Canada's best dividend growth stocks

[Ultimate List] Canada’s Top Stocks By Dividend Growth

ByDan Kent Published On:

High income payers, reliable and consistent payouts, or dividend growth. Dividend investors have a wide variety of stocks to choose from.

Well, if you’ve landed on this page you’re more than likely looking for the best Canadian dividend growth stocks. And, I’m going to bring them to you with the best list in Canada, bar none.

Canadian dividend growth stocks are a critical part of my investment portfolio

As such, I’ve developed somewhat of a systematic approach to finding the best Canadian dividend growth stocks. What exactly do I want to look for?

Not only do I want to look for Canadian dividend stocks with long, reliable dividend growth streaks, I also want to look at dividend payout ratios in terms of free and operating cash flows. Which of note, are available in our dividend safety screener over at Stocktrades Premium.

This list of Canadian dividend growth stocks is no doubt solid, but it’s not nearly as useful as a tool as our dividend safety screener.

Now keep in mind, it’s important you don’t get tunnel vision when it comes to looking for dividend stocks.

These are still stocks you’re buying after all. The list I’ve put together below takes into account the dividend growth rates, growth streaks and yields of the companies.

What it doesn’t take into account is the overall strength of a company. Although these companies have proven to be extremely reliable over the last half decade at raising dividends, past performance is not indicative of future results.

And as we’ve seen during the COVID-19 pandemic, dividend cuts came at a rapid and unprecedented pace.

What do these dividend growth stocks need to make the cut?

Well for one, the list below will contain only companies with a market cap of over $250 million.

It’s a possibility I may make some exceptions to particular companies in the future, but we really need to make sure we’re lowering overall volatility. And for that, I stick with Canadian small-caps at minimum.

Secondly, these dividend growth stocks need to be at least Canadian Dividend Aristocrats. That’s 5+ years of straight dividend growth.

Although this is a solid indication of a strong dividend growth stock, it’s key we understand that a company that pays, for example, a $5 annual dividend would earn a year of consecutive dividend growth by raising its dividend to $5.01.

Which leads me to my next point.

These stocks need to have at minimum 10% annual dividend growth over the last 5 years. If the company has a dividend growth rate of 9.99% annually over the last half decade, they didn’t make this list.

There’s plenty of options out there in terms of dividend growth companies in Canada that are increasing dividends at a rapid pace. If it doesn’t have double digit growth, its not fit for me as a dividend growth stock.

Now, don’t get me wrong.

I own lots of dividend stocks that don’t achieve double digit dividend growth. Every Canadian company who aspires to be a strong dividend grower is eventually going to hit a plateau where earnings simply don’t justify and can’t maintain that level of dividend growth.

However at that time, I’d be looking for the company to be giving me a high yield.

A prime example of a few stocks from my portfolio that fit this mold? Any of my Canadian Banks (I own all of them except Canadian Imperial Bank of Commerce), and Fortis.

With that being said, lets get right to the list.

36 of the best dividend growth stocks in Canada

This table represents a 15 minute delay on both price and yield. Things like market cap and payout ratios I will update on a consistent basis, but are by no means live!

Market cap has been reduced to thousands to save space.

This list is organized by 5 year annual dividend growth rate. However, this is by no means an ordered list of what I view is best.

I’m simply presenting you with a solid pre-screen on some amazing Canadian dividend growth stocks!

If you’ve found one that I’ve missed, let me know and I’ll get it added to the list.

**Full disclaimer, I own multiple stocks on this list**