicare fits well for those who want a dividend stock with a stronger growth engine.

ACO

ATCO (TSX:ACO.X) operates across utilities, energy infrastructure, structures, logistics, and related services. Its regulated utility exposure gives it a steadier earnings base, while its broader energy and infrastructure businesses add growth potential. In a tougher rate environment, investors often look back to utilities as people still need power and gas. ATCO also benefits from long-term infrastructure spending, energy security needs, and electrification.

The numbers look dependable. ATCO reported 2025 adjusted earnings of $518 million, or $4.61 per share. The stock recently traded around 14 times forward earnings. Its dividend yield sits close to 3%, which won’t knock anyone’s socks off, but it looks far more sustainable than many ultra-high yields. The risk comes from regulation, project costs, and interest rates that can still pressure capital-heavy businesses. Yet ATCO’s long dividend history and essential-service mix make it a strong fit for investors who want income without chasing drama.

Bottom line

Higher rates can make dividend investing trickier, but they don’t make it less useful. In fact, put $7,000 in each and the dividends look pretty useful indeed.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTACO.X$68.37102$2.05$209.10Quarterly$6,973.74SGR.UN$16.18432$1.19$514.08Monthly$6,989.76EXE$30.02233$0.53$123.49Monthly$6,994.66

Together, they show three different ways to collect dividends while waiting for rates to finally cool.

The post 3 Dividend Stocks to Buy if Rates Stay Higher for Longer appeared first on The Motley Fool Canada.

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More reading

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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Slate Grocery REIT. The Motley Fool has a disclosure policy.