Best Canadian Dividend Stocks for 2017

Top Dividend Stocks for 2017 In Canada

One of the best ways to increase the value of your stock portfolio while protecting it from adverse market movements is to add dividend producing stocks that will provide you with income in any market environment. You can easily get started with this by starting up a brokerage account with Questrade. Stocks with robust dividends allow you to earn income when stock prices are moving sideways. Another benefit is it also acts as a hedge when the markets move south. Be careful though, stocks that have unusually high dividends need to pay these rich premiums to attract investors and most of the time these companies are unstable. Therefore it’s prudent to build your dividend producing portfolio with stocks that are not overvalued, and likely to hold up in adverse market conditions.

While the notional value of the dividend is important, the dividend yield will provide you with the best gauge of your return on investment. An investor can calculate dividend yield by dividing the capital needed to buy the stock by the value of the dividend. For example, if you paid 100 dollars for 1 share and the annual dividend is 5 dollars, then your dividend yield is 5%.

 

Using Canadian Dividend Stocks To Diversify Your Portfolio

You should also be diversifying your portfolio by adding shares of companies that are in different sectors. Ultimately if all your eggs are in one basket you run the risk of sector underperformance. While there is a multitude of sectors in the Canadian market the economy is dominated by oil and gas producers, pipeline and storage companies, major financial institutions, and investment management trust companies. Still, each of these sectors has risks.

Therefore if you would like to avoid direct exposure to oil and gas risk, you should avoid oil and gas producers and stick to pipeline and storage companies which produce income like toll operators. Banks and insurance companies along with real-estate investment have exposure to changes in interest rates, as well as swings in their own riskier investment businesses.

Enough talk about what a dividend is. If you’re searching for the best Canadian dividend stocks, you already know what a dividend is anyways. Here are Stocktrades top 15 Canadian dividend stocks for Q3 2017.

Along with our own opinions, we welcome the opinions of Mark from MyOwnAdvisor, Mike from The Dividend Guy, Sabeel from Roadmap2Retire and Mathieu, a frequent writer on Stocktrades and Seeking Alpha. You can check out their websites by clicking on the links or checking out their bios at the end of the article.

As a general disclaimer for the entire article, all of the contributors, including Stocktrades, are long on some of the stocks listed here. If you have a stock you believe should be on the list, or one that you think is overrated feel free to comment below. We review these multiple times a year. All price and stock information is accurate as of September 3rd 2017.

#15 — Sun Life Financial

Best Canadian Dividend Stocks 2017 #15 Sunlife

Price on Q2 Update: $43.83
Price As Of Sept 3rd: $48.15
Ticker: SLF.TO
Sector: Financial Services/Insurance
P/E: 11.90
EPS: $4.05
Market Cap: 25.549 Billion
Net Revenue 2016: $26.8 Billion
Net Profit 2016: $2.581 Billion
Dividend Yield: 3.61%
Click here to see their chart and opinions

In at number 15 is Sun Life Financial. The insurance giant was previously ranked number 9, but has fallen to superior competition. Sun Life Financial is a holding company that has subsidiaries that are active in the financial service space. Through its subsidiaries, the company offers a range of insurance products along with wealth management instruments to individuals and corporations. Head office is in Toronto and had net income of 2.581 billion Canadian dollars in 2016.

Sun Life is a global organization and has operations in Asia, Europe, and North America. Sun Life performs better as interest rates begin to rise. This is because they have a difficult time generating enough revenue to cover insurance policies when interests rates are unusually low. At this time the organization boasts a solid 3.9% dividend yield, making this an attractive addition to your dividend portfolio.

Mathieu: Sun Life is a well-diversified insurance company with no segment accounting for more than 40% of earnings. After the financial crisis stalled their dividend growth the company has since raised dividends twice yearly in both 2015 as well as 2016, and are well positioned to raise twice again this year.

#14 — Enbridge

Enbridge logo

Price on Q2 Update: N/A
Price As Of Sept 3rd: $50.08
Ticker: ENB.TO
Sector: Energy
P/E: 36.149
EPS: $1.38
Market Cap: $82.03 Billion
Net Revenue 2016: $34.56 Billion
Net Profit 2016: $1.78 Billion
Dividend Yield: 4.9%
Click here to see their chart and opinions
 

Enbridge cracks our list at #14 this quarter after not appearing in the top 10. Enbridge is Canada’s largest energy company with a market capitalization of $82 billion. Enbridge breaks down operations in five segments; Liquids Pipelines, Gas Pipelines & Processing, Gas Distribution, Green Power & Transmission, and Energy Services. The company has $3.6 billion of organic growth backlog and is expecting $13 billion worth of projects to come online through 2017, each of which will drive near term cash flow growth.

Enbridge is one of Canada’s premier dividend growth companies having raised dividends for 21 consecutive years. It sports an impressive starting yield of 4.90% and has raised dividends twice in the past three quarters which is reflective of the management’s commitment to return capital to shareholders through increasing dividends. Over the medium term, management expects to grow dividends at an annualized rate of 10% through 2019.

Mark: Enbridge is an energy powerhouse in Canada and in the U.S. They deliver a diverse portfolio of energy through the following five segments: Liquids Pipelines, Gas Distribution, Gas Pipelines and Processing, Green Power and Transmission, and Energy Services. They also have a renewable energy portfolio that consists of wind, solar, geothermal, and waste heat recovery facilities in Canada and in many U.S. states. Energy distribution is big business, and big business brings in big earnings. Those earnings are passed onto shareholders. They’ve paid a quarterly dividend for 64 years to its shareholders. They have plans to increase their dividend by up to 12% through 2024. You can check out more info about it here

Sabeel: Enbridge is the midstream giant and is now one of the largest energy companies in N.America after the purchase of Spectra Energy.

#13 — Brookfield Asset Management

Brookfield Asset Management

Price on Q2 Update: N/A
Price As Of Sept 3rd: $48.67
Ticker: BMA-A.TO
Sector: Real Estate
P/E: 30.595
EPS: $1.61
Market Cap: $48.68 Billion
Net Revenue 2016: $26.19 Billion
Net Profit 2016: $1.52 Billion
Dividend Yield: 1.42%
Click here to see their chart and opinions
 

Brookfield was a stock we felt really needed to be in the top 10, but with its small dividend yield it just didn’t cut it. Now with it being the top 15 they definitely warrant a spot on the list. Brookfield is synonymous with quality and one of the world’s premier asset management companies. BAM has $250 billion+ in assets under management in 30+ countries. The company has assets under four segments; Real Estate, Infrastructure, Renewable Power, and Private Equity. BAM also has a very impressive compound annual shareholder return of 16% and is targeting 10-15% annualized growth over the long-term.

The company has over $30 billion of invested capital which generates $1.4 billion in annualized distributable cash flow. Although BAM has the lowest dividend yield of all companies on the list at 1.43%, their current payout ratio of 44% leaves ample room for continued dividend growth moving forward.

Mike: Brookfield is an alternative asset manager with over 100 years of operation. What are alternative assets? The 4 divisions they manage: Real Estate, Infrastructure, Renewable Energy, and Private Equity. Those are interesting sectors if you are looking to diversify your portfolio in other types of industries.

Sabeel: I like to consider this as an alternative investment, based on the types of investments the company makes and the kind of exposure provided. The umbrella corporation provides exposure to global infrastructure projects and assets via BIP.UN, global real estate assets via BPY.UN, renewable energy projects via BEP.UN, and private equity.

#12 — Canadian National Railway

CN Rail Logo

Price on Q2 Update: N/A
Price As Of Sept 3rd: $100.59
Ticker: CNR.TO
Sector: Industrials
P/E: 19.534
EPS: $5.09
Market Cap: $74.83 Billion
Net Revenue 2016: $12.04 Billion
Net Profit 2016: $3.64 Billion
Dividend Yield: 1.66%
Click here to see their chart and opinions
 

At number 12, next is CNR. Canadian National Railway (CNR) has the prestigious distinction of being the only transcontinental railway in North America and is the second largest publicly traded railway in North America with an $80 billion market capitalization. The company is dual-traded, which means it can be traded on both the Toronto (TSX) and New York (NYSE) stock exchanges. Over the past 5 years, the company has grown revenues at an annual compound growth rate of 6%, free cash flow by 8% and operating income by 10%. Perhaps, even more important for dividend investors, the company has an average dividend growth rate of 20% over the same period.

CNR also has the distinction of being Canada’s largest-ever IPO when the company went public back in 1995. The company is well diversified, with no revenue product lines accounting for more than 24% of total revenues. Over the past 15 years, the company is also one of the most efficient railways in North America with the lowest operating ratio of all publicly traded railways. Although their current yield of 1.66% is one of the lowest on this list, it also has the highest dividend growth rate and their low yield has been more than offset by significant share price appreciation to the tune of 337% over the past 5-years alone.

Mark: CNR owns one of Canada’s top 10 dividend growth streak at 21 years (and counting). The best part? The company has raised dividends on average by 20% over the past 10 years and the company’s yield still hasn’t climbed past 2%. This is good news, as it means the company’s share price has also risen significantly, so don’t let that sub-2% yield detract you from investing.

Mike: The management team makes sure to use a good part of this cash flow to maintain and improve their railways (their biggest expense) while rewarding shareholders with generous dividend payments. CNR has a very strong economic moat as railways are virtually impossible to replicate. Therefore, you can count on increasing cash flow coming in each year. Plus, there isn’t any better way to transport most commodities than by train

Sabeel: One of the best run North American railroad companies. Railroads are one of the strongest infrastructure plays in investing and CN is the only railroad that provides service to three coasts in N.America — Pacific, Atlantic, and Gulf coasts.

#11 — Bank Of Nova Scotia

ScotiaBank Logo

Price on Q2 Update: N/A
Price As Of Sept 3rd: $77.69
Ticker: BNS.TO
Sector: Financial Services
P/E: 12.291
EPS: $6.29
Market Cap: $92.66 Billion
Net Revenue 2016: $26.35 Billion
Net Profit 2016: $3.87 Billion
Dividend Yield: 3.9%
Click here to see their chart and opinions
 

At number 11 on our list is the Bank of Nova Scotia, or Scotiabank for short. Bank of Nova Scotia is Canada’s third largest bank with a market capitalization of $93 billion. BNS also sports an attractive 3.93% dividend yield, the second highest among Canada’s “big 5” banks. BNS has successfully differentiated themselves from their peers through an intense focus on digital banking. The company is motivated by a positive client experience and a mobile first design.

Along with their peers, the company is well positioned to take advantage of rising interest rates which will help the spread on net interest income (NII) margins. The company is targeting 14%+ Return on Equity and 5-10% earnings per share growth. With a high starting yield and growing earnings, dividend investors will continue to be well rewarded with their investments in BNS.
Mark: I like owning BNS for the dividends and built-in international diversification. Bank of Nova Scotia (Scotiabank) has a global presence. They own branches and have tens of millions of assets in Latin America, across Europe, and throughout Asia. It doesn’t hurt they’ve paid dividends since 1832, and you can almost count on a dividend increase from them every single year.

#10 — Emera

Emera

Price on Q2 Update: N/A
Price As Of Sept 3rd: $47.80
Ticker: EMA.TO
Sector: Utilities
P/E:27.055
EPS: $1.77
Market Cap: $10.15 Billion
Net Revenue 2016: $4.28 Billion
Net Profit 2016:: $277 Million
Dividend Yield: 4.37%
Click here to see their chart and opinions
 

Cracking the top 15 in our Q3 update of the top dividend stocks in Canada is Emera. Headquartered in Halifax, Emera is one of Canada’s largest diversified utility companies with a market capitalization of $10 billion. The company invests in electricity generation, transmission and distribution, gas transmission and distribution, and utility energy services with a strategic focus on the transformation from high carbon to low carbon energy sources. In 2016, the company posted in excess of $1 billion in operating cash flow and their dividend is fully covered by their 90% of regulated earnings.

Their current yield of 4.37% is extremely attractive and is almost a full percentage point higher than some of their major competitors such as Fortis and Canadian Utilities. Although not as impressive as their peers as far a dividend growth is concerned, the company still has an impressive 10-year DG streak with double digit raises over the past 3 years and anticipates growing dividends by 8% through 2020.

Mark: I’m a big fan of Emera stock because of their focus on cleaner energy solutions; they have been making increased investments in wind, biomass, plus hydro and solar energy generation and transmission. I also like the juicy dividends paid by this company. Dividends paid have doubled since 2009. Emera consistently yields around 4% and on top of that, given the company’s growth prospects, capital gains will be provided as well.

Mike: An investment in EMA is an investment into a high dividend yield stock with solid perspective. The utility industry is slowly but surely growing each year and the dividend payment will continue to be increased in the upcoming years. Since EMA is continuously working on new projects, we can expect cash flow generation capacity to increase and offer shareholders more reasons to smile.

Mathieu: When compared to the other Canadian Utilities, Emera is relatively a newcomer as a dividend growth company with a modest 10 year growth streak. That being said, the company’s yield is currently the most attractive of the bunch and double digit dividend growth over the past few years is equally as impressive.

#9 — Bank of Montreal

best canadian dividend stocks for 2017 #10 BMO

Price on Q2 Update: $90.60
Price As Of Sept 3rd: $89.49
Ticker: BMO.TO
Sector: Financial Services
P/E: 11.26
EPS: $7.95
Market Cap: 58.05 Billion
Net Revenue 2016: $19.19 Billion
Net Profit 2016: $5.16 Billion
Dividend Yield: 4.02%
Click here to see their chart and opinions

 

Up at spot at number 9 on our list of the top Canadian dividend stocks of 2017 is the Bank of Montreal. The Bank of Montreal is a financial services corporation and their headquarters are located in, you guessed it, Montreal. All things considered, the company is attractive as growth is poised to increase in Canada allowing yields to move higher which benefits the financial sector. As Canadian government yields rise, Bank of Montreal will be able to borrow from the government and lend to customers, locking in attractive spreads.

At this point, the company is one of the top 10-banks in North America and produced revenues of 19.19 billion in 2016. The organization focuses its banking efforts in the retail space but has three operating groups which include personal and commercial banking, wealth management, and capital markets sales and trading. Presently the Bank of Montreal has an attractive 4% dividend yield, which means that you will collect 4% on the capital you use to purchase the stock.

Mark: This stock consistently yields about 4%, so I like the income and the long-term capital gains from this company. Bank of Montreal is the longest-running dividend-paying company in Canada. It has paid dividends since 1829! (I suspect they will continue to do so for the foreseeable future.) Beyond history, they also maintain a very conservative and sustainable dividend policy: BMO’s policy is to pay out 40% to 50% of its earnings in dividends to shareholders over time.

Mathieu: BMO, the last of Canada’s “big five” banks on this list is well positioned for future dividend growth as it has one of the lower payout ratios among its peers. Through the first half of 2017, The company has grown earnings by double digits which bodes well for continued dividend growth. Their 3-YR and 5-YR growth rates are near the bottom of their peers, thus their lower ranking.

Sabeel: The first Canadian corporation to ever pay dividends in 1829 and has not only paid dividends regularly every single quarter, but has consistently raised them too year after year. The company has a track record for just one dividend cut in the past 188 years (in 1942, during WW2). That is a track record hard to match or beat and BMO remains a bedrock in many portfolios. In fact, I started off my daughter’s Nest Egg Portfolio with this stock that I intend to keep growing for the next couple of decades, before I pass it on to her in a couple of decades.

 

Click Here To Read The Single Best Investment: Creating Wealth With Dividend Growth
 

#8 — TransCanada Corp

Best Canadian Dividend Stocks 2017 TransCanada Corp. #8

Price on Q2 Update: $64.00
Price As Of Sept 3rd: $62.94
Ticker: TRP.TO
Sector: Oil and Gas
P/E: 98.65
EPS: $.64
Market Cap: 54.82 Billion
Net Revenue 2016: $13.39 Billion
Net Profit 2016: $515 Million
Dividend Yield: 3.99%
Click here to see their chart and opinions
 

Remaining at number 8 on our list of the best Canadian dividend stocks for 2017 is TransCanada Corp. TransCanada Corp is an oil and gas pipeline company that operates in three business segments including natural gas pipeline, oil pipeline, and natural gas storage. The company has it’s headquarters in Calgary Alberta and operates throughout North America. Due to it being a pipeline company it collects like a toll operator, receiving compensation when it provides access to transport oil and gas to specific destinations. Presently pipeline transportation is booked months in advance. This means that cash flow pledged is exposed to changes due to interest rates.

The cash flows are stable, making this company an excellent dividend investment. TransCanada is an expert in power generation in Canada and the United States, as well as storage of natural gas. Therefore the price of natural gas has a large impact on the stock. Currently, the company boasts a robust 4% dividend yield.

Mark: I like the fact that TransCanada works much like a toll road operator; meaning, if you want to get your product somewhere, you’ve got to pay up first. Thanks to those ongoing tolls TransCanada can pay shareholders as well. February 2017 marked the 17th consecutive year the board of directors raised the dividend. Think about it, the sky was falling in 2008-2009 during the financial crisis and they not only kept their dividend running, they had enough cash to increase it. Don’t forget companies like TRP also provide a discount if you decide to reinvest your shares. With TRP, in particular, you’ll get a 2% discount to reinvest your common shares, it’s like a quarterly sale! You can find out more info here.

Mathieu: TransCanada is one of Canada’s top energy and infrastructure company which has rewarded investors with a 14% annual return since 2009. The company also has ambitious dividend growth goals targeting the upper-end of 8-10% return through 2020.

 

#7 — Telus

best dividend stocks telus

Price on Q2 Update: N/A
Price As Of Sept 3rd: $45.01
Ticker: T.TO
Sector: Telecommunications
P/E:21.272
EPS: $2.10
Market Cap: 26.34 Billion
Net Revenue 2016: $12.8 Billion
Net Profit 2016: $4.7 Billion
Dividend Yield: 4.42%
Click here to see their chart and opinions
 

A newcomer, number 7 on our list is Telus. A telecommunications company with its headquarters located in Vancouver British Columbia. Telus offers a multitude of products including television, phone, and internet services. They have been providing services for more than 100 years. Their dedication to offering the best services possible is showing through their 12.7 million subscribers and their consistent dividend payouts and increases. Telus has increased its dividend nearly every year since 2001, starting at $0.075 a share into its current $0.4925 today.

Mark: Telus has been a dividend stud in recent years. Telus board of directors announced some time ago their dividend growth policy – to target “ongoing semi-annual dividend increases, with the annual increase in the range of 7 to 10% from 2017 through to the end of 2019.” Although dividends from any company are never guaranteed it’s great to know the board recognizes what shareholders value.

Mike: Telus has been showing a very strong dividend triangle over the past decade. The company is able to grow its revenues, earnings and dividend payouts on a very consistent basis. Telus is very strong in the wireless industry and now booms in other growth vectors such as the internet and television services.

Mathieu: Telus currently owns a 13-year dividend growth streak with no signs of slowing down. The company is very shareholder friendly and clearly articulates its dividend policy. The company expects to raise dividends twice a year and has targeted 7-10% growth through 2019.

Sabeel: On Telus and BCE: Both are extremely well run and enjoy an oligopoly in the space. Its a hard sector for newcomers to get into and both BCE and Telus provide investors with great current dividends and future dividend growth.

#6 — BCE

Best Canadian Dividend Stocks 2017 BCE #6

Price on Q2 Update: $61.03
Price As Of Sept 3rd: $59.15
Ticker: BCE.TO
Sector: Telecommunications
P/E: 17.98
EPS: $3.29
Market Cap: 53.26 Billion
Net Revenue 2016: $16.05 Billion
Net Profit 2016: $2.159 Billion
Dividend Yield: 4.81%
Click here to see their chart and opinions
 

Number 6 on our list of top dividend stocks in Canada is BCE. BCE is a telecommunications and cable provider focusing on wireless, internet and television services to residential, business, and wholesale customers in Canada. The company was founded in 1983, and has its headquarters in Montreal Canada, and reported 2016 profits of 2.159 billion dollars.

BCE operates in 3-segments. First, there is Bell Wireless, which provides wireless voice and data services. Secondly, Bell Wireline which provides data and satellite television. Finally, they have Bell Media which provides pay TV along with digital media and radio broadcasting. As of right now the company has a dividend yield of 4.7%.

Mark: Bell Canada Enterprises is a dividend stalwart and calls home to many institutional portfolios and pension plans in Canada. These facts in addition to BCE rewarding shareholders through a consistent (and rising) dividend over the last few decades (BCE actually started paying a dividend in 1880 according to their investor relations group), is plenty enough reason for me to be a long-term shareholder.

Mike: When you have the possibility to invest in a strong yielder such as BCE and still hope for a small stock appreciation growth, you must take a hold of it. BCE shows a well-diversified business model and will continue to generate strong cash flow in the future.

Mathieu: Canada’s largest telecommunications company, BCE, better known as Bell Canada, has the benefit of operating in a highly regulated environment. As such, they have a dominant position in Canada’s wireless and wireline landscape which has positioned them as an iconic Canadian brand. In their most recent earnings, the company delivered 17% growth in free cash flow which is great news for dividend growth investors.

Sabeel: On Telus and BCE: Both are extremely well run and enjoy an oligopoly in the space. Its a hard sector for newcomers to get into and both BCE and Telus provide investors with great current dividends and future dividend growth.

 

#5 — Royal Bank Of Canada

Best Canadian Dividend Stocks 2017 RBC #4

View our analysis of TSE:RY here
Price on Q2 Update: $92.81
Price As Of Sept 3rd: $92.11
Ticker: RY.TO
Sector: Financial Services
P/E: 12.54
EPS: $7.35
Market Cap: 134.29 Billion
Net Revenue 2016: $38.1 Billion
Net Profit 2016: $10.02 Billion
Dividend Yield: 3.9%
Click here to see their chart and opinions

Dropping one spot as well, number 5 on our list of the best Canadian dividend stocks in 2017 is the Royal Bank of Canada. You know when you’ve got a stock like RY on your list all the way down at number 5, it’s going to be a good list.

The financial services giant focuses on a range of products including banking, wealth management, insurance, and capital markets trading. At this point the company has institutional clients throughout Canada, the U.S. as well as in 37 other countries. The bank is headquartered in Toronto and had profits of 10.02 billion in 2016. Of course with RBC being a bank the stock price is sensitive to interest rates and will rise when yields begin to accelerate higher. At this time Royal Bank of Canada has a dividend yield of 3.7%.

Mark: Royal Bank has paid dividends since 1870. Since 2010, they’ve increased their dividend at least once (sometimes twice per year). The dividend payment has almost doubled in the last six years. Royal Bank has international operations in Europe, Asia, U.S. and Latin America. It’s a major multinational company to invest in, right at home.

Mike: While there are some clouds over the Canadian economy, I still believe investing in banks is a good idea. In fact, even if we hit a housing bubble burst, RY will still generate enough cash flow to keep a strong dividend growth profile. Revenues generated from the capital market and the wealth management divisions will help to smother any road bumps.

Mathieu: RBC is Canada’s largest bank by market cap and is one of the most diversified Canadian banks. Their diversification has them well positioned to weather any downturn in Canadian housing and are well positioned to take advantage of rising interest rates.

 

Click Here To Read The Ultimate Dividend Playbook
 

#4 — Enbridge Income Fund Holdings

Best Canadian Dividend Stocks 2017 Enbridge #3

Price on Q2 Update: $32.60
Price As Of Sept 3rd: $31.13
Ticker: ENF.TO
Sector: Oil and Gas
P/E:14.57
EPS: $2.14
Market Cap: 4.575 Billion
Net Revenue 2016: $270 Million
Net Profit 2016: $267 Million
Dividend Yield: 6.67%
Click here to see their chart and opinions
 

Dropping one spot to number 4 is Enbridge Income Fund Holdings. ENF is a holdings company with subsidiaries that focuses on oil and gas transportation and storage. First and foremost the storage end of their business is focused on natural gas. Enbridge currently serves customers in Western Canada and North Dakota transporting crude oil and natural gas liquids.

Additionally, they also own the Alliance System’s which is a natural gas pipeline beginning near Gordondale Alberta. At this point, the fund has a dividend yield of 6.3%. Ultimately pipeline companies are more sensitive to interest rates rather than oil and gas prices. This is because they generate revenue from tolls that are being charged to move petroleum and gas through their pipeline system, and have exposure to changes in the future value of their cash flows.

Mathieu: Enbridge Income Fund has been a model of consistency over the years sporting double digit earnings and dividend growth over the past 10 years. Likewise, this monthly dividend payer currently sports a very attractive 6+% yield and they have a clear dividend policy, which is to pay out 80-90% of their rising cash flow from operations.

#3 — Fortis

Fortis

Price on Q2 Update: N/A
Price As Of Sept 3rd: $45.66
Ticker: FTS.TO
Sector: Utilities
P/E:20.178
EPS: $2.27
Market Cap: $19.12 Billion
Net Revenue 2016: $6.84 Billion
Net Profit 2016: $585 Million
Dividend Yield: 3.5%
Click here to see their chart and opinions

Fortis is one of Canada’s most notable dividend companies and their 43 years of consecutive dividend growth is second all-time among Canadian companies. This is why the company went from zero to hero in our Q3 update for 2017. How could we have not included them! The company has grown exponentially over the years and has approximately $48 billion dollars in assets across Canada, the United States, and the Caribbean. It is the largest publicly traded utility company in Canada and one of the Top 15 in North America by assets.

The company operates in a highly regulated environment which for investors translates to predictable and reliable cash flows, which is a key financial metric when analyzing dividend payments. The company exudes confidence and has demonstrated a commitment to retuning capital to shareholders through increasing dividends. Fortis currently has a very clear dividend policy and expects to grow their dividend at an annual average growth rate of 6% through 2021.

 

Mark: The dividend history of Fortis is both dependable and rare at the same time. Fortis is one of only two companies in Canada that can claim they have raised dividends, consecutively, for over 40 years. (Utility giant Canadian Utilities is the other.) Fortis sports a healthy and sustainable 3.5% + yield. Fortis has grown from about $390 million in assets to almost $48 billion today. With 3.2 million utility customers, and growing, that means more dividends for you and me.

Mathieu: Fortis currently holds Canada’s second largest dividend growth streak with an impressive 43 consecutive years of growing dividends. The company’s most recent strategy has been growth through acquisitions which have propelled the company to new heights and will drive future dividend growth.

 

#2 — Canadian Imperial Bank of Commerce(CM)

Best Canadian Dividend Stocks 2017 CIBC #2

Price on Q2 Update: $105.09
Price As Of Sept 3rd: $104.79
Ticker: CM.TO
Sector: Financial Services
P/E:8.73
EPS: $12
Market Cap: 45.71 Billion
Net Revenue 2016: $15 Billion
Net Profit 2016: $4.3 Billion
Dividend Yield: 4.89%
Click here to see their chart and opinions
The runner-up on our list of top Canadian dividend stocks is the Canadian Imperial Bank of Commerce. CIBC has managed to hold its 2nd place position for the 2017 3rd quarter. Above all, this giant financial institution focuses on service to individuals, small business, commercial, and corporate banking. That being said, they also service institutional clients and are active in capital markets trading.

The capital markets unit trades products such as foreign exchange, bonds, and equities around the globe. CIBC has a net income of 4.3 billion in 2016 and revenues of 15 billion. Being a bank, they obviously are affected by interest rates, and will generally perform better in a rising rate environment. Profits variation is usually predicted on revenues from the capital markets unit. At this time the company has a dividend yield of 4.8%.

Mark: Canadian Imperial Bank of Commerce has paid dividends since 1868. Although they recently announced a split from President’s Choice Financial operations, I expect their new low-cost banking division, Simplii to rival Tangerine (owned by Scotiabank). Better products and services, and a shift-to-digital should increase shareholder value. I’m glad I’m one of them.

Mathieu: Second only to TD, CIBC is well positioned to reward dividend investors. They sport the lowest payout ratio of all Canada’s big banks and their 3YR and 5YR dividend growth rates are eclipsed only by TD. The company is also trading at a greater discount to its Graham number than all of its peers and sports the lowest PE of the group.

#1 — Toronto Dominion Bank

Best Canadian Dividend Stocks 2017 TD Bank #1

View our analysis of TSE:TD here
Price on Q2 Update: $64.18
Price As Of Sept 3rd: $67.50
Ticker: TD.TO
Sector: Financial Services
P/E: 13.34
EPS: $5.06
Market Cap: 124.43 Billion
Net Revenue 2016: $32.8 Billion
Net Profit 2016: $9.41 Billion
Dividend Yield: 3.71%
Click here to see their chart and opinions
 

The winner of our top dividend stocks in 2017 is Toronto Dominion Bank. TD bank managed to hold onto the number 1 spot for our September edition and for good reason. The financial services giant focuses on several segments which include retail, commercial banking, and credit cards. Additionally, TD bank covers insurance and wealth management.

The company has a large presence in the United States including branches that focus on personal and commercial businesses, U.S. credit cards, and Auto Finance as well the institutions investment its subsidiary TD Ameritrade Holding Corporation. The company is headquartered in Toronto and has 10.2 million online and mobile customers. The company boast a dividend yield of 3.7%.

Mark: Toronto Dominion bank has paid dividends since 1857. Like other big-five banks, I see no signs of that changing – dividends will continue to be paid and are expected to increase over time. This, Canada’s second-biggest bank, had net income close to $2.5 billion in the last quarter alone. It’s a cash machine with significant assets in the U.S. retail sector. Want U.S. banking exposure? Own TD.

Mathieu: Canada’s second largest bank by market cap, TD and its large presence south of the boarder is well positioned to take advantage of rising interest rates both sides of the boarder. The company has targeted EPS growth of 7-10% over the medium term which bodes well for future dividend increases inline with earnings growth.

Sabeel: TD shifted its sights during the global financial crisis and expanded into the US market aggressively and those moves have now been shown to be great moves as the company has gained a solid footprint in the US. The bank has performed really well over the last decade and continues to grow its earnings and dividends giving shareholders solid returns.

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Our Honorable Mention

We wanted every one of the stocks our contributors mentioned to be included on the list, because there are definitely more than 15 formidable dividend paying stocks on the TSX. That being said here is our list of 10 stocks that couldn’t crack the top 15, in no particular order.

Lassonde Industries (LAS.A.TO)

Mike: Lassonde’s wide variety of brands enables them to occupy an important space in grocery stores. There aren’t many consumer products in Canada that offer such great metrics. I know that the dividend yield is somewhat low (1%) but you have to keep in mind the company shows almost double digit dividend growth policy over the past 5 years and the payout ratio is still under 25%. Since there isn’t many “consumer defensive” stocks on the Canadian market, LAS.A should be on your watch list right now.

Hydro One (H.TO)

Mathieu: Hydro One is a newly minted publicly trading company and has only begun paying dividends since 2016. That being said, the company operates in a highly regulated industry which means consistent and reliable cash flow.

Intact Financial ( IFC.TO)

Mike: IFC is one of the best managed P&C insurance companies in Canada. Through a strict underwriting process and careful portfolio management, IFC has proven its value to investors over time. Since the insurance market in Canada is quite fragmented, there are plenty of possibilities for growth in the upcoming years without having real treats to IFC business model.

Power Corp of Canada (TSE:POW)

Sabeel: Power Corp is not the most popular stock that pops into retail investors’ mind when thinking of insurance firms, but the company has a good track record. It is an umbrella corporation that includes Power Financial — subsidiaries of which include Great West Lifeco, IGM Financial, Investors Group, Mackenzie Investments etc. In addition, the Power Corp owns European business interests in Pargesa etc., providing some good international diversification.

Manulife Financial (TSE:MFC)

Sabeel: Manulife Financial, which was affected by the global financial crisis like other institutions, dealt with the situation and came out fairly strong. Over the last few years, the company is focusing on growing its assets in Asia, where the demographics support the long term growth of this company.

Rogers Communications (RCI.B.TO)

Mark: Rogers Communications doesn’t have the same overwhelming dividend history as BCE, let alone Canadian banks, but I think it’s a worthy telecommunications stock to own. Sure, the dividend is not hiked every year like rival Telus but dividends aren’t everything – meaning total return should be important to investors. Rogers shares are up huge in 2017 when compared to the TSX and more growth is expected going forward.

Mike: Investing in Rogers at this point is not to boost your portfolio return in the double digit. However, if you are looking for a steady dividend paying stock in the Canadian market that won’t let you down if the country is slowing down, Rogers can play defense for you.

National Bank (NA.TO)

Mike: As compared to TD and RY, National Bank is very small. As the sixth largest bank, National Bank is mostly present in Quebec with 62% of its revenues earned in this province (2016 report). Its smaller size is currently paying off as National Bank was quicker to develop a strong brand in Wealth Management with Private Banking 1859 and built a highly profitable Financial Market division.

Algonquin Power and Utilies Corp (AQN.TO)

Mark: While Emera continues to hold an interest/shares in Algonquin Power & Utilities, I believe Algonquin is more than capable of thriving on its own – the share price over the last few years has proven it. In the last four years alone, total assets have almost tripled; operating cash flow is up over 400% and total revenue is now over $1 billion from the $200 million-range. Thanks to great results and a growing customer base the dividend yield is a healthy 4% and more dividend increases are on the way.

Sabeel: AQN is the only utility company I am aware of that provides exposure to all three subsectors — electric, gas, and water. Most operations are in the US and the company has been a great performer over the past few years.

Agrium (AGU.TO)

Mike: Agrium is the largest global retailer and distributor of crop inputs. It is also the leader of agricultural nutrients providing farmers with all they need to improve their production. The company shows a less dependent link to potash prices as it counts on other products such as: seed, nutrients, crop protection, nitrogen, and other merchandise & services. It will be interesting to see the new company once it finalizes its mergers of equal with Potash (POT.TO).

Dollarama (TSE:DOL)

Sabeel: The company has been a dividend raiser for 6 consecutive years and has seen some good revenue and earnings growth recently.

What’s the biggest risk with these Canadian dividend stocks?

In conclusion, interest rate exposure is the largest risk these Canadian dividend stocks face. Recently, the Bank of Canada kept their monetary policy unchanged and is unlikely to alter rates until 2018. This is mainly because the central bank kept a modestly constructive outlook of economic growth and consumer inflation. Unfortunately, there has been subdued domestic growth. That being said, expectations of growth for Canada’s largest trading partner the United States, is improving.

The Bank of Canada’s cautious optimism is being supported by recent domestic economic data and global events. All things considered, Canada’s economy remains on the path towards sustainability, but ample uncertainties remain. Notably, ongoing political issues in the U.S. have further clouded the trade outlook as Trump’s agenda is increasingly at risk. Given these risks, it is likely that rates remain unchanged, which should buoy REITS and pipeline and storage companies. Furthermore, large financial institutions will have difficulty making income on lending, but subdued revenue in this sector should be offset by solid gains in capital markets trading.

We’d like to thank the contributors to this article

To the contributors that put the time and effort into making this top list, we thank you. We update this article quarterly, so if you are interested in contributing to the next update, shoot us an e-mail and we will get back to you ASAP.

Mark from MyOwnAdvisor

Mark started investing when he was in his early 20’s. Initially, Mark blindly invested most of his money into big-bank mutual funds and was paying exorbitant fees in the process. He really didn’t know how much these fees would kill his investment returns. Over the years he has read many books and paid close attention to where and how he invests his hard earned dollars. Nobody cares more about his money than he does.

Mark started MyOwnAdvisor to bring his journey to financial independence to life. Personal finance and investing has always been a growing passion for Mark and the quality of Myownadvisor shows he truly has a passion for all things investing.

Sabeel from Roadmap2Retire

Sabeel from Roadmap2Retire is a personal finance and investing blogger. A software designer by profession, he has a passion for economics, business, finance and investing. His personal financial goals are to generate enough passive income to fund his retirement, and along the journey – share his experiences and help the readers.

Mathieu from Stocktrades and Seeking Alpha

I am an individual investor and have been investing part-time for the better part of the past 10 years. I hold an MBA and I am primarily interested in fundamental analysis. I focus on the long term and my portfolio is composed primarily of dividend paying equities. I have a moderate risk profile and I look for growth and value.

Mike from The Dividend Guy

I earned my bachelor degree in finance-marketing, own a CFP title along with an MBA in financial services. Besides being a passionate investor, I’m also happily married with three beautiful children. I started my online venture to educate people about investing and to be able to spend more time with my family. In 2016, I decided to take a leap of faith and left everything behind to travel across North America and Central America with my family. We drove through nine countries and stayed three months in Costa Rica before returning home. This was an eye-opening adventure that led me in 2017 to quit my job in the financial industry and pursue my dream; helping others with their personal finance through my investing websites. I now blog full time at The Dividend Guy Blog and help investors making smart decisions at Dividend Stocks Rock.

We hope you enjoyed this list of the best Canadian dividend stocks for 2017. If you’re looking for a broker to start investing in these stocks, check out our broker review page. Don’t forget to like, share and comment, we would love your input.

Who are your go to companies when it comes to income investing? Did we miss one, maybe two? Do you mostly agree with our list? Let us know in the comments below!

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