Best Canadian Dividend Stocks: 13 Stocks to Consider for Dividend Income and Growth
During periods of market volatility, many investors look to dividend stocks to provide a reliable source of income during periods of extreme uncertainty. Recently, I wrote an article covering the top dividend ETFs in Canada, but how about dividend stocks? To help you find the best Canadian dividend-paying companies, I’ve compiled the following list of 13 dividend stocks.
Dividend Stock Methodology
Many publicly-traded Canadian companies have a strong track record of paying dividends to shareholders – the Dividend Aristocrats list boasts more than 85 members. To choose my list of top dividend-paying stocks, I didn’t just consider the current yield – I looked at other factors, like dividend payout ratios, financial performance, and sector outlook. Here’s the list, in alphabetical order. Let me know what companies you would include on your own list and which ones you would leave off.
1. Algonquin Power & Utilities Corp
Algonquin Power & Utilities Corp. operates in hydroelectric, wind and solar power, and utilities. While its stock price has remained relatively stagnant for the past several years, it’s dividend yield remains high, at 5.36%. The stock is popular with socially conscious investors, given its ESG status. If you’re searching for a renewable energy stock with high dividend growth potential, give Algonquin Power a close look.
Company: Algonquin Power & Utilities Corp
Sector: Utilities
Symbol: AQN
Market Cap: $11.7B
Dividend Yield: 5.36%
EPS: $0.65
EPS Growth: (5YR): 4.15%
P/E Ratio: 26.5X
2. BMO
Bank of Montreal (BMO) has been around since 1817, when it began as Montreal Bank in Montreal, Quebec. It’s still headquartered in Quebec’s largest city, although BMO now situates many of its critical operations in Toronto. BMO counts more than 43,000 employees and seven million customers. It also has a solid presence in the U.S. under the name BMO Harris Bank.
Canada’s fourth-largest bank has the unique distinction of being the longest dividend-paying company in Canadian history, a streak now at 193 years. That alone might place them on our list, but their low dividend payout ratio of 26.23% means that they should be able to continue increasing their dividend for some time. Their current dividend
Company: Bank of Montreal
Sector: Financial Services
Symbol: BMO
Market Cap: $83.5B
Dividend Yield: 4.49%
EPS: $18.19
EPS Growth: (5YR): 10.84%
P/E Ratio: 6.8X
3. Brookfield Asset Management
Brookfield Asset Management Inc. is a Canadian company with a global presence. While their home base is in Toronto, they have corporate offices worldwide, in cities like New York and London, Mumbai, Dubai, and Sydney. Brookfield is one of the largest alternative investment companies in the world, with extensive holdings in real estate and renewable energy.
Brookfield’s extensive holdings across various asset classes give investors instant diversification. The dividend yield may be lower than the other stocks on our list, but the capital growth potential is high with Brookfield. This is crucial, especially when global markets, particularly the high-tech sector, are experiencing massive selloffs.
Company: Brookfield Asset Management
Sector: Financial Services
Symbol: BAM
Market Cap: $94.6B
Dividend Yield: 1.24%
EPS: $3.15
EPS Growth: (5YR): 18.35%
P/E Ratio: 18.2X
4. CIBC
The Canadian Imperial Bank of Commerce has its headquarters in Toronto, Ontario. Its more than 40,000 employees serve 11 million customers across Canada, offering personal and business banking, commercial banking, wealth management, and capital markets services.
CIBC is the smallest of the Big 5 Banks, with a market cap of $56.6 billion. But it’s an intriguing dividend play due to its low dividend payout ratio of 41.8%. It allows CIBC to continue increasing its dividend for several more years. Their growth potential might not equal competitors like TD, who do more business outside of Canada, but CIBC already pays the highest dividend yield of the big 5 banks, a trend that may very well continue.
Company: Canadian Imperial Bank of Commerce
Sector: Financial Services
Symbol: CM
Market Cap: $56.6B
Dividend Yield: 5.31%
EPS: $7.06
EPS Growth: (5YR): 5.41%
P/E Ratio: 8.9X
5. Canadian Natural Resources
Canadian Natural Resources is a large oil and gas company based in Calgary, Alberta. They own and operate two significant oilsands projects in Fort McMurray, Alberta, and two pipeline systems. The very mention of the Alberta oilsands might make some investors nervous, but oil and gas will be in high demand across the globe for many years. This point has been driven home by the recent move to sanction and ban Russian oil in the wake of its invasion of Ukraine. Suddenly, world leaders must balance a war on climate change with an immediate need for energy to protect much of Europe’s population.
Company: Canadian Natural Resources
Sector: Energy
Symbol: CNQ
Market Cap: $81.9B
Dividend Yield: 4.34%
EPS: $7.93
EPS Growth: (5YR): N/A
P/E Ratio: 8.7X
6. Canadian Tire Corporation
As a brand, Canadian Tire is ingrained in Canadian culture, much like Tim Horton’s or Hudson’s Bay. They celebrate their 100th anniversary this year (2022). You might not be aware that their business extends well beyond their Canadian Tire brand. They also own Mark’s (Work Warehouse), Sport Check, PartSource brands, and Norwegian clothing company Helly Hanson.
Many top Canadian dividend stocks are in the financial services, telecommunications, and energy sectors. Canadian Tire offers dividend investors the opportunity to own a strong consumer stock.
Company: Canadian Tire Corporation
Sector: Consumer Cyclical
Symbol: CTC
Market Cap: $10.2B
Dividend Yield: 2.03%
EPS: $18.96
EPS Growth: (5YR): 14.79%
P/E Ratio: 16.9X
7. Canadian Western Bank
With a total market capitalization of $2.37 billion, Canadian Western Bank is the smallest company on our list. But that shouldn’t take away from their appeal as a top dividend stock. It’s a regional bank, similar to National Bank of Canada, but its strongest presence is in, you guessed it, western Canada, instead of Quebec. CWB is a Dividend Aristocrat and pays a healthy dividend yield of 4.76%. Canadian Western Bank can be a nice complementary holding within the sector if you already own a big bank dividend stock, like TD or RBC.
Company: Canadian Western Bank
Sector: Financial Services
Symbol: CWB
Market Cap: $2.37B
Dividend Yield: 4.76%
EPS: $3.78
EPS Growth: (5YR): 11.83%
P/E Ratio: 6.9X
8. Enbridge
Enbridge is an international oil and gas pipeline company headquartered in Calgary, Alberta. In recent years, climate-fueled political decisions have halted new pipeline growth, but Enbridge already has over 40,000 miles of oil and natural gas pipelines across Canada and the U.S., making its existing network highly valuable.
Enbridge boasts a high dividend yield of 6.33% and projects that its dividend will continue to rise. We don’t yet know how the Ukraine war and Russia’s subsequent threats to cut Europe’s oil and gas supplies will play out, but European leaders are already looking to Canada to help fill the gap. If that happens, you can bet Enbridge will play an important role.
Company: Enbridge
Sector: Energy
Symbol: ENB
Market Cap: $110.9B
Dividend Yield: 6.33%
EPS: $2.88
EPS Growth: (5YR): 8.22%
P/E Ratio: 18.9X
9. Fortis
Fortis Inc. is a diversified electric utility holding company based in St. John’s, Newfoundland. Its business interests include the generation, transmission, and distribution of gas and electric power in the Canadian, U.S., Central American, and Caribbean markets. Fortis does about 60% of its business outside Canada, although it serves most Canadian provinces in some capacity.
Fortis has a dividend growth streak close to 50 years long, making it one of Canada’s most reliable dividend stocks. With international markets reeling, including technology stocks, Fortis is a safe play in a world of uncertainty.
Company: Fortis
Sector: Utilities
Symbol: FTS
Market Cap: $29.2B
Dividend Yield: 3.52%
EPS: $2.59
EPS Growth: (5YR): 6.95%
P/E Ratio: 23.5X
10. Manulife
Manulife is the largest insurance company in Canada, with more than 30,000 employees and 60,000 agents. It operates in the U.S. primarily under its John Hancock Financial subsidiary.
Manulife makes the list based on its high dividend yield and strong track record for dividend growth. Insurance companies like Manulife perform well when interest rates rise, making them a solid long-term dividend play.
Company: Manulife
Sector: Financial Services
Symbol: MFS
Market Cap: $42.9B
Dividend Yield: 5.91%
EPS: $4.66
EPS Growth: (5YR): 20.26%
P/E Ratio: 4.8X
11. National Bank of Canada
National Bank is Canada’s 6th largest bank, just outside the Big 5. Its headquarters are in Montreal, serving more than 2.4 million customers in most areas of the country. National Bank’s business may not be as diversified as the other Canadian banks (almost 60% of its revenues come from Quebec). Still, it’s delivered strong growth in recent years, outpacing its competitors with a whopping 22.21% 5-Year EPS Growth Rate.
While you may not want to purchase National Bank as your only Canadian bank stock, its solid dividend payout, and even stronger growth history make it an excellent complementary financial sector holding.
Company: National Bank of Canada
Sector: Financial Services
Symbol: NA
Market Cap: $28.5B
Dividend Yield: 4.36%
EPS: $9.74
EPS Growth: (5YR): 22.21%
P/E Ratio: 8.7X
12. TD Bank
Toronto Dominion Bank is one of Canada’s Big 5 Banks (a close second to RBC), but its influence spreads far beyond the Canadian border. Through its U.S. bank, TD has more than 1,200 branches along the eastern seaboard (2,300 overall). TD’s market cap of $154B positions it as a top-10 North American bank and the 23rd largest bank in the world.
As a dividend performer, TD stock has been very reliable. The company has paid a dividend for more than 160 years and increased it for eleven consecutive years, placing it on the Canadian Dividend Aristocrats list. It’s North American foothold is the strongest of the Canadian banks and positions it well for future growth. Currently, most analysts have a hold rating on Canadian Banks, including TD, but this one’s a buy if you’re looking for a long-term dividend stock in the financial services sector.
Company: Toronto Dominion Bank
Sector: Financial Services
Symbol: TD
Market Cap: 154.4B
Dividend Yield: 4.22%
EPS: $8.05
EPS Growth: (5YR): 10.55%
P/E Ratio: 10.5X
13. Telus Corp
Telus Corp is a national Canadian telecommunications company headquartered in Vancouver, BC. Its primary competitors are Bell Canada, Rogers, and Shaw Communications. More than 65,000 employees deliver various products and services, including mobile and fixed voice and data telecommunications, healthcare software, and technology solutions.
Like the other companies on this list, Telus is a Canadian Dividend Aristocrat, having increased its dividend for the past 16 years. Their current dividend yield is a healthy 4.72%, and their EPS Growth rate has outperformed the industry’s most significant player, Bell Canada (BCE).
Company: Telus
Sector: Communication Services
Symbol: T
Market Cap: $39.89B
Dividend Yield: 4.72%
EPS: $1.25
EPS Growth: 3.50%
P/E Ratio: 23.0X
What Is a Canadian Dividend Aristocrat?
A dividend aristocrat is a company with a track record of delivering consistent dividend payments and dividend increases to its investors. For a dividend stock to be included on the Aristocrats list in Canada, it must meet the following criteria:
- Must be common stock or income trust listed on the TSX and S&P Canada BMI;
- Increased ordinary cash dividends every year for 5 years;
- A minimum market capitalization of C$300 million.
Where Can I Buy Dividend Stocks?
If you’re new to investing or have a small portfolio, I recommend buying dividend stocks inside broad index-based mutual funds or exchange-traded funds (ETFs). Index funds offer instant diversification at a very low cost.
Experienced investors with large portfolios should achieve proper diversification through individual stocks, like the ones featured above. Of course, unless you are 100% confident in making your own investment decisions, I recommend you consult with a qualified investment advisor before purchasing any investment.
Dividend Investing with an Online Broker
Whether it’s ETFs or individual dividend stocks, the easiest way to invest is through a discount brokerage account online. You can open a brokerage account with any Canadian bank, but several independent brokers are up to the task. Our top choice here at MapleMoney is Questrade, an independent broker known for its low fees and ease of use.
When you open a Questrade account, you’ll get free ETF purchases and a robust trading platform. Wealthsimple Trade is another option – they offer commission-free trades on ETFs and dividend stocks via a slick mobile trading app.
Final Thoughts on the Best Canadian Dividend Stocks
Anytime you read a “best stocks” list, it’s important to remember that it’s entirely subjective, regardless of the source. No one can guarantee the future performance of a stock or its dividend payout rate. But my best advice, when looking for dividend income and growth, is to look beyond dividend yield. Consider other factors, like profitability, sector outlook, and the company’s dividend payout ratio. And, as always, you should speak with an investment professional before proceeding with any stock purchase.
