Top Canadian Dividend Stocks to Supercharge Your Income

Many investors first learning how to buy stocks in Canada want to know what the best options are today in terms of dividend stocks.

In this article, I’m going to give you some of my favorite Canadian dividend stocks to buy for 2024. These are hand-picked by myself, and this article contains hours of comprehensive research on some of the best corporations in the country.

I picked these stocks not only for their dividends, but also due to strong company fundamentals. A dividend is only as good as the company behind it, and you as an investor need to understand that the dividend itself is only one portion of total return.

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What are the best dividend stocks in Canada?

• Canadian National Railway (TSE:CNR)
• Metro (TSE:MRU)
• TC Energy (TSX:TRP)
• National Bank of Canada (TSE:NA)
• Canadian Apartments REIT (TSE:CAR.UN)
• TELUS (TSX:T)
• Royal Bank of Canada (TSX:RY)
• Canadian Natural Resources Ltd (TSE:CNQ)
• Alimentation Couche-Tard (TSE:ATD.TO)
• Fortis (TSX:FTS)

10. Canadian National Railway (TSE:CNR)

Why I Love The Stock:

One of the widest moats in the country

One of the most efficient railways in North America

Multi-decade dividend growth streak

Strong operator regardless of economy

Transports the country’s most vital goods

Infrastructure spending makes competition near impossible

Canadian National Railway (TSE:CNR) is the largest rail company in the country. As such, it has been a very popular option for income investors due to reliable cashflows and an incredible economic moat.

The company has over 33,000 kilometres of track and primarily hauls forest, coal, sulphur, grain, fertilizer, automotive parts, and much more.

One of the key reasons I love the company? All of these elements are key to a functioning economy.

Railways are often referred to as the bellwether of the Canadian economy. When railways begin to struggle, it is often followed by a slowing economic activity.

However, despite being prone to different economic conditions, I love the way Canadian National Railway has thrived. The company is growing its dividend at an impressive pace, which is a key indicator I look for in a company. It has a dividend growth streak of 28 years and a five-year dividend growth rate of 11.67%.

The stock’s consistent rise in price has resulted in a low yield, with the company yielding either in the high 1% or low 2% range.

One thing I want to make crystal clear for you, however.

A low yield does not mean a poor dividend stock.

Chasing yield can often get people in trouble, and despite Canadian National having an unattractive yield, it has more than doubled the returns of the TSX index over the last decade. In fact, it has put up annualized returns of just over 18% during that timeframe, more than the S&P 500.

Despite its size, CN Rail has been able to adapt, reroute, and focus operations on customers who provided essential services.

The company’s handling of the pandemic has been rightfully lauded by industry experts, and I expect CN Rail to put up strong returns moving forward despite the market pricing in a recession.

9. Metro (TSE:MRU)

Why I Love The Stock:

Canada’s grocers face very little competition

Although the company has low margins, high volumes offset this

Exceptional presence in Eastern Canada, where most of the population is

Multi-decade dividend growth streak

Pharmacy operations diversifies the business model

Strong returns in practically any economy

Metro (TSE:MRU) is one of the largest grocers in the country and is also one of the most reliable Canadian dividend stocks to own today.

Consumer staple stocks, such as grocery stores, tend to be viewed as “boring” options. However, they also make some of the best dividend stocks.

Metro is tied for the 8th longest streak in the country with crude oil producer Imperial Oil and fellow retailer Empire Company. However, one of the clear differentiators between Empire and Metro is Metro’s dividend growth.

With a near 30 year dividend growth streak, the company also sports a low double-digit dividend growth rate over the last 5 years. From a company operating in a mature sector like Metro, this is outstanding dividend growth.

With payout ratios in terms of earnings and free cash flows in the 25-35% range as well, I’m fairly confident we won’t be seeing any sort of slowdown in terms of dividend growth in the future.

The company is not a pure-play grocer either. It entered the pharmacy scene with a major acquisition of Jean Coutu in 2018. I’m a huge fan of growth by acquisition companies, and this acquisition has certainly been one that has paid off.

It has one of the most dominant presences in Quebec out of all major grocery stores. The province currently holds over 70% of its owned and franchised food and drug stores.

You’re not going to knock it out of the park with a company like Metro in terms of capital appreciation. But you’re going to get a reasonable mid-1% dividend yield and likely mid-to-high, single-digit growth.

In my opinion, not every stock inside of your portfolio needs to be flashy. And now that interest rates have started to decline, we could see more people head back to Metro as shopping at budget based stores like Dollarama may be something investors are willing to forego, for now.

8. TC Energy (TSX:TRP)

Why I Love The Stock:

Take or pay contracts leads to very steady cash flows

Capital intensive infrastructure makes competition scarce

The company is not as exposed to the price of oil as a producer

Is seeing some strong momentum on the back of falling interest rates

The splitting of its business should allow added value to materialize

High-yielding, safe dividend, which is attractive to many income investors

I can’t talk about the top dividend stocks in Canada without mentioning one of Canada’s pipelines. TC Energy (TSX:TRP) is the second-largest midstream company in the country, and it has a 23-year dividend growth streak. This is tied for the 13th-longest dividend growth streak in the country.

The company provides 25% of North America’s natural gas transmission and has over 90,000 km of natural gas pipelines.

Over the course of its dividend streak, it has averaged 7% dividend growth. The company had been guiding to 5-7% dividend growth but recently downgraded that growth to the low single digits because of the tough rate environment. However, I do believe now that we’re in a situation where rates are likely to continue to decline, I expect the company’s dividend growth guidance to ramp up.

In addition to this, I think it’s important that investors understand that considering this company yields typically in the 6% range, we can’t expect much dividend growth.

Now that the price of oil is stabilizing, it’s likely that TC Energy, despite not being impacted as much by the price of oil as a producer, will still experience some of the growing oil price tailwinds.

The company has a low-risk business model in which 95% of EBITDA is generated from regulated or long-term contracted assets. This is exactly why, in the midst of the pandemic, it stated that operations were relatively unaffected.

Many pipelines have take-or-pay contracts with producers. This means that regardless of the product shipped, the pipeline gets paid.

This creates extremely reliable cash flows and is why companies like TC Energy and Enbridge (TSE:ENB) have some of the country’s safest, most reliable dividends.

The company currently yields in the low 6% range, is trading at less than 15 times forward earnings, and is set to benefit from a recovering economy.

7. National Bank of Canada (TSE:NA)

Why I Love The Stock:

Canada’s fastest growing major bank

Exposure to Canada leads to heavier regulations and more reliable earnings

Its acquisition of Canadian Western gives it more exposure to Western Canada

One of the fastest growing dividends out of all Big 6 Banks

The most efficient bank in the country

Expected earnings growth is the fastest out of all major banks

In reality, I could litter our top dividend list with Canada’s Big 6 banks. They are among the most reliable income stocks in the world.

However, National Bank (TSE:NA) is clearly separating itself from the pack in terms of overall performance. Could I have placed a higher-yielding company like the Bank of Nova Scotia (TSE:BNS) or the Canadian Imperial Bank of Commerce (TSE:CM)? Sure, I could have. But in my opinion, National is the superior bank.

The National Bank of Canada is the sixth largest among Canadian banks and has a comprehensive range of financial services.

With a strong focus on Quebec and Toronto, the bank seamlessly integrates personal and commercial banking, wealth management, and a dynamic financial markets group within its operational segments. It is well known for being the first major bank here in Canada to go commission-free on its brokerage platform.

I love the acquisition of Canadian Western by the company, although I do believe it overpaid a bit. Although not accretive to earnings until 2027, it should allow National Bank to unlock more value in western Canada. Because CWB was a smaller more regional bank, the acquisition by National should immediately open it up to more products, more loan offerings, and looser regulations.

The bank has a 14-year dividend growth streak and a healthy payout ratio of only 45% of its earnings. This has allowed the bank to grow the dividend at a high single-digit pace over the last 5 years.

Of note, you will likely see the major financial institutions take a step back regarding dividend growth because of the economic hardships in 2024. As a result, I expect mid-single-digit dividend growth from National Bank moving forward.

These prudent moves should make investors feel more confident about Canada’s financial institutions navigating our current environment, not worried. Many buy them because they are dividend-paying stocks. Still, we do have to step back and understand there is an underlying business that supports the dividend.

With a yield of 4%~ at the time of writing, National Bank also provides a steady income for those looking to add it to their dividend portfolios.

6. Canadian Apartments REIT (TSE:CAR.UN)

Why I Love The Stock:

The largest residential REIT in the country

Apartment rentals are extremely reliable

Occupancy rates are near 99%

FFO payout ratios continue to trend downwards

Some of the best debt ratios out of any REIT in Canada

Exposure to the Netherlands

Canadian Apartments REIT (TSE:CAR.UN) is one of the largest residential real estate trusts in the country. The trust has a dominant presence in the sector and is one of the most popular REITs in Canada.

You might be saying right now, “Well, I’m not looking for the top REITs Dan; I’m looking for the top dividend stocks!” But the reality is, if you’re looking to build a strong dividend portfolio, there is a good chance it will contain a portion of REITs for a few reasons.

For one, a real estate investment trust is forced to pay back a particular percentage (90%+) of its earnings to unitholders. As a common stockholder, the dividend does not necessarily need to be placed highest on the totem pole.

Secondly, I’m not sure if you’ve noticed, but our residential real estate sector in Canada has been going bonkers for years now. This is ultimately a good thing for a residential REIT, as it has large exposure to the residential real estate sector.

Typically, REITs tend to perform well in a rising rate environment. As rates go up, so do property values. However, 2022/23 presented a very unique situation. Rates went up so fast that a tailwind quickly turned into a major headwind for many REITs.

As a result, CAPREIT is trading at very attractive valuations for those who want exposure to residential real estate.

The company’s portfolio includes mid-tier and luxury properties, and it generates the majority of its revenue from the Toronto and Greater Montreal regions.

CAPREIT is in one of the best financial positions of all Canadian REITs, with a debt-to-gross book value of approximately 41.6%. Its dividend accounts for around 59% of funds from operations. I look for my REITs to typically maintain ratios lower than 80%. So, this is well within the range.

In 2020, the company hit a huge milestone and was added to the TSX 60 Index, which represents 60 of the biggest companies on the Toronto Stock Exchange.

The REIT doesn’t have the flashy yield that many others do in the 2.5% range. However, it’s important to understand that while payout ratios were high and dividends were getting cut in the sector during the pandemic, CAPREIT was at no risk of cutting the distribution.

As mentioned at the start of the article, I view the reliability of a dividend as much more important than the overall yield.

5. TELUS (TSX:T)

Why I Love The Stock:

High interest rates have led to discounted valuations

The company is one of the best positioned telecoms for growth

Free cash flows are expected to grow significantly in the coming years

The company doesn’t own any media assets, which are losing profitability fast

One of the better positioned telecoms from a payout ratio standpoint

Expected to be the fastest growing telecom in Canada

I can’t develop a top dividend list in Canada without including one of the Big 3 Telecoms. Despite pressure from the Feds to increase competition, TELUS, Rogers, and BCE still own more than 94% of the market share.

All three are solid dividend payers as well, but for me, one stands out.

Leaving the telecom business aside, what makes TELUS (TSX:T) unique is that it does not have a capital-intensive, low profitability media segments like its peers.

Instead, TELUS has different verticals, such as TELUS Health, TELUS Agriculture, and TELUS International, which all provide different and more attractive growth potential.

High rates have stymied telecoms due to the high-capacity nature of the industry. However, we’re now seeing interest rates fall, and Telus has no doubt navigated the environment better than the other two telecoms.

Let me turn your attention to the dividend. TELUS has demonstrated an unwavering commitment to the shareholders, and their 20-year dividend growth streak is the longest in the industry.

The company has also been extremely forthcoming with shareholders. Over the years, it has publicly posted 3 year targeted dividend growth rates and has always executed. The current targeted annual growth rate is in the 7-10% range through 2025.

TELUS currently yields in the high 6% range, which is well above the company’s historical average (~4%). The reason for this is simple: valuations have come down as the telecom industry navigates near-to-medium-term challenges.

The other notable issue to be mindful of is the company’s high payout ratios. The company is currently paying out more than 100% of earnings and cash flow.

However, the main reason for the high ratios today is that TELUS underwent a major restructuring initiative that negatively impacted earnings and accelerated capital investments in Fiscal 2023.

On a forward basis, the ratios look much better. The payout ratio against earnings is expected to drop just below 100%, and against cash flows (which is the most important ratio for telecoms), it is expected to drop below 100% in Fiscal 2025.

It is worth noting that TELUS has a targeted payout ratio against cash flows of 60-75% and expects significant cash flow growth in 2025 and beyond due to a reduction in capital expenditures.

I’ll give you a bit of a warning: don’t expect earth-shattering returns from the company’s share price. But, on this one, for a decade, reinvest the dividends, and you’ll likely be happy.

4. Royal Bank of Canada (TSX:RY)

Why I Love The Stock:

Exposure to 40 different countries

One of the best underwriting teams of all major institutions

One of the strongest brands in the country

Despite tough challenges, continues to grow earnings in 2024

Some of the best payout ratios out of all Big 6 Banks

Has navigated the economic downturn wonderfully

The Royal Bank of Canada (TSX:RY) is the largest bank in Canada and is among the largest companies in the country. It has been named Canada’s most valuable brand for six years running and is consistently among the best-performing Big Six banks.

In fact, it has been one of the top-performing Big Five banks over the past 10-year period. As it has matured, the other banks have started to outperform.

However, make no mistake about it: this company has the widest moat of any of the Big 6 due to its strong international presence.

The company operates in the capital markets via RBC Direct Investing but also offers commercial banking, retail banking, and wealth management services.

At 45%, RBC has one of the lowest payout ratios among its peers. My typical target payout ratio for a bank is anywhere from 40%-55%. Once it starts to get above this, I start to question whether or not dividend growth is the best path forward. For Royal, it’s never made me wonder.

The company is the Canadian bank with the most geographical exposure, with exposure in over 40 countries. However, make no mistake about it, it still has the largest exposure to the Canadian economy out of the Big 6 just because of its size.

I believe interest rates coming down should help out these institutions in terms of loan loss provisions and potentially even spur some borrowing in the Canadian economy, which should benefit the bank.

Royal Bank has proven to be an exceptional performer regardless of economic circumstances. The company has a 13-year dividend growth streak, during which time it has grown the dividend by mid-single digits annually. I will be interested to see if it scales back dividend growth because of the economic circumstances despite having the room to grow the dividend at a high single-digit pace, or whether it is confident enough in its operations to get back to pre-pandemic growth rates.

Now yielding in the 3.5% range, the Royal Bank is deserving of its place among Canada’s top dividend stocks.

3. Canadian Natural Resources Ltd (TSE:CNQ)

Why I Love The Stock:

The most efficient oil producer in the country

Strong mix of both oil and natural gas production

Its operations during the pandemic remove all concerns about potential events moving forward

Has a multi decade dividend growth streak

Has grown the dividend at a CAGR of 20%+ over that timeframe

Returns 100% of free cash flow back to investors via dividends and buybacks

For a long time, I avoided including any Canadian oil producers on this list. However, the environment has certainly changed, and oil companies have performed exceptionally well over the last few years.

So, why Canadian Natural Resources (TSE:CNQ) and not a company like Suncor or Imperial Oil?

Well, Canadian Natural has repeatedly proven that it is the best major oil and natural gas producer in the country.

The company has raised the dividend for 24 years and has raised the dividend at a CAGR of 20% over that entire period. I will tell you right now, there is not a lot of companies in Canada that can do that for 5 years, let alone 24.

Despite major producers like Suncor and many junior producers slashing the dividend at a record pace during the pandemic, Canadian Natural managed to actually raise the dividend in the midst of a global oil crisis.

The company is one of the lowest-cost producers in Canada, with breakeven prices in the $35~ WTI range. This makes the company extremely reliable in almost any price environment, as cash flows will remain positive.

At $60 WTI, which would be considered the low point prediction by most analysts over the next few years, Canadian Natural will generate a significant amount of free cash flow and is in an outstanding position to return it to shareholders.

As balance sheets are restored, new projects and expansion will likely be put on the back burner. Instead, Canadian Natural will likely look to return capital to shareholders through increased and special dividends along with share buybacks.

They are now in a position to return all excess free cash flow to shareholders in the form of dividends and buybacks. The company does this when its net debt is under $10B.

Despite its extremely bullish situation, I didn’t put Canadian Natural higher on this list. Why? The cyclical nature of the business makes it very difficult to profit from oil and gas companies over the long term. Timing a proper exit when the market begins to turn sideways or downwards is critical to outperforming.

Canadian Natural’s share price still does have some upside here, but capital gains shouldn’t be your focus with oil and gas producers. Instead, soak up the dividends during this oil and gas boom and try to find an opportunity to exit when things calm down.

2. Alimentation Couche-Tard (TSE:ATD.TO)

Why I Love The Stock:

The company is outstanding at growing through acquisition

Despite a rough patch recently, is an excellent earnings grower

One of the best management teams in North America

Valuations are now starting to look more attractive

Consistently posts double digit returns on invested capital

A ridiculously simple business model anyone can understand

Alimentation Couche-Tard (TSE:ATD) is one of the best Canadian dividend stocks to buy today in my opinion, yet it doesn’t get much attention in the dividend world.

Why is that? Well, I’ll get to that in a bit. With a market cap in excess of $70B, Couche-Tard is one of the largest convenience store operators in the world and has over 16,000 stores globally.

A recent acquisition has the company entering into the carwash market as well, and there is a small outside chance this company could make a gigantic acquisition in terms of buying 7/11 gas stations. However, I do believe that will be shut down by Japanese regulators, even if it did get approved by both corporations.

If you’re from Eastern Canada, “Couche-Tard” will be a common name. However, the company tends to run under arguably its most popular brand, Circle K.

Circle K is truly a global brand, selling gasoline, beverages, food, car wash services, tobacco, and so much more across North America and Europe, but also in countries like China, Egypt, and Malesia.

Now that you know what the company does, let’s move on to the dividend. Couche-Tard has been growing its dividend at an exceptional rate. In fact, the main reason Couche-Tard is on this list is because of its growth.

With a 15-year dividend growth streak, a 5-year dividend growth rate of over 20%, and a payout ratio under 18%, this is a company that is in one of the best positions in the country to fuel dividend growth for investors.

With a yield of less than 1%, it’s often overlooked by income seekers. However, you do have to take into consideration overall returns here. And if I do that, Couche-Tard is simply a no-brainer.

With this type of dividend growth, its yield can only remain low if one thing is occurring: rapid share appreciation. And this is 100% the case. In fact, a $10,000 investment in Couche-Tard just a decade ago is now worth over $55,000. At that point, I don’t care about the yield. I’ll sell some shares and create my own dividend!

If there’s one stock on this list that should make investors reconsider how important yield is to them, it’s definitely Couche-Tard. The company is a more established blue-chip player now so that growth won’t be as extensive, but it still has much room.

1. Fortis (TSX:FTS)

Why I Love The Stock:

Canada’s most efficient regulated utility

99% of earnings come from regulated utilities, a near bullet-proof business

Strong exposure in Canada, but also in the United States and Caribbean.

Falling interest rates should be a tailwind moving forward

A Dividend King, with over 50 consecutive years of dividend growth

Never misses dividend growth targets

Fortis (TSX:FTS) has been a mainstay on my list of top dividend stocks for years. As the largest utility company in the country, Fortis is arguably one of the most defensive stocks to own.

Fortis has the second-longest dividend growth streak in Canada. At 50 years, it is only the second Canadian stock to reach Dividend King status, a prestigious status reserved for those who have raised dividends for at least 50 consecutive years.

Given our current economic uncertainty, dividend safety and reliability are the main reasons why Fortis is my top dividend stock in Canada. Throughout the past three, five, and ten years, Fortis has consistently raised the dividend by approximately 6%.

Further demonstrating its reliability, Fortis is one of the few companies that provides multi-year dividend growth targets. Through 2028, Fortis expects to raise the dividend by ~4-6% annually—just slightly below historical averages. This is not surprising to me, considering the impacts that rising rates had on utilities. Sure, they’re coming down, but they aren’t exactly low yet.

Unlike Royal Bank, which would have benefitted from rising interest rates, a company like Fortis would be negatively impacted by interest rates. This is because utilities are a capital-intensive industry that requires large capital investments and debt to build infrastructure like power generation facilities and transmission lines.

However, I’ve noticed Fortis’s movement in price has been relatively unimpacted by rising rates over the long term and likely won’t be moving forward. You just need to be able to weather the short-term volatility.

If you reinvest your dividends, $10,000 in Fortis in the mid-1990s is now over $271,000. The company has simply been an exceptional performer.

And, with a beta of 0.2, indicating this stock is 1/5th as volatile as the overall market, it seems to operate almost more like a bond.

Combine strong dividend growth with an attractive yield in the mid-4 % range, and you are looking at my top-income stock to own in Canada today. Not only can investors lock in a safe and attractive dividend, but they can also do so at respectable valuations.

My list of top Canadian 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 higher on this list due to the company’s dividend growth.

I try to have a blend of stocks on this list, ones that will suit a wide variety of investors. However, they must pass these 3 sets of criteria.

Warning – The best dividend stocks don’t always have the highest yield

I see investors make this mistake, particularly new ones who haven’t been burned yet, time and time again.

It is having tunnel vision for dividend yield. They ignore the dividend payout ratio or the company’s financial health and instead chase high yields to generate larger passive income.

Unfortunately for many in early 2020, this strategy resulted in devastating consequences. I witnessed the quickest pace of dividend cuts in history, and many income stocks that were bloated in value due to their high yields saw their share prices collapse.

Chasing yield is one of the biggest and most common mistakes beginners make, and it is imperative that you prioritize the quality of the company over its pay.

Is there an ETF to make dividend investing easier?

Many people who don’t have the time to consistently monitor a dividend portfolio want to make their lives easier by investing in an ETF. Fortunately, we have a plethora of them in Canada.

Whether it is Vanguard, Horizons, BMO, or iShares, Canadians can choose a wide variety of dividend ETFs to generate passive income in a single click. Some quick examples?

• Horizons Active CDN Dividend ETF (TSE:HAL)
• BMO Canadian Dividend ETF (TSE:ZDV)
• S&P/TSX Canadian Dividend Aristocrats Index Fund (TSE:CDZ)
• iShares Core S&P/TSX Composite High Dividend Index ETF (TSX:XEI)
• iShares Canadian Select Dividend Index ETF (TSX:XDV)

It’s important to note that these dividend ETFs come with management fees and need to be considered before purchasing.

What Canadian stocks pay the best dividends?

In my opinion, you will typically see the best dividends located in reliable, mature sectors like telecoms, pipelines, and financial companies.

However, we have plenty of industrial options that pay strong dividends as well, but their yields are often not as high as those of a pipeline or telecom company.

Which Canadian stocks pay monthly dividends?

Right now, we track over 67 Canadian stocks and REITs that pay monthly dividends. If you’re interested to see what they are and what we view as the best, you can read our page on monthly dividend stocks here.

What are the 5 highest dividend-paying stocks?

At the time of writing, the 5 highest dividend-paying stocks in Canada are:

• PetroTal Corp (TSE:TAL) at 15%
• Tidewater Midstream (TSE:TWM) at 13.5%
• Parex Resources (TSE:PXT) at 12.6%
• Fiera Capital (TSE:FSZ) at 11.5%
• Cardinal Energy (TSE:CJ) at 11.3%

However, I would strongly caution investors from focusing on dividend yield and instead look to buy strong companies. A very high yield can often be a warning sign of a dividend cut. And a dividend cut usually leads to a cratering share price.

Keep in mind as well, I have excluded split corporations from the list of high-yielders above.