Dividend investing requires focus on sustainability amid shifting interest rates

Investors are being cautioned to look beyond high dividend yields to ensure long-term sustainability, particularly as economic conditions shift. A high yield can sometimes mask falling share prices or growing concerns regarding a company's ability to maintain payouts.

In Canada, Gibson Energy (TSX:GEI) is highlighted as a resilient high-yield option. The energy infrastructure company has increased its dividend for seven consecutive years, supported by a diversified portfolio of liquids infrastructure assets and long-term, take-or-pay contracts that provide stable cash flow.

In South Africa, rising interest rates pose a new risk to income investors. As the Reserve Bank hikes rates, companies with significant debt may face increased interest expenses, which can squeeze the cash available for shareholder distributions. Additionally, higher rates on fixed deposits may make previously attractive dividend yields less competitive.