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. Income stocks are extremely popular for new investors learning how to invest in stocks.
What are the most reliable dividend stocks?
**August 2020 Update!! Traffic has been slowly dropping to our pandemic dividend cut page, so we’ve decided to blend the table into this article. The table can be seen below!**
Optimally, you want to look for dividend stocks with long growth streaks and double digit growth.
Some sectors of the stock market provide a lot of options, while others only a few. For example, the Canadian tech sector currently has two aristocrats, Enghouse Limited (TSX:ENGH) and our first stock on this list OpenText (TSX:OTEX).
On the contrary, the utility sector contains some of the most reliable income companies in the country. There are a total of 10 aristocrats with companies like Fortis and Canadian Utilities almost at Dividend King status (over 50 years of consecutive growth).
So what Canadian companies have cut dividends during the pandemic?
|Ticker||Name||Aristocrat/ All Star||Growth Streak||Old Div||New Div||% cut||Date||Comments|
|RME||Rockey Mountain Dealerships||No||N/A||$0.06||$0.015||75.00%||16/06/2020||Second Cut.|
|CWX||Canwel Building Materials||No||N/A||$0.14||$0.120||14.29%||15/06/2020|
|CMG||Computer Modelling Group||No||N/A||$0.10||$0.05||50.00%||27/05/2020|
|TPX.B||Molson Coors||NO||N/A||$0.75||$0.00||100.00%||22/05/2020||Dividend Suspended.|
|CHW||Chesswood Group||NO||N/A||$0.035||$0.00||100.00%||15/05/2020||Second cut. Dividend Suspended.|
|BTB.UN||BTB REIT||NO||N/A||$0.42||$0.30||28.57%||14/05/2020||Reflected annually.|
|CSW.A||Corby Spirits & Wine||No||N/A||$0.22||$0.20||9.09%||13/05/2020|
|LNR||Linamar||NO||N/A||$0.12||$0.06||50.00%||13/05/2020||Dividend cut - temporarily|
|ESI||Ensign Energy Services||No||N/A||$0.06||$0.00||100.00%||11/05/2020||Dividend Suspended.|
|FEC||Fronterra Energy||No||N/A||$0.205||$0.00||100.00%||06/05/2020||Dividend Suspended.|
|WEF||Western Forest Products||No||N/A||$0.0225||$0.00||100.00%||06/05/2020||Dividend Suspended.|
|CRWN||Crown Capital||No||N/A||$0.150||$0.00||100.00%||05/05/2020||Dividend Suspended|
|TOG||Torc Oil & Gas||No||N/A||$0.005||$0.000||100.00%||05/05/2020||Second Cut. Dividend Suspended.|
|ZZZ||Sleep Country Canada||Yes||5||$0.195||$0.00||100.00%||04/05/2020||Dividend Suspended.|
|GIL||Gildan Activewear||Yes||9||$0.1550||$0.00||100.00%||30/04/2020||Dividend Suspended.|
|GMP||GMP Capital||NO||N/A||$0.025||$0.00||100.00%||29/04/2020||Dividend Suspended.|
|RME||Rockey Mountain Dealerships||No||N/A||$0.1225||$0.06||51.02%||29/04/2020|
|CFX||CanFor Corp||No||N/A||$0.0625||$0.00||100.00%||22/04/2020||Dividend Suspended.|
|RCH||Richelieu Hardware||Yes||10||$0.063||$0.00||100.00%||20/04/2020||No dividend declared|
|CEU||CES Energy Services||No||N/A||$0.015||$0.00||100.00%||16/04/2020||Dividend Suspended. Second Cut. Reflected Annually|
|PEY||Peyto Exploration||No||N/A||$0.06||$0.01||83.33%||15/04/2020||Monthly to Quarterly|
|VET||Vermillion Energy||No||N/A||$0.02||$0.000||100.00%||15/04/2020||Dividend Suspended. Third cut.|
|AFN||Ag Growth International||No||N/A||$2.4000||$0.600||75.00%||14/04/2020|
|SGY||Surge Energy||No||N/A||$0.01||$0.000||100.00%||14/04/2020||Dividend Suspended. Second Cut.|
|IVQ||Invesque||No||N/A||$0.74||$0.00||100.00%||10/04/2020||Dividend Suspended Temporarily. Reflected Annually|
|IVQ.UN||Invesque||No||N/A||$0.74||$0.00||100.00%||10/04/2020||Dividend Suspended Temporarily. Reflected Annually|
|CAE||CAE Inc||Yes||12||$0.11||$0.00||100.00%||06/04/2020||Dividend Suspended Temporarily|
|CHR||Chorus Aviation||No||N/A||$0.12||$0.00||100.00%||06/04/2020||Dividend Suspended Temporarily|
|MTY||MTY Group||No||2||$0.185||$0.00||100.00%||06/04/2020||Dividend Suspended Temporarily|
|CVE||Cenovus||No||N/A||$0.045||$0.00||100.00%||02/04/2020||Dividend Suspended Temporarily|
|CWL||Caldwell Partners||No||N/A||$0.0225||$0.00||100.00%||02/04/2020||Dividend Suspended Temporarily|
|CAL||Caledonia Mining||No||N/A||$0.075||$0.00||100.00%||01/04/2020||Dividend Suspended Temporarily|
|AW-UN||A&W Royalties||Yes||5||$0.191||$0.00||100.00%||31/03/2020||Dividend Suspended Temporarily. Reflected Annually|
|DIV||Diversified Royalty||No||N/A||$0.235||$0.20||14.89%||31/03/2020||Reflected Annually|
|SES||Secure Energy Services||No||N/A||$0.300||$0.030||90.00%||25/03/2020||Reflected Annually|
|BPF-UN||Boston Pizza||No||N/A||$0.115||$0.00||100.00%||24/03/2020||Second Cut, Suspended Temporarily|
|RECP||Recipe Unlimited||No||N/A||$0.118||$0.00||100.00%||24/03/2020||Dividend Suspended Temporarily|
|SRV-UN||Sir Royalty Income Fund||No||N/A||$0.0875||$0.00||100.00%||23/03/2020||Dividend Suspended Temporarily|
|DOO||BRP Inc.||No||N/A||$0.10||$0.00||100.00%||20/03/2020||Dividend Suspended|
|HOT.UN||American Hotel Properties||No||N/A||$0.05||$0.00||100.00%||20/03/2020||Dividend Suspended Temporarily|
|HWO||High Artic Energy||No||N/A||$0.02||$0.00||100.00%||20/03/2020||Dividend Suspended|
|MTL||Mullen Group||No||N/A||$0.05||$0.00||100.00%||20/03/2020||Dividend Suspended for 3 months|
|BCI||New Look Vision||No||N/A||$0.15||$0.00||100.00%||19/03/2020||Dividend Suspended|
|SWP||Swiss Water Decaf||No||N/A||$0.0625||$0.00||100.00%||19/03/2020||Dividend Suspended|
|GH||Gameshost||No||N/A||$0.0575||$0.00||100.00%||17/03/2020||Dividend Suspended Temporarily|
|CJ||Cardinal Energy||No||1||$0.015||$0.00||100.00%||16/03/2020||Dividend Suspended Temporarily|
|PSK||Prairie Sky||No||N/A||$0.78||$0.24||69.23%||16/03/2020||Reflected Annually|
|SCL||Shawcor||No||N/A||$0.15||$0.00||100.00%||16/03/2020||Dividend Suspended Temporarily|
|TOG||Torc Oil & Gas||No||N/A||$0.025||$0.005||80.00%||16/03/2020|
|VET||Vermillion Energy||No||N/A||$0.115||$0.02||82.61%||16/03/2020||Second Cut|
|CEU||CES Energy Services||No||N/A||$0.060||$0.0150||75.00%||12/03/2020||Reflected Annually|
|TOT||Total Energy||No||N/A||$0.06||$0.00||100.00%||12/03/2020||Dividend Suspended|
|HNL||Horizons North Logistics||No||N/A||$0.02||$0.00||100.00%||11/03/2020||Dividend Suspended|
|BNE||Bonterra Energy||No||N/A||$0.07||$0.00||100.00%||10/03/2020||Dividend Suspended|
|VET||Vermillion Energy||No||N/A||$0.23||$0.115||50.00%||06/03/2020||First Cut|
Do Canadian bank stocks pay dividends?
This is a question we get a lot here at Stocktrades, as investors have no doubt heard that the banking sector is one of the most reliable in the world because of strict regulations.
After all, Canadian banks managed to maintain their payments during the financial crisis of 2008, while other financial institutions were slashing dividends at a rapid pace.
There’s plenty of bank stocks on this list, but if you’re looking for major companies, head to our list of the Best Canadian Bank Stocks to get more in depth research.
What are the 10 highest paying dividend stocks?
Another question we get multiple times a day here at Stocktrades, investors are wondering what the highest yielding stocks are in the country right now. We used our dividend screener to pull these up (as of June 20, 2020):
- FEC.TO – 20.71%
- CWX.TO – 15.82%
- AD.TO – 15.39%
- BRE.TO – 13.55%
- HR.UN – 12.88%
- BPY.UN – 12.86%
- SRT.UN – 11.82%
- WJX.TO – 10.85%
- SOT.UN – 10.74%
- CHE.UN – 10.49%
One important thing to note however, is we do not advocate chasing high yielding stocks at all. All of these high yielding stocks listed above are ranked extremely poor by our dividend safety screener over at Stocktrades Premium, which is proven to be able to detect cuts.
As such, we suggest you keep reading and discover the best quality income stocks instead of focusing solely on yield.
This list of Canada’s top dividend stocks takes 3 things into consideration
The growth, safety and current yield of the dividend.
A high yielding income stock may be placed lower on this list due to safety, and a low yielding stock could be placed high on this list due to the company’s dividend growth.
This mid year update also has one important factor tied in to our rankings, and that is the COVID-19 crisis.
Stocks that are defensive in nature and more reliable during economic downturns have saw an increase in ranking. You’ll also notice that tech stocks are becoming more prominent on the list, as we are seeing how important it is during times like this.
Just because a stock is listed high on this list doesn’t necessarily mean it is a poor income stock. Remember, there are over 3000 stocks trading on the TSX and the TSX Venture. This is only 32 of them.
This article also has contributions from some excellent bloggers. You’ll see links in the stocks they’ve suggested, as well as bios at the bottom of the pages.
With all that being said, lets kick our list of the best income stocks off with a popular tech option.
**Writer Daniel Kent is long TFII.TO, ENB.TO, T.TO, FTS.TO, RY.TO, TD.TO
Looking for the best Canadian dividend stocks in video format? Watch our piece below
This video originally appeared on Youtube. Watch our top Canadian dividend stock video on Youtube here.
What are the best dividend stocks in Canada?
Canada's Top Dividend Stocks For 2020
|Stock||Price||Price Jan 1||YTD Gains||Yield||Sector|
|10. OTEX.TO||57.72||57.65||0.12%||1.64%||Info Technology|
10. Opentext (OTEX.TO)
Tech companies are performing extremely well during the COVID-19 pandemic, and I think investors are realizing that tech is not necessarily a sector for the high-growth risk takers. In fact, moving forward we can expect it to become a necessity in every Canadians portfolio.
Back to Opentext, the company specializes in providing Information Management Software, and has just recently entered 2 partnerships that are sure to keep its dividend growing at a fast pace. The company recently partnered with Google’s cloud division, meaning that its applications will soon be available on Google’s cloud platform, along with the integration of its applications on popular Google apps like Google Drive and Google Sheets.
Opentext also recently teamed up with Mastercard, who’s aim is to use the companies assets to increase financing efficiencies in the automobile sector. Opentext has a small yield of only 1.78% at the time of writing, but the reason it is on this list of top income stocks is primarily due to its growth.
The company is a Canadian Dividend Aristocrat, raising dividends for 7 straight years.
Its dividend only accounts for 23% of free cash flows, and is growing at an annual pace of over 15% in the last 5 years. The dividend has slown somewhat, considering OpenText used to have a dividend growth rate north of 20%, but we aren’t concerned. There is still excellent growth opportunities with the company.
<h2id=”enb”>9. Enbridge (ENB.TO)
**This contribution comes from Mike over at The Dividend Guy Blog and Dividend Stocks Rock. View his bio here**
Enbridge (TSX:ENB) is an energy generation, distribution, and transportation company in the U.S. and Canada. Its pipeline network consists of the Canadian Mainline system, regional oil sands pipelines, and natural gas pipelines.
The company also owns and operates a regulated natural gas utility and Canada’s largest natural gas distribution company. Additionally, Enbridge generates renewable and alternative energy with 2,000 megawatts of capacity.
Enbridge clients enter into 20-25-year transportation contracts. The company is already well positioned to benefit from the oil sands (as its Mainline covers 70% of Canada’s pipeline network).
As production grows, need for Enbridge’s pipelines remain strong. Now that it has merged with Spectra, about a third of its business model will come from natural gas transportation. The company has a handful of projects on the table or in development.
ENB saw progressed execution of Line 3 Replacement project: Canadian segment construction expected to be completed by end of May 2019; Minnesota Public Utilities Commission (MPUC) denied all petitions to reconsider its project approvals. Project in-service date targeted for the second half of 2020.
The company has been paying dividends for the past 65 years and has 24 consecutive years (2020) of consistent growth. Enbridge expects to increase its payouts by 10% through 2020.
Management reaffirmed their growth policy by announcing their 10% dividend raise for 2019.
Since the pipeline business model is built around long-term contracts and predictable cash flows, I have no doubt this will happen.
Investors looking for exposure to oil and gas stocks may be wise to stick to pipeline companies during this oil and gas bear market, as they have less reliance on the commodity itself, and long term take-or-pay contract create more reliable cash flows.
8. Algonquin Power (AQN.TO)
**This stock is a contribution by Mark Seed at MyOwnAdvisor.ca. You can view his article on three top utility stocks for 2019 here.
Most investors are thoroughly aware of the impressive dividend histories of Fortis (FTS) and Emera (EMA). Both companies are major players in the North American broad energy industry. However, investors shouldn’t dismiss growing utility powerhouse Algonquin Power (TSX:AQN).
You’ll find this company as a top-5 holding in some of Canada’s utility ETFs like XUT – and rightly so! Algonquin Power & Utilities Corporation is a growing renewable energy and regulated utility conglomerate with assets across North America.
This company actively invests and operates green and clean energy assets including hydroelectric, wind, thermal, and solar power facilities, as well as sustainable utility distribution businesses (water, electricity and natural gas) through its two operating subsidiaries: Liberty Power and Liberty Utilities.
The latter, Liberty Utilities, has operations in Arizona, Arkansas, California, Georgia, Iowa, Illinois, Kansas, Massachusetts, Missouri, New Hampshire, Oklahoma, and Texas – making this stock a solid company to own with built-in diversification beyond our borders.
With more than $10 billion in total assets, AQN is no longer a small utility player and their growth reflects that. Dividends have been increasing year-over-year for 9 consecutive years now and their stock price has tripled during the same time period.
The company sports a tidy 4.64% yield. For long-term dependable income and growth from a much needed, regulated asset like electricity, Algonquin Power & Utilities Corporation should deliver healthy returns for decades to come.
Utility companies will continue to move up our list of the top income stocks as the pandemic and inevitable after effects continue, as their reliable income streams and dividends tend to support stock prices.
<h2id=”t”>7. Telus (T.TO)
Telus (TSX:T) is a telecommunications company headquartered in Vancouver British Columbia.
Telus offers a multitude of products including television, phone, and internet services. It has been providing services for more than 100 years and its dedication for offering the best services possible is showing through the company’s 13 million subscribers.
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 boasts 16 straight years of growth and a 5 year growth rate of over 8%. Its most recent increase of 7% falls shy of its 5 year average, but the telecom company has proven to be reliable at consistently raising dividends despite the payments making up over 119% of its current free cash flows.
With a dividend yield of 5.18% the company is finally trading at a bit of a discount. Telus trades at under 16 times earnings and has a 5 year PEG ratio of 3.18.
The company is also one of the stronger 5G telecom opportunities here in Canada, being primarily a pure-play telecommunications company. The company looks like it’s taken a steep drop in price, however this is due to a 2 for 1 share split.
6. Royal Bank of Canada (RY.TO)
Royal Bank of Canada (TSX:RY) is not only a high quality, long term income stock, but it is one of the best bank stocks to own on the stock market today.
RBC is a global enterprise with operations in 42 countries, including Canada and the United States. It is also jockeying with high profile growth stock Shopify for the largest company in the country in terms of market cap.
Along with personal and commercial banking, the company offers wealth management and investing services to customers worldwide.
Royal Banks brand reputation is impeccable, being named Canada’s most valuable brand for 5 years running.
Its recent acquisition of City National shows its dedication to growing its operations south of the border. In terms of Royal Bank’s dividend, the company currently pays a dividend yield of 4.07%. With a payout ratio of only 46.51% at the time of writing, the dividend is considered fairly safe.
With an 9 year growth streak and a 5 year growth rate of over 7%, next to TD Bank the company has one of the fastest growing dividends out of the Big Five.
Analysts expect the company to grow at an annual rate of 5.4% over the next 5 years, and have a 1 year price target of $100.33, which indicates nearly 20% upside from today’s price. Real estate sales will be critical for these banks moving forward, and it’s difficult to say which direction they will head in. Although interest rates are low to encourage higher spending, consumers are very concerned with economical outlook.
5. TFI International (TFII.TO)
TFI International (TSX:TFII) 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 currently has a yield of 2.59%, which is considered low by most income investors standards.
However, it is its dividend growth that places it this high on this income stock list. The company has raised dividends for 9 straight years, and has a 5 year dividend growth rate of 10%.
Its most recent increase of 12% beats its 5 year growth rate by 20%, and this Dividend Aristocrat, unlike most others, is seeing its growth projecting upwards.
TFI saw a significant spike in its financial performance in 2019. Margins are expanding, and earnings are growing at a triple-digit pace. The best part? Growth is expected to continue.
Analysts expect the company will grow earnings by the mid-teens over the next few years. On the back of increased earnings and cash flows, TFI is an overlooked star in the making.
As a transportation and logistics company, we expect COVID-19 to have a smaller impact on revenue and earnings. We think investors are catching on to this as well, as the company has recovered in price significantly.
Another note, the company dual listed prior to the stock market crash, and trading on the NYSE should expose it to more investors and/or funds.
4. BCE (BCE.TO)
BCE (TSX:BCE) provides both residential and commercial clients with a wide variety of telecommunication services including telephone, internet and television. The company is the second largest telecommunications company in the country in terms of market cap, second to only Rogers Communications.
The company currently has over 9.6 million customers, and its revenue streams are heavily protected in an industry that has some of the highest barriers to entry in Canada. BCE operates in three segments.
First, there is Bell Wireless which provides wireless voice and data services. Secondly, Bell Wireline provides data and satellite television. And finally, they have Bell Media, which provides pay TV along with digital media and radio broadcasting. BCE currently pays a dividend yield of just over 6%.
The company has increased dividends for 11 straight years, and has a 5 year growth rate of 5%.
Bells dividend isn’t necessarily unsafe, but investors must take caution with its 94% payout ratio. To add to this, the company is currently paying out nearly 85% of its free cash flows towards its dividend. That being said, with a decade long growth streak, we’re comfortable placing the stock in our top 10.
Of note, BCE significantly outperformed its main competitor Telus over the course of 2019, and as such has moved ahead of Telus on this list of the top income stocks.
3. Equitable Bank (EQB.TO)
Equitable Group (TSX:EQB) is one of the best alternative Mortgage lenders in Canada. It has top notch management and has been growing at a double-digit pace over the past number of years. Investors shut down by the major banks for real estate look to alternative lenders like Equitable to secure their loans.
The company is also positioning itself as Canada’s Challenger Bank. An entirely digital Schedule I Charter Bank, Equitable is proving itself to be a viable alternative to those who are tiring of the Big Five. When it comes to the dividend, Equitable has quietly emerged as one of the best dividend growth stocks in the Country.
EQ Bank is a Canadian Dividend Aristocrat with an nine year growth streak. The most impressive aspect about its dividend is the frequency at which it’s raised. The company has raised dividends for six straight quarters. This is simply astounding, and Equitable Bank should be a stock every investor is looking at for income.
Although its annual dividend yield (2.60% as of writing) is nothing to get excited about, it would be much higher if the company paid out more of its earnings. As it stands today, the payout ratio is under 15% of trailing earnings. The stock also has a five year growth rate of more than 12% annually.
2. Fortis (FTS.TO)
Fortis (TSX:FTS) is among the top 15 utility companies in North America and one of the best dividend stocks in the country. With a market cap of over $24 billion, Fortis is the largest utility company in the country.
Fortis invests in safe, clean and reliable energy solutions to continue serving its loyal customers.
At this point in time, it has over 10 utility operations under its belt in Canada, the U.S. and the Caribbean. Fortis is extremely attractive for a number of reasons.
For one, it boasts one of the longest growth streaks of any Canadian company at 46 years.
The company also operates in a sector with extremely high barriers to entry, which eliminates the risk of market-share loss to new competitors.
Fortis’s consolidated rate base is expected to grow to $32 billion by 2021 and to $35.5 billion by 2023.
This translates into a 5 year compounded annual growth rate of over 6.3%. Along with the company’s 46 year growth streak, it currently pays a yield of 3.55% with a payout ratio of only 49.95%, which is typically low for a utility company.
An investment in Fortis comes with a hefty price tag however, as the company is currently trading at over 20 times forward earnings and has a PEG ratio of over 4.90. However, regardless of the stocks valuation, it seems to trend upwards at an astonishingly consistent pace. Over the last 5 years Fortis’s stock has gained over 50% to go along with strong income.
Low interest rates should bode well for the company moving forward in 2020, and investors will find the company’s reliable revenue and earnings to be a relief, especially during this pandemic.
1. TD Bank (TD.TO)
Our best dividend stock in Canada for 2020 is TD Bank (TSX:TD) . The financial services giant focuses on several segments which include retail, commercial banking and credit cards. Additionally, TD Bank covers insurance and wealth management. As of writing, the company has a market cap of over $110 billion, making it one of the largest companies in the country.
What makes the company so enticing is the fact that it has a large presence in the United States. This reduces the impact of a weakened Canadian housing market and economy on TD’s revenue. The company focuses on both personal and commercial businesses, U.S. credit cards and auto financing south of the border as well as institutional investments with its subsidiary TD Ameritrade.
Toronto Dominion Bank is considered America’s “most convenient bank” and serves customers at over 2,400 locations. In terms of the company’s dividend, TD Bank has a yield of 5.55% at the time of writing, and has grown at a rate of 9% annually over the last 5 years.
TD shows no signs of slowing down, as the company has raised dividends for 9 straight years. The company’s dividend only accounts for 9% of its operating cash flows and has a relatively low payout ratio of 46%. Along with excellent income, TD Bank is actually trading at an extremely reasonable price.
Due to a poor fiscal 2019 and COVID-19 related uncertainty the stock is trading at approximately 11 times forward earnings, and has a 5 year PEG ratio of 1.45. Not bad for a stock that investors are required to pay a hefty premium for because of its income prospects.
COVID-19 is expected to have a negative effect on financial services, so although TD is trading at a bargain, it may take longer to recover and it has lagged the market thus far.
At the time of writing, analysts have placed 1 year upside potential of more than 25% on this Canadian financial giant, and this is a stock that dividend investors should look to own all the way until retirement.
Along with our picks, we’ve had some contributions from other excellent Canadian writers
Mike is the author of The Dividend Guy Blog & The Dividend Monk along with the owner and portfolio manager at Dividend Stocks Rock (DSR). Mike earned his bachelor degree in finance & marketing, owns an MBA in financial services and used to be a financial planner with a CFP title. Besides being a passionate investor, Mike is also happily married with three beautiful children. He started his online venture to educate people about investing and to be able to spend more time with his family.
Mark Seed is the owner and writer over at MyOwnAdvisor.ca, a leading personal finance and investing blog. Mark started investing when he was in his early 20s, and him and his wife are currently well on their way to creating a $1 million dollar portfolio, hitting the $700,000 mark in 2019.
Sabeel is the owner of Roadmap2Retire. Roadmap2Retire is a blog about a Canadian financial independence journey. While following a multi-pronged approach of using index funds and growth stocks, the core portfolio consists of dividend growth stocks and generation of passive income to attain financial independence. The blog discusses all the successes and failures experienced through this journey.