Best Canadian Dividend Stocks –May 2025

As we approach a new year, it’s time to refresh our list of the best Canadian dividend stocks. Our selection criteria include:

1. Dividend Yield
2. Consistency in Dividend Growth
3. Earnings Per Share
4. Overall Company Revenues

For those eager to see our recommendations, you can skip to our top 10 dividend picks for Best Canadian Dividend Stocks –May 2025.

The tech sector’s momentum has largely continued through the first quarter of 2024, despite Nvidia’s recent dip. However, Canadian dividend stocks are currently offering compelling value, with valuations that appear more favorable than their tech counterparts.

August may bring a shift in the financial landscape, as the Bank of Canada is increasingly likely to start cutting interest rates. This potential change makes dividend stocks more appealing to income-focused investors. Many individuals currently relying on GICs and high-interest savings accounts may soon find themselves reconsidering the attractive dividend yields offered by Canadian blue-chip stocks.

Stability and Growth: The Backbone of Canadian Dividend Stocks

Many of our top Canadian dividend picks come from stable industries like banking, pipelines, and utilities. These companies are attractive due to their high barriers to entry – what investing legend Warren Buffett calls a “Moat”. Just imagine trying to build a new pipeline in Canada today!

However, it’s important to note that high interest rates directly impact the bottom line of companies in these debt-heavy sectors. Take utilities, for instance. Their business model requires substantial upfront borrowing. As interest rates decrease, we can expect to see improved profit margins for these companies.

While the United States may maintain higher interest rates for an extended period, Canadians are likely to experience some relief in 2024. It’s worth remembering that changes in monetary policy typically take over a year to fully manifest. This means we can anticipate continued downward pressure on interest rates for several months after the initial decreases begin.

This evolving financial landscape could create favorable conditions for dividend-paying stocks, particularly in sectors that have been navigating high-interest environments.

Top Canadian Dividend Stock for 2024: Stella-Jones (SJ)

Our leading pick for 2024, Stella-Jones (SJ), has shown strong performance with approximately 5.5% growth in Q1 2024. This positive trend is encouraging.

Some might question choosing a modest lumber producer with a 1.4% dividend yield as our top pick. However, a closer look reveals the strong value this under-the-radar stock offers.

While National Bank was a tempting choice, selecting the same stock for three consecutive years seemed predictable. Telus was also considered, given its attractive pricing after a challenging 2023. Ultimately, Mike at DSR convinced me to go with Stella-Jones, citing its solid acquisition record and low payout ratio as factors that offset the currently modest dividend yield.

Stella-Jones’ Appeal:

1. Diverse revenue streams: 45% utility poles, 25% railway ties, 30% residential lumber
2. Less dependent on volatile retail lumber markets
3. Attractive P/E ratio of about 14, despite recent stock price increases

The company’s focus on utility poles is particularly appealing for steady dividend income. With much of North America needing infrastructure replacement and the push for vehicle electrification, there’s potential for consistent growth. Major utilities like Hydro One and BC Hydro have plans requiring over 100,000 poles each in the coming years.

Our recent top picks have performed well:

• 2021: Enbridge
• 2022-2023: National Bank (16% total return in 2023)

All three years, our selections outperformed the TSX 60 index with lower volatility.

As a seasoned dividend investor with over 15 years of experience, I’ve learned that while current dividend yield is attractive, long-term dividend growth and earnings per share (EPS) are the real drivers of overall portfolio returns.

My personal selections for top long-term dividend stocks are provided below.

Our Top 10 Canadian Dividend Growth Stocks Best Canadian Dividend Stocks –May 2025

Here’s a look at our top 10 long-term Canadian dividend stocks in order of their dividend increase streak.

Name	Ticker	Sector	Dividend Yield	Dividend Amount	Payout Ratio	P/E
Fortis	FTS.TO	Utilities	3.85%	%	74.83%	19.27
Canadian National Railway Co	CNR.TO	Industrials	2.15%	3.28%	36.82%	18.59
Canadian National Resources	CNQ.TO	Energy	4.33%	12.88%	48.93%	14.31
Telus Corp	T.TO	Communications	6.86%	7.25%	251.01%	44.29
Stella Jones	SJ.TO	Materials	1.21%	9.34%	16.26%	15.54
Emera	EMA.TO	Utilities	5.87%	3.00%	77.61%	21.92
National Bank	NA.TO	Finance	3.82%	7.32%	42.05%	11.96
Alimentation Couche-Tard	ATD.TO	Business	0.85%	3.72%	16.60%	21.25
TD Bank	TD.TO	Finance	5.96%	6.55%	68.32%	13.53
Brookfield Corp	BN.TO	Finance	0.67%	11.97%	45.23%	75.50
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Up to Date Dividend Stock Data & Picks

Staying Current with Top Dividend Stock Picks

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Mike, the driving force behind DSR, is Canada’s leading dividend stock blogger and has been a certified financial planner since 2003. His expertise and experience in the field make DSR a valuable resource for dividend investors.

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Canadian Earnings Per Share vs Dividend Growth in 2024

When investing in Canadian dividend stocks for the long haul – potentially decades – it’s crucial to examine medium- and long-term trends in company earnings and dividend growth. These metrics reveal two key insights:

1. Is the company consistently increasing its profitability year over year?
2. Does the management team demonstrate a commitment to rewarding shareholders through regular dividend increases?

Let’s examine how our top Canadian dividend stock picks measure up against these two critical metrics.

This data provides a snapshot of each company’s financial health and shareholder-friendly policies. Stocks showing consistent growth in both earnings and dividends often indicate:

• Solid business models
• Effective management
• Potential for long-term value creation

By focusing on these trends, we can identify companies that not only offer attractive dividends today but are also well-positioned to maintain and potentially increase their payouts in the future.

Remember, past performance doesn’t guarantee future results, but these metrics can serve as valuable indicators of a company’s financial strength and management’s priorities.

Beyond the Numbers: Contextualizing Dividend and Earnings Growth

While 5-year dividend and earnings growth are crucial metrics, they must be interpreted within a broader context. Let’s break down some key observations from our data:

1. Canadian Natural Resources (CNQ): The recent surge in oil prices has significantly boosted CNQ’s performance. However, this level of growth may not be sustainable long-term given the volatile nature of commodity markets.
2. Alimentation Couche-Tard (ATD): As a retail stock designed for steady long-term growth, ATD’s impressive earnings performance stands out. It’s no surprise this is Mike’s top pick.
3. Strong Performers: Emera (EMA), Stella-Jones (SJ), National Bank (NA), Brookfield (BN), and Fortis (FTS) show earnings growth that supports their aggressive dividend growth policies, indicating solid financial health.
4. Watch List: Canadian National Railway (CNR), TD Bank (TD), and Telus require closer monitoring:
   • CNR and Telus: Higher interest rates and substantial capital expenditures have impacted recent earnings. While these costs should decrease and assets should drive future growth, they warrant careful observation.
   • TD Bank: Despite significant short-term earnings challenges, their strong position in Canada’s banking oligopoly and conservative payout ratio provide some reassurance. However, as interest rates decline, TD will need to demonstrate improved earnings growth to maintain investor confidence.

This analysis underscores the importance of looking beyond raw numbers to understand the full picture of a company’s financial health and growth prospects. Factors such as industry trends, market conditions, and company-specific strategies all play crucial roles in determining long-term dividend sustainability and growth potential.

2025 Canadian Dividend Update

As we approach summer, it’s time to reassess the landscape of Canadian dividend stocks. Despite daily market fluctuations, the Canadian market has largely maintained its steady growth trajectory. The broader economic picture continues to be shaped by interest rate speculations and inflation projections.

Current Economic Outlook:

• A June rate cut remains probable, but risks of “higher for longer” interest rates are increasing.
• Canada-wide inflation hovering near 3% and hawkish U.S. Federal Reserve stance may limit immediate rate cuts.

Implications for Dividend Stocks:

1. Potential challenges for debt-heavy sectors (utilities, telecommunications, banks, pipelines) if interest rates remain high.
2. Reduced demand for dividend income streams as high-interest savings accounts and GICs remain attractive.

Despite these factors, the Canadian market appears fairly valued, especially compared to U.S. stock prices. In this inflationary environment, companies with solid balance sheets and strong market positions (“moat stocks”) are poised for long-term success. Businesses capable of passing along inflation-driven cost increases have historically outperformed during high inflation periods.

Our Strategy: We remain committed to our long-term approach of balancing Earnings Per Share (EPS) with a company’s dividend growth potential. This strategy aims to build a robust dividend portfolio that not only provides attractive yields today but also promises larger, growing dividends in the future.

For a comprehensive understanding of our dividend stock selection process, we recommend reading our [in-depth Dividend Stocks Rock Review]. This review explains why we trust this service and provides details on our exclusive promotional offer.

Remember, in dividend investing, the goal is not just high yields today, but sustainably growing dividends for tomorrow.

Rogers, Bell, Telus Stocks in [currentmonth]

Canadian Telecom Sector: A Mixed Bag of Opportunity and Challenge

Telus (T) maintains its position in our Top 10 Canadian Dividend Growth Stocks, underscoring our confidence in the Canadian telecommunications sector. The recent Rogers (RCI) acquisition of Shaw further consolidates this oligopolistic market, potentially strengthening the industry’s position.

2023 Recap and 2024 Outlook:

• 2023 proved challenging for telecom stocks due to rising interest costs and heavy capital expenditures (primarily 5G fiber installation).
• Early 2024 saw continued pressure on the sector’s “Big Three”.
• We anticipate a more favorable second half of 2024 for these companies.

Company-Specific Analysis:

1. Rogers:
   • Bold, debt-financed acquisition of Shaw
   • Debt now exceeds 5x annual earnings
   • Must demonstrate effective integration and value creation from new assets
2. Bell:
   • Significant share price decline
   • Unusually high dividend yield suggests market concerns about potential dividend cuts
3. Telus:
   • Remains our preferred low-risk option among the three major players

Despite recent challenges, the oligopolistic nature of the Canadian telecom market provides a strong foundation for these companies. While not known for aggressive expansion, steady population growth in Canada should support stable, long-term growth for the sector.

Key Factors to Watch:

• Interest rate trends and their impact on debt servicing costs
• Success of 5G network rollouts and adoption
• Regulatory environment and potential changes in competition policy

In conclusion, while the telecom sector faces near-term headwinds, its fundamental strengths and essential role in Canada’s digital infrastructure make it a sector worth monitoring for dividend-focused investors.

Name	Ticker	Price	Dividend Yield	Payout Ratio	P/E	Market Cap
Telus	T.TO	22.01	6.79%	251.01%	38.15	32.59B
BCE Inc.	BCE.TO	45.29	8.78%	176.69%	19.90	41.36B
Rogers Communications Inc	RCI.B.TO	52.30	3.70%	123.20%	31.79	28.80B

My Top Canadian Dividend Stock Recommendations Sorted in order of dividend streak:

Fortis (FTS.TO) – 50 Years of Dividend Growth

• Dividend Yield: 4.08%
• 5 Year Revenue Growth: 6.54%
• 5 Year Dividend Growth: 5.78%
• Payout Ratio: 74.83%
• P/E Ratio: 18.15

Investment Thesis:

Fortis has demonstrated strong growth through strategic aggressive investments in recent years. The company’s core business shows robust expansion potential, with revenues expected to continue their upward trajectory.

Fortis’ Canadian operations have been instrumental in generating sustainable cash flows, supporting nearly five decades of consistent dividend payments. The company has outlined a substantial five-year capital investment plan of approximately $20 billion for 2022-2026. Notably, only 33% of this CAPEX plan will be financed through debt, while a significant 61% will come from operational cash flow.

We anticipate that most of Fortis’ future acquisitions will focus on the U.S. market, a strategy we currently favor. Additionally, we appreciate the company’s commitment to increasing its renewable energy exposure from 2% of assets in 2019 to 7% by 2035. The recent market downturn presents an attractive entry point at current price levels.

Dividend Growth Perspective:

Fortis has consistently increased its dividend by 6% annually over the past five years and has committed to maintaining this growth rate until 2025. We value companies that demonstrate a balance between growth through acquisitions and shareholder rewards.

Fortis stands out as one of the few Canadian companies boasting 49 consecutive years of dividend increases. This track record solidifies its position as a quintessential “sleep well at night” (SWAN) stock for dividend-focused investors.

The company’s clear dividend growth strategy, coupled with its strong market position and expansion plans, makes Fortis an compelling option for investors seeking reliable, growing dividend income in the Canadian market.

Canadian National Railway (CNR.TO) – 27 Years of Dividend Increases

• 2.15% Dividend Yield
• 3.28% 5 Year Revenue Growth
• 11.67% 5 Year Dividend Growth
• 36.82% Payout Ratio
• 18.59 P/E

Investment Thesis:

Canadian National Railway (CNR) has long been recognized as the industry leader in operating ratios. While the company pioneered efficiency improvements, competitors have now caught up, with most railroads adopting similar management practices. However, CNR’s unparalleled quality of railroad assets continues to set it apart.

CNR boasts a formidable economic moat, as replicating railway infrastructure is virtually impossible. This advantage ensures steadily increasing cash flows year after year. Moreover, rail remains the most efficient method for transporting commodities over long distances.

One attractive aspect of CNR as an investment is the opportunity to enter during industry down cycles. These periodic dips often present compelling buying opportunities for long-term investors.

Recent developments, such as the cancellation of the Keystone XL pipeline, have boosted demand for oil transport via rail, benefiting CNR. Additionally, current management challenges are likely to drive more aggressive growth strategies in the near future.

Dividend Growth Perspective:

While CNR’s dividend growth prospects remain strong, investors should be aware of potential challenges. The capital-intensive nature of railroad maintenance could impact future financial performance. Striking the right balance between maintaining an efficient operating ratio and well-maintained infrastructure is an ongoing challenge.

CNR’s growth is also tied to Canadian resource markets, making it susceptible to fluctuations in demand for oil, forest products, and grains. Recent years have demonstrated how quickly market conditions can shift. For instance, the pandemic caused a roughly 10% slowdown in weekly rail traffic during the summer of 2020. Similarly, low oil prices can divert some business to trucking.

Despite these challenges, CNR continues to boast one of the industry’s best operating ratios. The company’s extensive and strategically located rail network remains its greatest asset, albeit one that cannot be relocated or easily modified to adapt to changing market conditions.

Canadian National Resources (CNQ.TO) – 22 Years of Dividend Increases

• 4.33% Dividend Yield
• 12.88% 5 Year Revenue Growth
• 22.52% 5 Year Dividend Growth
• 48.93% Payout Ratio
• 14.31 P/E

Investment Thesis:

Canadian Natural Resources (CNQ) presents a compelling investment opportunity, particularly when West Texas Intermediate (WTI) oil prices exceed $75 per barrel. With WTI currently trading above $70, CNQ’s potential is noteworthy. The company possesses substantial unexploited oilsands assets and achieves breakeven at a WTI price of $35, demonstrating its operational efficiency.

However, our enthusiasm is tempered by the unpredictable nature of oil markets and growing environmental concerns surrounding oilsands. The global shift towards greener energy and electric vehicles could potentially constrain CNQ’s long-term growth prospects.

Nevertheless, CNQ is exceptionally well-positioned to capitalize on oil price booms. Since fall 2020, the stock has more than doubled in value. Previous heavy investments are now yielding higher free cash flow, reflecting the company’s strategic foresight.

CNQ’s resilience during the challenging 2020 period is particularly noteworthy. For investors seeking a long-term play in the oil & gas sector, CNQ consistently ranks at the top of our list at Dividend Stocks Rock (DSR).

Dividend Growth Perspective:

CNQ boasts an impressive dividend growth streak spanning over 20 years. Recently, the company has accelerated its dividend growth strategy with remarkably generous increases. These include a 28% hike at the start of 2022, a special dividend, and an additional 13% increase later that year.

This dividend performance underscores the resilience of CNQ’s business model and confirms its capability as a robust dividend grower. With the oil market currently showing strength, CNQ is well-positioned to generate healthy cash flows for the foreseeable future, supporting continued dividend growth.

The company’s ability to maintain and grow its dividend, even through industry downturns, demonstrates its financial strength and commitment to shareholder returns. For investors seeking both capital appreciation potential and growing dividend income in the energy sector, CNQ presents a compelling option.

Telus (T.TO) – 19 Years of Dividend Increases

• 6.86% Dividend Yield
• 7.25% 5 Year Revenue Growth
• 6.73% 5 Year Dividend Growth
• 251.01% Payout Ratio
• 44.29 P/E

Investment Thesis:

Telus has demonstrated consistent growth across revenues, earnings, and dividend payouts. The company holds a strong position in the wireless industry and is actively expanding into other growth areas such as internet and television services.

A key strength of Telus is its superior customer service in the wireless sector, evidenced by its low churn rate. The company effectively leverages its core business to cross-sell wireline services, particularly in its stronghold of Western Canada.

Telus is well-positioned to capitalize on the 5G technology wave. Furthermore, the company is diversifying through innovative and profitable ventures. Emerging divisions such as Telus Health, Telus Agriculture, and Telus International (TIXT.TO, focusing on artificial intelligence) are small but promising growth drivers for the future.

Dividend Growth Perspective:

Telus stands out as a Canadian Dividend Aristocrat and is widely regarded as the industry’s premier dividend payer. The company maintains a high cash payout ratio while simultaneously allocating significant resources to investments and capital expenditures.

Substantial capital expenditures are a recurring feature of Telus’s financial strategy, primarily directed towards broadband infrastructure development and network enhancement. These investments are crucial for maintaining competitiveness in the telecommunications sector. To bridge any cash flow gaps resulting from these investments, Telus currently relies on financing.

Despite these capital-intensive commitments, Telus continues to increase its dividend biannually, reflecting strong management confidence in the company’s financial health and future prospects. Investors can anticipate mid-single digit dividend increases on an annual basis.

This balanced approach of reinvesting in the business while maintaining a robust dividend growth policy positions Telus as an attractive option for investors seeking both growth potential and reliable income in the telecommunications sector.

Stella Jones (SJ.TO) – 18 Years of Dividend Increases

• 1.21% Dividend Yield
• 9.34% 5 Year Revenue Growth
• 13.90% 5 Year Dividend Growth
• 16.26% Payout Ratio
• 15.54 P/E

Investment Thesis:

Stella-Jones (SJ) maintains a strong market position, primarily serving utilities and railroads – sectors known for consistent, sizable orders and reliable payments. The company experienced significant revenue growth between 2017 and 2021, driven by strong demand from both Canadian and U.S. markets. While growth has moderated since late 2021, SJ continues to expand.

In 2023, SJ reported impressive financial results, fueled by surging demand for infrastructure products. The company’s geographical diversification, with 15 facilities in Canada and 25 in the USA, provides a robust operational foundation.

SJ has proven its resilience as a defensive stock during the pandemic. Although the “lumber COVID-hype” has subsided, SJ’s core business remains solid, benefiting from multiple growth vectors. While residential construction may face headwinds due to rising interest rates, ongoing infrastructure needs and major projects continue to drive sales growth.

Management’s recent announcement of seeking acquisition targets is particularly promising, given the company’s track record of successful integration of past acquisitions. This strategic approach to growth aligns well with SJ’s long-term expansion plans.

Dividend Growth Perspective:

Stella-Jones has demonstrated an impressive dividend growth trajectory, nearly doubling its payout over the past five years while maintaining a notably low payout ratio. The company’s recent dividend increases have been particularly generous:

• 2021: Increased from $0.15/share to $0.18/share
• 2022: Further increased to $0.20/share
• 2023: Raised to $0.23/share

These substantial increases reflect management’s commitment to balancing shareholder returns with investments in growth opportunities. The low payout ratio, combined with consistent dividend growth, suggests that SJ has ample room for future dividend increases.

This balanced approach to dividend growth and business expansion positions Stella-Jones as an attractive option for investors seeking both income growth and capital appreciation potential in the industrial sector. The company’s ability to maintain dividend growth while pursuing acquisitions and organic growth opportunities demonstrates its financial strength and management’s shareholder-friendly policies.

Emera (EMA.TO) – 16 Years of Dividend Increases

• 21.92 P/E

• 5.87% Dividend Yield

• 3.00% 5 Year Revenue Growth

• 4.08% 5 Year Dividend Growth

• 77.61% Payout Ratio

Investment Thesis:

Emera presents an attractive investment opportunity in the utility sector, with a robust core business established on both sides of the U.S.-Canada border. The company boasts $32 billion in assets and generates annual revenues of approximately $6 billion. Emera’s operations are well-established in Nova Scotia, Florida, and four Caribbean countries, providing geographical diversification.

A key focus for Emera is its commitment to green energy projects, including both hydroelectric and solar plants. The company’s growth strategy includes plans to invest $8.4 to $9.4 billion in new projects between 2022 and 2025. This focus on sustainable energy sources mitigates the risk of future regulatory impacts as the global energy landscape shifts towards greener alternatives.

Notably, about 70% of Emera’s capital expenditure plan is targeted at Florida, where the company already has a strong presence. Florida’s constructive regulatory environment is favorable for rate increases, supporting Emera’s growth prospects. These factors combine to make Emera a “sleep well at night” (SWAN) investment option.

Dividend Growth Perspective:

Emera has demonstrated a consistent track record of dividend growth, increasing its payments annually for over a decade. The acquisition of TECO Energy has further bolstered this commitment to dividend growth. Looking ahead, management projects a 4-5% dividend growth rate through 2025, while targeting a payout ratio of 70-75%.

With a current dividend yield exceeding 4%, Emera presents an attractive long-term holding for income-focused investors. While the payout ratio may appear high at first glance, the adjusted earnings reveal a more sustainable payout ratio of approximately 80%, even accounting for recent dividend increases.

This combination of steady dividend growth, sustainable payout ratio, and focus on green energy initiatives positions Emera as an ideal fit for retirement portfolios. The company offers a balance of current income and potential for future growth, aligning well with the needs of long-term, income-oriented investors in the utility sector.

National Bank (NA.TO) – 13 Years of Dividend Growth

• 3.82% Dividend Yield
• 7.32% 5 Year Revenue Growth
• 10.28% 5 Year Dividend Growth
• 42.05% Payout Ratio
• 11.96 P/E

Investment Thesis:

National Bank of Canada (NA) stands out as my personal top pick for both 2022 and 2023. The bank has strategically focused on capital markets and wealth management to drive its growth. Private Banking 1859 has emerged as a significant player in this arena, with the bank expanding its private banking presence into Western Canada to capture additional market share.

Given its strong concentration in Quebec, NA has forged strategic partnerships, such as providing credit to investment and insurance firms under Power Corp. (POW). This approach has contributed to NA outperforming the Big 5 banks over the past decade.

NA’s flexibility and proactivity in growth areas like capital markets and wealth management have been key to its success. The bank is now exploring additional growth vectors through investments in emerging markets, such as its stake in ABA Bank in Cambodia, and its U.S. operations through Credigy.

While there are questions about NA’s ability to replicate Bank of Nova Scotia’s international success, early indications suggest they may have found an effective formula. NA stands out as one of the rare Canadian stocks with a near-perfect dividend triangle, making it an attractive option for dividend-focused investors.

Dividend Growth Perspective:

Despite its strengths, investors should be aware of potential risks. NA’s heavy dependence on Quebec’s economy as a hyper-regional bank makes it more vulnerable to local economic fluctuations. While this hasn’t significantly impacted the bank to date, monitoring provisions for credit losses is advisable.

Economic recessions and rising interest rates could affect NA’s debt portfolio. Additionally, the volatility of capital markets revenues means NA could face challenging quarters during bearish market conditions.

While NA has performed exceptionally well, its growth strategy involves taking on slightly more risk to find new growth vectors (e.g., ABA Bank investment, focus on capital markets). This approach has been successful so far, but past performance doesn’t guarantee future results.

Investments in emerging markets like Cambodia add an element of unpredictability and could be subject to rapid changes. Investors should weigh these factors against the bank’s strong performance and dividend growth track record when considering NA as part of their portfolio.

Alimentation Couche-Tard (ATD.B.TO) – 13 Years of Dividend Growth

• 0.85% Dividend Yield
• 3.72% 5 Year Revenue Growth
• 24.25% 5 Year Dividend Growth
• 16.60% Payout Ratio
• 21.25 P/E

Investment Thesis:

Alimentation Couche-Tard (ATD) presents a compelling long-term investment opportunity, with expectations of double-digit dividend growth and strong stock price appreciation. The company’s potential is closely tied to its ability to acquire and successfully integrate additional convenience stores.

Management has consistently demonstrated its proficiency in executing acquisitions at favorable prices and generating synergies from each transaction. This strategic approach has resulted in a solid combination of revenue growth, increasing earnings per share (EPS), and strong dividend growth – the key components of the dividend triangle.

ATD’s growth strategy extends beyond acquisitions, encompassing multiple organic growth vectors:

1. Fresh Food Fast initiative
2. Optimized pricing and promotion strategies
3. Improved product assortment
4. Cost optimization measures
5. Ongoing network development

Notably, ATD has shown foresight in anticipating the shift towards electric vehicles, positioning itself to profit from this evolving market trend. This proactive approach to industry changes further strengthens its long-term growth prospects.

Dividend Growth Perspective:

ATD’s dividend growth outlook is particularly attractive, with projections of double-digit increases in the long term. This robust dividend growth, coupled with anticipated stock price appreciation, makes ATD an appealing option for both income-focused and growth-oriented investors.

The company’s dividend growth potential is underpinned by its successful acquisition strategy. Management’s proven track record in identifying, acquiring, and integrating convenience stores at the right price points has been a key driver of ATD’s financial performance.

ATD’s strong performance across all aspects of the dividend triangle – revenue growth, EPS expansion, and dividend increases – provides a solid foundation for sustainable dividend growth. This balanced approach to financial management suggests that ATD is well-positioned to maintain its dividend growth trajectory while continuing to invest in business expansion.

The company’s focus on organic growth initiatives, such as its Fresh Food Fast program and ongoing network optimization, further supports its ability to generate the cash flow necessary to fund both dividend growth and continued business expansion. As ATD continues to evolve and adapt to changing market conditions, including the transition to electric vehicles, it is likely to maintain its position as a leader in the convenience store sector and a reliable dividend growth stock.

Toronto Dominion Bank (TD.TO) – 12 Years of Dividend Increases

• 5.96% Dividend Yield
• 6.55% 5 Year Revenue Growth
• 8.03% 5 Year Dividend Growth
• 68.32% Payout Ratio
• 13.53 P/E

Investment Thesis:

Toronto-Dominion Bank (TD) faced significant challenges in 2023, with negative media coverage contributing to a decline in its stock value. However, this depressed stock price presents an attractive value proposition for 2024. Long-term investors recognize TD’s strong market position, holding either the first or second market share for most key products in the Canadian retail banking segment.

What sets TD apart is its significant U.S. presence, accounting for about a third of its business. This includes a valuable 13% stake in Charles Schwab, stemming from the merger of TD’s brokerage operations with Schwab.

Despite concerns about a slowing economy, the Canadian banking sector is likely to prove more resilient than many predict. Furthermore, the U.S. economy has shown remarkable strength recently, which bodes well for TD’s American operations.

Dividend Growth Perspective:

TD maintains its status as a Canadian Dividend Aristocrat, a designation that allows for occasional pauses in dividend growth. Shareholders benefited from a 6.8% dividend increase in early 2020, just before regulatory restrictions temporarily halted dividend growth across the sector.

The bank’s recent dividend growth history is impressive:

• 2021: 12.7% increase
• 2022: 7.8% increase
• 2023: 6.25% increase (announced late in the year)

Looking ahead, investors can anticipate mid-single-digit dividend increases. This projection is supported by TD’s relatively low payout ratios and strong capitalization. The bank’s robust capital position was further strengthened by its decision to exit the potentially risky acquisition of First Horizon Bank, leaving TD with substantial cash reserves. This financial flexibility is likely to support future dividend increases and share buybacks.

Brookfield Corp – 11 Years of Dividend Growth

• 0.67% Dividend Yield
• 11.97% 5 Year Revenue Growth
• -6.13% 5 Year Dividend Growth
• 45.23% Payout Ratio
• 75.50 P/E

Investment Thesis:

While the Brookfield family of companies can be challenging to analyze due to their size and complexity, Brookfield Corporation (BN) stands out for its unique corporate structure and impressive past performance. This structure ensures access to substantial liquidity for financing projects.

Key points:

• Brookfield projects alternative asset allocation to increase from 25% to 60% by 2030, offering a lower-risk entry into renewables.
• The company’s global presence and diversified business foundation suggest significant long-term growth potential.
• Recent years have seen an increase in both the number and size of average client commitments.

BN’s dual role as an asset-light manager (earning fees on Assets Under Management) and asset owner allows it to benefit from its strategies through potential future asset sales at a profit.

Asset recycling is a core strategy, involving selling high-value assets and reinvesting in new projects or undervalued assets – embodying the “buy low, sell high” principle.

BN exemplifies “corporate synergy,” profiting at multiple stages of project development while offering unique expertise and comprehensive solutions to clients. With a current price-to-book ratio of 1.35x, BN appears to be an attractive investment for 2024, though the full potential may take longer than a year to realize.

Dividend Growth Perspective:

Following the spin-off of Brookfield Asset Management (BAM), BN has emerged as a relatively low-yield stock (less than 1%) with strong growth expectations. Investors can anticipate annual dividend increases, continuing the company’s aggressive dividend growth policy. However, for those seeking higher immediate yields, the original BAM might be a more suitable option.

BN’s advantage lies in its ownership stakes across various Brookfield assets, while BAM focuses on asset management, generating revenue through fees charged on assets under management.

This structure positions BN for potential long-term dividend growth, albeit from a lower initial yield. Investors should weigh their preference for immediate income versus long-term dividend growth potential when considering BN versus BAM.

Canadian Dividend Stocks with 10 Years of Dividend Increases

The past few years have been marked by significant economic volatility and market upheaval. This tumultuous period has included:

1. Pandemic-induced panic selling
2. The rise of meme stocks and localized market bubbles
3. Persistent inflationary pressures over the last 18 months
4. Rising interest rates leading to increased debt costs and compressed profit margins

Despite these challenging conditions, a select group of 38 Canadian companies has demonstrated remarkable resilience and consistency. These businesses have steadily increased their dividends year after year, seemingly unaffected by the economic turbulence around them.

These companies represent a diverse range of sectors and have proven their ability to maintain and grow shareholder returns even in the face of:

• Global health crises
• Extreme market volatility
• Inflationary pressures
• Fluctuating interest rates

For investors seeking stability and reliable income growth, these dividend aristocrats offer a compelling investment proposition. Their track record of consistent dividend increases suggests strong financial health, effective management, and business models capable of weathering various economic storms.

To access the complete list of these Canadian dividend growth stocks that have remained steadfast through recent economic challenges, please click the link below. This resource can serve as a valuable starting point for investors looking to build or enhance a resilient, income-focused portfolio.

Invest With Conviction MDJ

This list provides an excellent foundation for further research into companies that have demonstrated both the willingness and ability to prioritize shareholder returns through consistent dividend growth, regardless of broader economic conditions.

Most Recent News on Canadian Dividend Stocks

We are currently navigating uncharted waters in the aftermath of aggressive fiscal and monetary policies. Interest rate hikes appear to be effective, with inflation showing signs of gradual decline, more noticeably in Canada than in the USA. Even the resilient American consumer seems to be feeling the impact.

The persistent “higher for longer” interest rate narrative significantly affected several top Canadian dividend stocks in 2023. With ultra-safe, risk-free GICs offering guaranteed 5.25% returns, the risk-reward balance for Canada’s utilities, pipelines, and telecommunications companies has shifted considerably.

However, it’s crucial to maintain perspective. The year 2023 wasn’t disappointing for dividend stocks overall. Canadian dividend ETFs posted gains in the 4-8% range, coupled with a 4.5% dividend yield – a respectable performance.

These returns may seem modest compared to the exceptional performance of tech stocks like Shopify or Constellation Software. However, it’s worth noting that dividend stocks didn’t experience the same degree of downturn in 2022 that tech stocks did.

It’s important to remember that our recommended companies possess durable, long-term competitive advantages. The challenges in constructing new pipelines, telecommunications networks, utilities, or major banks in Canada underscore the value of existing assets. While higher interest costs may slightly impact profit margins, they remain sustainable.

As a side note, the appreciation of the US Dollar against the Canadian Dollar could actually benefit the Canadian economy. While it may impact holiday planning or import costs, it effectively discounts Canadian goods and services for the world’s largest consumer market.

Canadian energy companies, along with firms like Nutrien, Cameco, gold miners, and agricultural producers, have benefited from increased demand for their products.

The potential reduction of interest rates to the 3.5% range over the next 12-18 months could significantly benefit Canadian dividend stocks. While inflation might prove more persistent than anticipated, current indications suggest the Bank of Canada may need to implement rate cuts sooner rather than later.

I continue to prioritize dividend growth stocks, overall revenues, and effective management that builds value. My conviction in my portfolio remains unwavering, given the durable advantages these companies hold, their reasonable current valuations, and their proven track record across various market conditions.

My Recent Dividend Track Record

I began making public dividend stock recommendations in 2021. That year, I predicted that Canada’s midstream companies were being unduly affected by negative press and commodity price fluctuations. We identified a market inefficiency, as pipeline profits are only loosely correlated with commodity prices. Our top Canadian dividend stock pick was Enbridge, which performed well for us. We sold about 10% of our position near the peak and haven’t added to it since, given the company’s current debt levels.

More recently, my Canadian dividend kings pick for both 2022 and 2023 was National Bank, which has delivered satisfactory overall performance.

As Canada’s sixth-largest bank, it offers a combination of a low risk floor (due to its solid balance sheet and competitive advantage in Quebec) and a relatively high ceiling compared to other Canadian banks, thanks to its smaller market cap. Management has consistently demonstrated a commitment to long-term shareholder rewards, a trend I expect to continue based on their most recent earnings report.

My performance has been competitive against benchmarks, and I’m even outperforming my dividend colleague Mike Heroux in some of his portfolios (while admittedly trailing in others). Mike’s publicly-posted track record over the last decade provides a useful comparison point for dividend investing strategies.

Dividend Investing in Canada – Frequently Asked Questions

Q: How do dividend stocks work? A: Dividends are payments made by companies to their shareholders from their profits. These are typically distributed quarterly, though some companies pay annually. Dividend-focused companies usually announce their dividend plans for the upcoming year, allocating their after-tax profits between dividends and retained earnings. While companies can reduce or eliminate dividends at any time, many investors prefer stocks with a history of consistent dividend growth.

Q: How are dividends paid? A: Dividends are paid on a per-share basis to shareholders. The dividend amount is often expressed as a percentage of the stock’s current price, known as the dividend yield. For example, a stock with an 8% dividend yield and a $50 share price would pay $4 in annual dividends per share, typically distributed in four $1 quarterly payments. Companies may also issue special one-time dividends. To receive a dividend, you must own the stock before the announced “ex-dividend date”.

Q: How can I buy dividend stocks in Canada? A: Most investors purchase dividend stocks through online discount brokerage accounts. Popular options include Qtrade and Questrade. Alternatively, you can invest in dividend-focused ETFs listed on the Toronto Stock Exchange (TSX) for instant diversification. Robo-advisors like Wealthsimple also offer dividend investment options.

Q: When should I buy dividend stocks? A: The best time to buy dividend stocks is when you have funds available for investing. Attempting to time the market perfectly is challenging and often unsuccessful. Many successful dividend investors follow a consistent strategy of investing surplus funds into well-researched dividend-paying companies they intend to hold long-term.

Q: When should I sell dividend stocks? A: Ideally, you should hold dividend stocks for the long term. However, a significant dividend cut can be a red flag indicating potential company issues. It’s crucial to do thorough research before purchasing stocks to minimize the need for selling. Consistent dividend growth often signals a company’s financial health and commitment to shareholder returns.

Q: What are the best dividend stocks? A: The best dividend stocks typically demonstrate consistent growth in revenues, earnings per share (EPS), and dividends – a concept known as the “Dividend Triangle”. While high dividend yields can be attractive, focusing on these three factors often leads to more secure long-term dividend payouts and capital gains.

Q: Are there tax benefits for dividend investing in Canada? A: Yes, dividend investing can be tax-efficient, especially for lower-income individuals. Canada offers both federal and provincial dividend tax credits. These credits are designed to prevent double taxation, as companies pay corporate taxes before distributing dividends. The “gross-up and credit” system often results in lower effective tax rates on dividend income compared to other income types. In some cases, retirees with low overall income may even experience negative tax rates on their first $30,000 of dividend income.

For more detailed information on brokers, ETFs, and dividend investing strategies, consider exploring resources at Million Dollar Journey or consulting with a financial advisor.