Top Canadian Dividend Stocks
|Symbol||Complete||More||Market Cap (intraday)||Shares Outstanding||Trailing Annual Dividend Rate||Levered Free Cash Flow||Operating Cash Flow||EPS||Payout %||FCF Ratio||OCF Ratio||Streak||DGR 5YR (%)||DGR 1YR||Yield||Dividend Frequency||Sector||Industry|
|12.ACO-X.TO||0||Here||4,760,000,000||101,100,000.00||1.46||-491,620,000||910,000,000||1.82||80.07||N/A||16.22%||25||14.97||7.50%||3.51||Q||Utilities||Utilities - Diversified|
|18.ADW-A.TO||0||Here||586,800,000||35,980,000.00||0.20||17,810,000||35,600,000||0.46||43.23||40.40%||20.21%||13||8.86||13.89%||1.50||Q||Consumer Defensive||Beverages - Wineries & Distilleries|
|13.BAM-A.TO||0||Here||54,670,000,000||958,510,000.00||0.59||4,690,000,000||3,800,000,000||2.55||23.14||12.06%||14.88%||7||8.81||7.14%||1.03||Q||Financial Services||Asset Management|
|6.BCE.TO||0||Here||51,360,000,000||898,200,000.00||3.02||1,660,000,000||7,380,000,000||3.10||97.42||163.41%||36.76%||10||5.32||5.23%||5.29||Q||Communication Services||Telecom Services|
|9.BMO.TO||0||Here||62,150,000,000||638,380,000.00||3.78||N/A||-17,350,000,000||8.17||46.27||#VALUE!||-13.91%||7||5.15||4.17%||3.86||Q||Financial Services||Banks - Global|
|10.BNS.TO||0||Here||91,000,000,000||1,220,000,000.00||3.28||N/A||-22,530,000,000||6.82||48.09||#VALUE!||-17.76%||8||6.54||3.66%||4.40||Q||Financial Services||Banks - Global|
|2.CM.TO||0||Here||49,550,000,000||443,110,000.00||5.32||N/A||-10,900,000,000||11.65||45.67||#VALUE!||-21.63%||8||6.80||4.70%||4.75||Q||Financial Services||Banks - Global|
|22.EMA.TO||0||Here||10,740,000,000||232,970,000.00||2.26||-584,250,000||1,540,000,000||1.09||230.61||-90.12%||34.19%||12||10.07||3.98%||4.89||Q||Utilities||Utilities - Diversified|
|11.ENB.TO||0||Here||95,750,000,000||2,020,000,000.00||2.62||-1,090,000,000||9,270,000,000||0.97||282.04||-485.54%||57.09%||23||16.33||9.99%||5.60||Q||Energy||Oil & Gas Midstream|
|3.FTS.TO||0||Here||20,050,000,000||426,600,000.00||1.70||-815,370,000||2,830,000,000||2.30||74.24||-88.94%||25.63%||45||6.83||5.88%||3.64||Q||Utilities||Utilities - Regulated Electric|
|19.GSY.TO||0||Here||654,500,000||14,800,000.00||0.86||N/A||-185,810,000||2.93||29.28||#VALUE!||-6.85%||4||21.49||25.00%||2.02||Q||Financial Services||Credit Services|
|20.MFC.TO||0||Here||41,960,000,000||1,960,000,000.00||0.87||N/A||19,590,000,000||1.22||70.90||#VALUE!||8.70%||5||11.84||13.64%||4.13||Q||Financial Services||Insurance - Life|
|21.OTEX.TO||0||Here||13,340,000,000||267,340,000.00||0.59||722,140,000||836,960,000||0.97||60.56||21.84%||18.85%||6||21.16||15.00%||1.20||Q||Technology||Software - Application|
|17.PPL.TO||0||Here||24,480,000,000||508,040,000.00||2.21||32,880,000||2,100,000,000||2.44||87.01||3414.75%||53.47%||7||6.37||5.56%||4.64||M||Energy||Oil & Gas Midstream|
|23.RCI-B.TO||0||Here||37,480,000,000||403,660,000.00||1.92||-408,880,000||4,290,000,000||3.99||48.12||-189.55%||18.07%||0||1.99||0.00%||2.69||Q||Communication Services||Telecom Services|
|4.RY.TO||0||Here||144,520,000,000||1,440,000,000.00||3.77||N/A||-31,270,000,000||8.36||45.10||#VALUE!||-17.36%||8||8.30||4.26%||3.74||Q||Financial Services||Banks - Global|
|16.SLF.TO||0||Here||28,280,000,000||603,270,000.00||1.90||N/A||0||4.14||52.99||#VALUE!||#VALUE!||4||5.76||5.26%||4.11||Q||Financial Services||Insurance - Diversified|
|14.SU.TO||0||Here||68,310,000,000||1,580,000,000.00||1.44||4,050,000,000||10,580,000,000||2.02||71.29||56.18%||21.50%||16||14.55||12.50%||3.36||Q||Energy||Oil & Gas Integrated|
|5.T.TO||0||Here||28,070,000,000||599,520,000.00||2.06||-331,250,000||4,090,000,000||2.50||82.40||-372.83%||30.20%||15||9.08||3.81%||4.39||Q||Communication Services||Telecom Services|
|1.TD.TO||0||Here||136,570,000,000||1,830,000,000.00||2.61||N/A||-47,690,000,000||6.01||43.43||#VALUE!||-10.02%||8||10.01||11.67%||3.49||Q||Financial Services||Banks - Global|
|7.TRP.TO||0||Here||51,740,000,000||922,120,000.00||2.69||-3,850,000,000||5,910,000,000||3.70||72.84||-64.43%||41.97%||18||8.45||10.40%||4.84||Q||Energy||Oil & Gas Midstream|
One of the best ways to increase the value of your stock portfolio while protecting it from adverse market movements is to add Canadian dividend stocks that will provide you with income in any market environment. That is why we decided to publish this Canadian dividend stocks list For 2019.
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. These aren’t exactly the best Canadian dividend stocks to buy and hold as their dividend payouts will eventually catch up to them and their share price will start to drop. 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.
Looking for growth to pair with your dividends?
Why can these Canadian dividend stocks hold up in sub-par market conditions? It’s simple:
- Management has to be particularly frugal when they are forced to give out a dividend
- Dividend-paying companies tend to have more earnings
- During a market crash, an attractive yield often makes investors keep purchasing dividend stocks, saving the price
There is no doubt dividend stocks have a place in every investor’s portfolio. So here they are, the top 23 dividend stocks in Canada for 2019. These aren’t necessarily the highest paying dividend stocks, but you can run into trouble looking only for high yields. These are simply the best and safest dividend stocks you can own on the TSX today.
If you like these dividend stocks, don’t forget to check out our other top stock lists:
Best Canadian Dividend Stocks List For 2019
#23 — Rogers Communications
Rogers Communications kicks off the list of the top dividend stocks for 2019. Rogers Communication, Inc. is a diversified communication and media company. It is the largest wireless and cable TV provider in Canada reaching out to 95% of the Canadian population.
The company commands a 34% telecom subscriber share with 10.6 million wireless subscribers in Canada. Rogers Communication also has 1.8 million television, 2.2 million internet, and 1.1 million phone subscribers. It is known for delivering the fastest internet speed to its customers.
Almost all of Rogers Communication’s business is in Canada. The company has diversified revenue streams comprising of wireless (57% of total revenue), cable (25%), media (15%) and business solutions (3%). More than 90% of total revenues are from services rendered and 8% from equipment sales.
Rogers has a portfolio of media assets that reaches Canadians from coast to coast. Sportsnet which is one of its TV network is the number one sports media brand in Canada. The company has the lowest churn rate amongst postpaid customers.
Rogers owns an extensive network infrastructure consisting of hybrid fibre-coax cable network which is highly scalable. Rogers’ multi-band LTE wireless network coverage reaches out to ~95% of Canada’s population and its prime 700 MHz spectrum covers 91% of Canada’s population.
A strong balance sheet, a huge sticky subscriber base, extensive network infrastructure and diverse businesses are Rogers Communications’ key competitive advantages.
There exists a scenario of significant growth in data consumption to the extent that the number of connected devices per home is expected to increase to 50 by 2022 from 11 today. Rogers Communication is in a good position to serve this surge in data needs.
The company has compounded its dividend by an impressive 37% over the last decade. However, the pace of growth has declined over the recent years. Rogers Communications also has a high payout ratio of 78%, but that should not be a major concern as the company’s cash flows are safe and recurring in nature.
Rogers Communication has indicated that operating profits should increase in the mid-single digit range. Since Rogers has a high payout ratio, most of its dividend increase will likely come from earnings. The company last raised its payout by 5% and should continue its single digit dividend growth streak in the future as well.
#22 — Emera
Dropping way down on our 2019 list of the top Canadian dividend stocks is Emera. Headquartered in Halifax, Emera is one of Canada’s largest diversified utility companies with a market capitalization of $10 billion.
Looking for Canadian utilities?
Emera 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 2017, the company posted almost $1 billion in operating cash flow and their dividend is fully covered by its earnings, of which 90% is regulated.
Its current yield of 5.54% is extremely attractive and is almost a full percentage point higher than some of its 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.
Unfortunately, dividend growth is expected to slow. In August, Emera updated its guidance and anticipates growing dividends by 4-5% through 2021. This is down from 8% previously. As a result it has dropped from 11 to 22 on our list.
#21 — Open Text Corp
A newcomer to our list of Canadian dividend stocks for 2019 is OpenText.
Open Text is one of the few dividend growth companies in the technology sector. In 2018, the company became a Canadian Dividend Aristocrat having raised dividends for five consecutive years. Open Text operates in the $40 billion enterprise information management market (EIM) where it designs, develops, markets and sells EIM software and solutions.
Looking for tech stocks?
Although it has a low yield, it has one of the highest dividend growth rates among Canadian Aristocrats. Since its streak began, it has consistently raised dividends by approximately 15% annually. At this rate, Open Text will double dividends in less than five years.
On a forward P/E basis, the company’s payout ratio falls below 20%. An investment in Open Text is appropriate for both growth and income investors. Since 2007, it has made two dozen acquisitions which has propelled annual revenue growth of 14% over the same time period.
#20 — Manulife Financial
Manulife drops from number 19 to 20 for 2019 on our list of the best Canadian dividend stocks.
After years of dividend stagnation, Manulife has once again become a reliable dividend growth company. The company raised dividends twice in 2018. This past February, the company announced a 7% dividend raise and in November, it announced another raise of 14%. It marks the fifth consecutive year of dividend growth. As a result, the company will regain its status as a Canadian Dividend Aristocrat. On a forward P/E basis, the company’s payout ratio is only 32%. Manulife has plenty of room to keep its dividend streak alive.
Once forgotten, insurance companies are making a comeback thanks to rising interest rates. Over the past five years, Manulife has grown core earnings by a compound annual growth rate (CAGR) of 15%. Asia has been a bright spot for the company. Asia new business value has grown at a CAGR of 38% since entering the market in 2014.
Manulife’s wealth asset management (WAM) segment has also enjoyed significant growth. WAM assets under management have grown by 20% annually over the past five years and the segment’s earnings have grown by an average of 15% over the same time frame.
As the economy strengthens and interest rates rise, Manulife is well positioned to reward income investors.
#19 — Goeasy Limited
One of the best Canadian dividend stocks to own in 2019 is Goeasy Limited.
Goeasy is a full-service provider of goods and alternative financial services. It operates in two segments: easyfinancial and easyhome. Goeasy has quietly become a dividend growth company. A new entry on the dividend list, its 58% anticipated growth rate through 2019 also landed the company on our Top Growth Stocks list.
The company’s dividend has more than doubled since 2014. In February, the company raised dividends by 25% and marked the fourth consecutive year of dividend growth.
Despite the rapid pace of dividend growth, its payout ratio is still sitting at a respectable 32%. There is no doubt that the company will become a Dividend Aristocrat next year as it has ample room for further dividend growth.
The company’s easyfinancial segment has been fueling the company’s growth. It recently expanded into Quebec and expanded its loan offerings. Previously, the company was focused on unsecured loans of $500-$15,000. Recently, Goeasy expanded product offerings to unsecured loans of $15,000-$30,000, an $18 billion market.
#18 — Andrew Peller
Andrew Peller produces and markets wine, spirits, and wine related products. If you are worried about tis small stature and $660 million market cap, don’t be. It has a long and storied history with roots dating back to 1961.
It’s one of the smallest Canadian Dividend Aristocrats and has proven to be on of the most reliable dividend growth companies in Canada. Its dividend growth rate is on the rise and its more recent dividend raise of 14% is above its three and five-year dividend growth rates.
Over the past five-years, Andrew Peller has grown earnings by a compound annual growth rate of 20%. Although growth is expected to slow to approximately high-single digits over the next couple of years, it doesn’t consider future acquisitions.
Since 1995, the company has purchased and integrated 17 brand acquisitions totaling more than 200 million. As it continues to expand in adjacent categories, there is also a real opportunity in the cannabis sector. Although the company has not publicly commented, it has not shied away from expanding its product base in the past.
#17 — Pembina Pipeline Corp
Pembina Pipeline stays at number 17 our 2019 list of the top dividend stocks in Canada.
Pembina Pipeline is one of North America’s premier pipeline companies. It is a fully-integrated midstream company with a diversified asset portfolio of crude oil, condensate, NGL and gas. A member of the TSX 60 index, Pembina has high quality assets that has enabled them to return almost $5.8 billion in dividends to shareholders since 1998. Pembina is a Canadian Dividend Aristocrat having raised dividends for six consecutive years.
It recently surprised with a 5.6% raise, which marks its third raise in the last year. Pembina’s annual dividend of $2.16 per share is well covered by its adjusted cash flow per share of $3.27.
Pembina has an exceptional record of delivering projects on-time and on budget. Since 2013, the company has put into operation 13 significant projects. Of those, not a single one was over budget. In fact, nine of them came in under-budget. Likewise, only two suffered from small delays, while another four were in-service ahead of schedule.
The company has an addition $2 billion in projects coming online by 2020. It expects earnings per share to jump 31% in 2018. Its fee for service model and long-term contracts underpin the safety of the company’s dividend well into the future.
#16 — Sun Life Financial
In at number 16 on our list of the best long term dividend stocks is Sun Life Financial.
Sun Life continues to impress us, and you should look for the stock to be a little higher on the list come next update. 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, Sunlife 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 1.9 billion Canadian dollars in 2018.
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.
#15 — TFI International
TFI International is a transportation and logistics company with operations in North America.
The announcement of a tri-lateral agreement between Canada, Mexico and the United-States was welcomed news for the company. It has significant cross-border trading and the deal ensures none of its products will be subject to un-welcomed tariffs.
TFI has a solid seven-year dividend growth streak and as such, is a Canadian Dividend Aristocrat. Unlike many of the Aristocrats, its dividend growth rate is trending upwards. In October, the company raised dividends by 14.3%, the highest dividend growth since its streak began.
The company saw a significant spike in its financial performance in 2018. Margins are expanding, and earnings are growing at a triple-digit pace. The best part? Growth is expected to continue. Analysts expect the company to grown earnings by the mid-teens over the next few years.
On the back of increased earnings and cash flows, the company is an overlooked dividend star in the making.
#14 — Suncor Energy
Suncor Energy Is definitely one of the best Canadian dividend stocks to buy and hold for 2019, and actually topped our list of the best oil and gas stocks to buy. Suncor Energy is the fifth largest North American energy company and one of the largest independent energy companies in the world. Suncor’s operations include oil sands development and upgrading, offshore oil and gas production, petroleum refining and product marketing.
Suncor has classified its operations into the following segments – Oil Sands (45% of 2016 FFO), exploration and production (22%), refining and marketing (44%), and corporate, energy trading and eliminations (-10%).
Another crucial industry other than oil and gas
As Canada’s premier integrated energy company, Suncor has an extensive history of 50 years as an energy producer. Suncor Energy pioneered commercial crude oil production from the oil sands of northern Alberta in 1967. It is the largest East Coast oil producer and is currently developing Canada’s Athabasca oil sands, which is one of the world’s largest petroleum resource basins.
Suncor Energy owns a balanced mix of high-quality mining, in situ and upgrading oil and gas portfolio. The company also has a huge offshore portfolio with more than 410 million barrels of crude oil reserves in strategic geographic locations like the U.K. North Sea, Canada’s east coast and Norway. The company is focusing on core assets and is streamlining its portfolio by divesting non-core assets.
Suncor has a strong presence in the upstream, midstream and downstream parts of oil supply chain. This integrated model has helped Suncor reach an industry leading position in both funds from operations and discretionary free cash flow per barrel. Suncor Energy has consistently maintained its FFO higher than its capital and dividend requirements, providing a layer of safety for income investors.
If February, Suncor raised its dividend for the 16th consecutive year when it announced a healthy 12.5% increase to its quarterly dividend. The company has successfully managed to increase dividends despite the volatility in oil prices.
Suncor plans to achieve 10% annual growth in production from 2016-2019. Dividends are expected to grow in line with production, which implies future dividend growth rate in the high-single-digit range.
#13 — Brookfield Asset Management
Brookfield jumps a spot to number 14 on our 2019. 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 1.54%, their current payout ratio of 30% leaves ample room for continued dividend growth moving forward.
Brookfield Asset Management is a global alternative asset manager focusing on real estate, infrastructure, renewable energy as well as private equity.
Infrastructure investments accounted for the largest portion of investments at 46%, followed by real estate (21%), private equity (19%) and renewable power (14%) over the last twelve months. Over 85% of its revenues come from long-term investments.
The firm serves institutional and retail clients through its four partnerships – Brookfield Property Partners, Brookfield Infrastructure Partners, Brookfield Renewable Partners and Brookfield Business Partners. All these businesses seek to give long-term returns in the 12 -15% range.
Starting out as a builder and operator of electricity and transport infrastructure in Brazil almost 115 years ago, today Brookfield Asset Management has become a leading global asset manager with $250 billion worth of assets under management. The firm invests in large asset classes i.e. businesses worth $50-$100 billion.
Brookfield Asset Management has more than 100 offices in over 30 countries and invests in North America, EMEA, South America and Asia-Pacific regions. It acquires high-quality assets at favorable valuations and finances them through low cost, long-term capital.
The firm’s long-standing experience and reputation enable it to raise billions of dollars from institutional investors. Brookfield Asset Management is in a good position to access multiple sources of capital and allocate it to the best available opportunities globally.
Worldwide presence, a highly liquid balance sheet, strong investment expertise across asset classes and ownership of diversified assets differentiate Brookfield Asset Management from competitors.
Brookfield Asset Management has compounded its dividend in the double-digit range over the last decade and the pace has increased in the recent years (18.5% CAGR over the last three years).
The firm recently raised its payout by more than 7% and is expecting a 22% total return over the next five years.
#12 — Atco Gas
Atco and big-brother Canadian Utilities (CU.TO) are subsidiaries of Atco Group of Companies. With a market cap half the size of CU, Atco often gets overlooked by investors. Don’t make the same mistake.
The company has the fourth-longest dividend growth streak in Canada at 24 years. Perhaps even more impressive, it has the highest dividend growth rate among all Canadian Dividend Aristocrat Utility companies. Its 10, 5 and 3-year average all over around 15%.
Don’t expect this to change anytime soon. Atco also has the lowest payout ratio on a trailing and forward twelve-month earnings basis. As such, expect it to maintain double-digit dividend growth well into the future.
#11 — Enbridge
Enbridge stays steady in 2019 at #12, one up from last years list. If you want one of the highest dividend paying stocks in Canada, look no further than Enbridge. Recently, Enbridge has taken an absolute beating in share price, and their dividend yield is looking very lucrative right now.
The company is Canada’s largest energy company with a market capitalization of $69 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 6.90% 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.
The company is the largest energy infrastructure company in North America, engaged in the collection, transportation, processing and storage of oil and gas. Often criticized for its complicated structure, the company expects to consolidate all of its sponsored vehicles. Its offer to purchase all outstanding shares of Spectra Energy, Enbridge Energy Services and Enbridge Income Fund Holdings is expected to close by end of year.
Enbridge transports 28% of the crude oil produced in North America. It is Canada’s largest natural gas distributor and also transports 23% of the natural gas consumed in the U.S. The company has a huge retail customer base comprising of 3.6 million customers in Ontario, Quebec, New Brunswick and New York.
Enbridge operates through five reporting segments – Liquids Pipelines (85% of 2016 EBIT), Gas Distribution (12%), Gas Pipelines and Processing (4%), Green Power and Transmission (4%), and Energy Services (-4%).
Commodity sales accounted for 66% of total 2016 revenues, followed by transportation and other services (27%), and gas distribution sales (7%). The company typically enters into long-term contracts proving strong cash flow visibility. More than 95% of its revenue is insulated from volume and price risk.
With more than six decades of existence, Enbridge operates the world’s longest crude oil and liquids network. It also owns interests in nearly 3,000 MW of renewable generation capacity.
Enbridge owns a huge natural gas pipeline network with a total length of 205,424 miles and crude oil pipeline network of 18,666 miles. Its merger with Spectra Energy has resulted in the creation of the largest energy infrastructure company in North America.
It is difficult for new entrants to build large, balanced and diversified asset portfolio, huge customer base and an extensive network of distribution lines which provide a strong competitive moat to Enbridge’s business.
The company has paid dividends for over 64 years and raised them for 22 years in a row. Enbridge’s dividend grew by 16% CAGR over the last five years and the most recent hike was 15%.
#10 — Bank Of Nova Scotia
At number 10 on our list of the best performing Canadian dividend stocks for 2019 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.
Invest in one of the strongest industries in the country
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.
In August, the bank announced another 3.66% dividend raise, its second of the year.
#9 – Bank Of Montreal
BMO moves up a spot on our list of the best dividend stocks of 2019.
The Bank of Montreal is a financial services corporation and its 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 $52 billion in 2017. 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 3.8% dividend yield, which means that you will collect 3.8% on the capital you use to purchase the stock.
#8 — Canadian National Railway
Making the jump from 9 to 8 this year is CNR. In terms of buy and hold stocks, CNR is up there as one of the best in Canada.
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 its current yield of 1.85% is one of the lowest on this list, it also has the highest dividend growth rate and its low yield has been more than offset by significant share price appreciation to the tune of 337% over the past 5-years alone.
#7 — TransCanada Corp
Jumping up one spot to #7 on our list of the best Canadian dividend stocks for 2019 is TransCanada Corp.
In terms of the best dividend stocks for retirement income, TransCanada’s lucrative yield definitely makes them a stock to consider. 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 its 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 5% dividend yield.
#6 — BCE
One of the highest dividend paying stocks in the Telecom industry, BCE jumps to number 6 on our list of the top dividend stocks in Canada for 2019.
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 2017 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 5.53%.
#5 — Telus
Telus jumps to number 5 this year on our list. 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 $0.505 today.
The company has 12.9 million customer connections, including 8.8 million wireless subscribers, 1.7 million Internet subscribers, 1.3 million residential network access lines and 1.1 million TELUS TV customers.
Wireless Services account for about 57% of total revenue, Wireline Data (residential network access lines, internet subscribers, TV subscribers) for 32%, and Wireline Voice for the remaining 11% of the total revenue.
TELUS is a leading network provider reaching 99% of Canadians with 4G LTE and HSPA+ technologies. The company’s focus on continuously improving customer experience has resulted in customers with one of the highest loyalty rates in the world.
A growing appetite for data should further support TELUS in retaining its leading market share position in the Canadian telecom industry. The telecom industry is highly capital-intensive with stringent regulations leading to high entry barriers. Pricing power, a large loyal subscriber base and extensive asset base are the company’s major competitive strengths.
TELUS has increased its dividend consecutively since 2002, growing it at more than 10% CAGR over the past decade. The company is targeting 7%-10% annual growth through 2019 as a part of its multi-year dividend growth program.
Though TELUS has a high payout ratio of 82%, recession-proof cash flows should support its dividend plan.
#4 — Royal Bank Of Canada
Royal Bank keeps climbing our list of the best Canadian dividend stocks in 2019. It’s not only an excellent dividend stock, but one of the best bank stocks to buy now. You know when you’ve got a stock like RY on your list all the way up at number 4, 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 $11.5 billion in 2017.
Of course with RBC being a bank the stock price is sensitive to interest rates and will rise when yields begin to accelerate higher. As of writing, Royal Bank of Canada has a dividend yield of 3.84%.
#3 — Fortis
Fortis is one of Canada’s most notable dividend companies and its 43 years of consecutive dividend growth is second all-time among Canadian companies. That’s why it sits at #3 on our list of dividend stocks to buy for 2019.
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 returning 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.
#2 — Canadian Imperial Bank of Commerce(CM)
The runner-up on our list of top Canadian dividend stocks is the Canadian Imperial Bank of Commerce. Above all, this giant financial institution focuses on service to individuals, small business, commercial, and corporate banking. It also service institutional clients and are active in capital markets trading.
It recently made its second purchase south of the border as it expands beyond the Canadian market.
The capital markets unit trades products such as foreign exchange, bonds, and equities around the globe. CIBC has a net income of 4.7 billion in 2017 and revenues of 16.2 billion. Being a bank, it is obviously 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. As of writing, the company has a dividend yield of 4.8%.
CIBC has the lowest payout ratio of the Big five, six if you include National Bank. As a result, it is best positioned to continue dividend growth well into future.
#1 — Toronto Dominion Bank
The winner of our top dividend stocks in 2019 is yet again Toronto Dominion Bank. For the 3rd year in a row TD has claimed our top dividend stock title. 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 boasts a dividend yield of 3.7%.
Toronto Dominion Bank is considered America’s “most convenient bank” and serves customers through 2,400 retail locations in North America. The bank was named one of the world’s safest banks and the safest bank in Canada for the sixth year in a row by Global Finance.
The bank has a strong retail focus (91% of earnings) with customers mostly comprising of low risk businesses having stable, consistent earnings. About 61% of its total earnings comprise of Canadian retail (TD Canada Trust, TD Auto Finance Canada, TD Wealth, TD Direct Investing and TD Insurance) sector, followed by 30% U.S. retail (TD Bank, TD Auto Finance, TD Wealth, TD Ameritrade) and 9% wholesale (including TD Securities).
Toronto Dominion bank operates in 4 of the top 10 metropolitan areas and 7 of the 10 wealthiest states in the USA. It also holds #1 or #2 in market share for most retail products in Canada. The bank is well positioned to leverage new growth opportunities through its large footprint in North America.
With a 150-year old legacy, the bank is highly rated by major credit rating agencies. Good customer service and convenience, strong customer relationships and a focus on operational efficiency are Toronto Dominion Bank’s key differentiators.
The bank has increased dividends for six years in a row. It has also delivered higher earnings for the seventh consecutive year. It raised its payout by more than 12% CAGR over the last decade and 9% most recently.
Toronto Dominion Bank is targeting 7-10% adjusted EPS growth over the medium term. With a reasonable payout ratio of 45%, the bank should continue growing its future dividends in the mid-to-high single digit range.
These are the best stocks to diversify your portfolio
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 yearly dividend by the stocks price. For example, if you paid 100 dollars for 1 share and the annual dividend is 5 dollars, then your dividend yield is 5%.
You should also be diversifying your portfolio by adding stocks 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. Maybe not as risky as say the Canadian cannabis industry, but risky nonetheless.
Therefore if you would like to avoid direct exposure to oil and gas risk, you should avoid oil and gas stocks 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. If you’re looking for a little more speculation when it comes to your stock purchases, check out our top 7 stocks to watch list. It contains some high growth potential stocks that you could blend into your dividend portfolio to create balance.
What’s the biggest risk with these Canadian dividend stocks?
In conclusion, interest rate exposure is the largest risk these Canadian dividend stocks face. 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.
What are your go to stocks 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!