23. Rogers Communications
20. Manulife Financial
19. Goeasy Limited
18. Andrew Peller
17. Pembina Pipeline
16. Sunlife Financial
15. TFI International
13. Brookfield Asset Management
12. Atco Gas
10. Bank Of Nova Scotia
9. Bank Of Montreal
8. Canadian National Railway
7. TransCanada Corporation
The 5 Best Dividend Stocks 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 Canadian dividend stocks that will provide you with income in any market environment. That is why we decided to publish this list of the best Canadian dividend stocks for 2019 and beyond.
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. 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.
Why can these Canadian blue-chip companies 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.
Who helped out with this list?
Along with our own opinions, we welcome the opinions of:
- Brian Bollinger from Simply Safe Dividends
- Mark from MyOwnAdvisor
- Mike from The Dividend Guy
- Sabeel from Roadmap2Retire
- Mathieu, a frequent writer on Stocktrades and Seeking Alpha
You can check out their websites by clicking on the links, or checking out our favorite financial bloggers.
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 November 10th 2018.
If you like these dividend stocks, don’t forget to check out our other top stock lists:
Top Oil Stocks
Top Canadian Gold Stocks
Best Stocks To Buy In Canada For Growth
Best Canadian Bank Stocks
Top Canadian Marijuana Stocks
The Best Canadian Lithium Stocks
The Top Tech Stocks To Buy Right Now
Stocktrades list of the best dividend stocks in Canada 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.
The company 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.
The company 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 the company 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.
Brian: Rogers has paid uninterrupted dividends for more than a decade and has built a moat in the telecom space thanks to its massive subscriber base – the company is the largest wireless and cable TV provider in Canada. As a result, Rogers can invest more in its network infrastructure and marketing to fend off rivals. With an excellent balance sheet and recession-resistant cash flow, Rogers enjoys a solid Dividend Safety Score.
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.
#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.
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 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, the company 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.
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.
#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.
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, the company 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. The company’s annual dividend of $2.16 per share is well covered by its adjusted cash flow per share of $3.27.
The company 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, 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 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%).
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.
Brian: Suncor was previously a holding in Warren Buffett’s dividend portfolio, so the company’s outstanding long-term track record of savvy capital allocation is no surprise. For dividend growth investors seeking exposure to the energy sector, Suncor seems like one of the best-managed businesses to consider. The main risk to be aware of is that oil sands have traditionally faced some of the highest extraction and environmental costs, which could be troublesome if global oil prices remain very low.
#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.
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.
Brian: One of the appeals of Brookfield Asset Management is its well-diversified base of assets, which span everything from infrastructure to renewable energy, real estate, and private equity. The company follows disciplined investment habits, which have enabled it to grow its dividend at a double-digit annual rate over the past decade. With plenty of capital, strong industry relationships, and financial expertise, Brookfield Asset Management is a high quality dividend growth stock that is built to last.
#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%.
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
Brian: : As the largest energy infrastructure company on the continent, Enbridge boasts an impressive network of assets used to collect, transport, process, and store oil and gas. Enbridge enjoys long-term contracts that provide solid cash flow visibility and help shield it from volatile energy prices. In fact, the company believes more than 95% of its revenue is insulated from volume and price risk. Despite its high yield and fast distribution growth, income investors should be aware that Enbridge is structured as a conglomerate, composed of numerous subsidiary master limited partnerships (MLPs). MLPs contain a number of unique risks that investors should learn more about here.
#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.
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.
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.
#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.
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.
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.
#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.
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.
#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.
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.
#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%.
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.
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 — 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.
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.
Brian: The telecom industry is one of the most popular sectors for income because of its stability. As one of the largest players in Canada, Telus enjoys scale advantages and maintains a well-diversified stream of cash flow. Most telecom companies are known for high yields and low dividend growth, but Telus offers potential for the best of both worlds. The stock yields over 4%, and management targets 7-10% annual dividend growth through 2019. Investors can view our full thesis on Telus here.
#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%.
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.
#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.
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)
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.
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
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.
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.
Brian: Toronto-Dominion is one of the world’s premier banks with nearly 25 million customers. The firm’s banking operations are conservative in nature, focusing on basic retail activities rather than riskier, more volatile businesses such as tradintg and investment banking. The bank has paid dividends since 1857, highlighting its excellent track record for managing risk, and is capable to continue increasing its payout at a high-single-digit clip going forward. Investors can view our full thesis on Toronto-Dominion here.
Using Canadian Dividend 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 cost to buy the stock. 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 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. 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 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. 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.
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.
Brian from Simply Safe Dividends
Brian Bollinger is President of Simply Safe Dividends, a company that provides online tools and research designed to help investors generate safe retirement income from dividend stocks without the high fees associated with many other financial products. Prior to starting Simply Safe Dividends, Brian was an equity research analyst at a multibillion-dollar investment firm. Brian also is a Certified Public Accountant and triple-majored in finance, accounting and entrepreneurship at Indiana University’s Kelley School of Business, where he graduated in the top 1% of his class.
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 dividend-paying 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 2019. 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!