Top 10 Canadian Dividend Stocks to Buy Now

Looking for reliable dividend income in Canada? Here's a quick guide to the top 10 Canadian dividend stocks for 2025, offering steady payouts and growth potential. These stocks are listed on the TSX, making them eligible for the Canadian dividend tax credit, which can reduce your tax burden compared to other income types.

Key Highlights:

• Sun Life Financial (TSX:SLF): 3.98% yield, strong insurance and asset management fundamentals.
• Russel Metals (TSX:RUS): 4.10% yield, industrial metals leader with a 7-year dividend growth streak.
• Royal Bank of Canada (TSX:RY): 3.32% yield, Canada’s largest bank with 14 years of dividend growth.
• Pulse Seismic (TSX:PSD): 9.57% yield, seismic data specialist with low debt and high profitability.
• Power Corporation of Canada (TSX:POW): 4.63% yield, diversified financial holdings with a 16-year growth streak.
• National Bank of Canada (TSX:NA): 3.31% yield, 47 years of consistent payouts, regional banking strength.
• IGM Financial (TSX:IGM): 5.20% yield, wealth management focus with a 31-year dividend history.
• Canadian Imperial Bank of Commerce (TSX:CM): 4.1% yield, over 150 years of uninterrupted dividends.
• Atrium Mortgage Investment (TSX:AI): 9.49% yield, monthly payouts in the mortgage lending sector.
• Acadian Timber (TSX:ADN): 6.38% yield, forestry operations with sustainable management practices.

Quick Comparison Table:

Company	Ticker	Dividend Yield	Dividend Growth Streak	Sector	Key Feature
Sun Life Financial	TSX:SLF	3.98%	4.8% recent increase	Insurance/Asset Mgmt	Strong global diversification
Russel Metals	TSX:RUS	4.10%	7 years	Metals Distribution	Resilient industrial exposure
Royal Bank of Canada	TSX:RY	3.32%	14 years	Banking	Largest Canadian bank
Pulse Seismic	TSX:PSD	9.57%	4 years	Energy Services	High yield, low debt
Power Corporation of Canada	TSX:POW	4.63%	16 years	Financial Holdings	Diversified revenue streams
National Bank of Canada	TSX:NA	3.31%	47 years	Banking	Regional expertise
IGM Financial	TSX:IGM	5.20%	31 years	Wealth Management	Consistent income
Canadian Imperial Bank of Commerce	TSX:CM	4.10%	14 years	Banking	Longest dividend history
Atrium Mortgage Investment	TSX:AI	9.49%	14 years	Mortgage Lending	Monthly payouts
Acadian Timber	TSX:ADN	6.38%	10 years	Forestry	ESG-focused, natural resources

These stocks cater to a variety of risk levels and sectors, offering something for every dividend-focused investor. Whether you prefer stable bank stocks or high-yield options like Atrium Mortgage Investment, this list has you covered. Start building your portfolio today!

Top 3 Canadian Dividend Stocks for 2025 (Passive Income Machine!)

<iframe class="sb-iframe" src="https://www.youtube.com/embed/iaThugN8j_E" frameborder="0" loading="lazy" allowfullscreen style="width: 100%; height: auto; aspect-ratio: 16/9;"></iframe>

1. Sun Life Financial (TSX:SLF)

Sun Life Financial stands out as a reliable choice for Canadian investors seeking steady dividend income. This Toronto-based insurer and asset manager has a track record of dependable payouts backed by strong business fundamentals and diverse operations.

Dividend Yield

As of June 2025, Sun Life offers a dividend yield of 3.98%, making it a competitive option within the financial sector. Earlier this year, the company increased its quarterly dividend from $0.84 to $0.88 per share - a 4.8% rise - showing confidence in its cash flow and financial health.

Company Fundamentals

Sun Life operates as a well-rounded financial services provider, offering a mix of asset management, wealth solutions, insurance, and health products across multiple markets. With a market capitalization of CA$49.90 billion, it ranks among the largest financial institutions in Canada.

The company’s dividends are underpinned by strong earnings, supported by healthy payout and cash ratios. This financial stability ensures a cushion during economic downturns while leaving room for future dividend growth.

Another indicator of its financial strength is its LICAT ratio of 149% as of Q1 2025. This metric, which measures capital adequacy for insurers, is well above regulatory requirements, highlighting Sun Life's ability to weather challenges.

CEO Kevin Strain has prioritized digital integration and strategic capital management, which are key drivers of the company’s ongoing growth and resilience.

With these solid fundamentals and a sustainable dividend strategy, Sun Life continues to be a standout option for income-focused investors.

Why It Matters for Canadian Investors

For Canadian dividend investors, Sun Life offers several advantages. Being listed on the TSX, its dividends qualify for the dividend tax credit, making them more tax-efficient compared to interest income or foreign dividends.

The company’s strategy of expanding into high-growth markets, particularly in Asia, complements its strong Canadian base. This global diversification, combined with its revenue streams across insurance, asset management, and wealth services, provides stability and growth potential through various economic cycles. Sun Life Financial checks all the boxes for investors seeking a dependable and growth-oriented dividend stock.

2. Russel Metals (TSX:RUS)

Russel Metals is a dividend-paying powerhouse in the metals distribution sector. Headquartered in Toronto, the company operates across Canada and the United States, supplying steel and other metal products to industries like construction, manufacturing, and more. Known for its disciplined approach to managing capital and a solid history of dividend growth, Russel Metals is a compelling choice for those looking to boost their dividend income.

Dividend Yield

As of June 2025, Russel Metals offers a dividend yield of 4.10%, translating to an annual dividend of $1.72 CAD per share, paid out quarterly. The most recent quarterly dividend was $0.43 per share, with an ex-dividend date of 29 May 2025 and a payment date of 16 June 2025. With a payout ratio of around 63.2%, the company demonstrates a healthy balance between rewarding shareholders and retaining earnings for future growth, ensuring both stability and flexibility.

Dividend Growth Streak

Russel Metals has consistently increased its dividends for seven consecutive years. For instance, the quarterly dividend rose from $0.38 in early 2023 to $0.43, marking a 2.4% increase. This steady growth reflects the company's financial health and its commitment to delivering value to shareholders.

Company Fundamentals

With a market capitalisation of approximately $2.37 billion CAD, Russel Metals is a key player in the metals distribution industry. The company focuses on providing essential materials that are critical to sectors like construction and industrial manufacturing. In Q1 2025, Russel Metals demonstrated strong financial discipline, allocating $25 million to share buybacks and $24 million to dividends. Its cash flow payout ratio of 42.2% further highlights its ability to sustain and grow its dividend program.

Why It Matters for Canadian Investors

For Canadian investors, Russel Metals offers a mix of reliable income and tax advantages. Being listed on the TSX means its dividends qualify for Canada’s dividend tax credit, making it a tax-efficient choice for income-focused portfolios. The company’s operations in both Canada and the United States provide geographic diversification, helping to smooth out revenues during economic ups and downs. Its focus on supplying essential industrial materials ensures a steady demand, even in uncertain times, while offering growth opportunities during economic expansions. Russel Metals stands out as a consistent income generator with added tax benefits, making it a solid pick for Canadian dividend investors.

3. Royal Bank of Canada (TSX:RY)

The Royal Bank of Canada (TSX:RY), the largest bank in the country, is a cornerstone of the Canadian financial sector. Known for its stable dividends and broad range of services, RBC has long been a dependable choice for investors. Let’s break down its dividend yield, growth history, financial health, and why it’s a standout option for Canadians.

Dividend Yield

As of June 2025, RBC offers a dividend yield of 3.32%, with quarterly payouts of CA$1.54 per share. These dividends are distributed in February, May, August, and November, with the next payment scheduled for 22 August 2025 (ex-dividend date: 24 July 2025) [2][4]. Its payout ratio of 44.4% reflects a cautious and sustainable approach to dividends [3].

Dividend Growth Streak

RBC has consistently increased its dividend for 14 straight years, with an average annual growth rate of 6.9%. Most recently, in May 2025, the bank raised its quarterly dividend by six cents, bringing it to CA$1.54 per share [3][5].

Company Fundamentals

RBC’s strength lies in its diversified business model, which spans personal and commercial banking, wealth management, insurance, and capital markets. This balanced approach ensures stability and positions the bank for growth. Additionally, its commitment to an active share buyback program further enhances shareholder value.

Why It Matters for Canadian Investors

For Canadian investors, RBC’s dividends come with the added benefit of being eligible for the country’s dividend tax credit. With its solid domestic foundation and expanding international presence, RBC remains a trustworthy choice for building a resilient dividend portfolio.

4. Pulse Seismic (TSX:PSD)

Pulse Seismic stands out in Canada's energy sector by offering a distinctive opportunity for dividend-focused investors. The company specializes in acquiring, marketing, and licensing seismic data to oil and gas exploration firms across the country. With attractive dividend yields and solid financial health, it has carved a niche for itself.

Dividend Yield

As of June 2025, Pulse Seismic boasts a dividend yield of 9.57% [7]. Shareholders receive regular quarterly dividends, amounting to an annual payout of approximately CA$0.27 per share [8]. These payments are well-supported, with a payout ratio of 21.8% and a cash payout ratio of 67.5% [7][9]. Since it trades on the TSX, its dividends qualify for the dividend tax credit, offering an added advantage for Canadian investors. This robust yield, coupled with a disciplined payout approach, paves the way for sustained dividend growth.

Dividend Growth Streak

Pulse Seismic has consistently increased its quarterly dividend for four consecutive years and has been raising payments steadily over the past decade [6][9]. On 22 April 2025, the company’s Board of Directors approved a 17% increase in its regular quarterly dividend [13], reinforcing its commitment to rewarding shareholders.

Company Fundamentals

Operating within the Oil & Gas Equipment & Services sector, Pulse Seismic is a lean organization with just 15 full-time employees [10][11]. The company has a market capitalization of approximately CA$158 million and owns a substantial seismic data library [10][11]. Its profitability metrics are impressive, with a profit margin of 37.70% and a return on equity (ROE) of 59.84% [10]. Additionally, the company maintains a remarkably low debt-to-equity ratio of 0.01%, ensuring financial stability and resilience [10][12].

Relevance to Canadian Investors

Pulse Seismic offers tax-efficient, eligible dividends, making it an appealing choice for Canadian investors [14]. Listed on the TSX under the symbol PSD, it provides easy accessibility for those looking to diversify their portfolios. The company has also demonstrated its dedication to shareholder returns through special dividends, including a CA$0.20 per share special dividend declared in February 2025 [13]. These qualities make Pulse Seismic a strong contender for tax-advantaged dividend portfolios in Canada.

5. Power Corporation of Canada (TSX:POW)

Power Corporation stands out as a diversified financial services holding company, with notable subsidiaries such as Great-West Lifeco and IGM Financial.

Dividend Yield

As of June 2025, Power Corporation offers a dividend yield of 4.63% [15][16]. The company distributes CA$0.613 quarterly (totalling CA$2.45 annually), with the next ex-dividend date set for 30 June 2025 and payment scheduled for 1 August 2025. A payout ratio of 54.38% highlights that these dividends are comfortably supported by the company’s earnings [16].

Dividend Growth Streak

Since 2009, Power Corporation has consistently increased its dividend for 16 consecutive years [15]. Most recently, in March 2025, it raised its quarterly dividend by 9%, bringing it to 61.25 cents per share [20]. Over the past year, dividends grew by 8.05%, while the five-year growth rate stands at 4.80% [16][19]. With a history of paying dividends for 31 years, Power Corporation has built a reputation as a dependable choice for income-seeking investors [18].

Company Fundamentals

The company’s diversified portfolio is the backbone of its stability and growth. Strong profit margins and reliable cash flow - reflected in a cash payout ratio of 35.3% [17] - ensure that dividends remain sustainable. Its business spans life insurance, asset management, and alternative investments, creating multiple revenue streams. This diversification helps the company maintain steady distributions, even during uncertain market periods, making it a resilient option for consistent returns.

Relevance to Canadian Investors

All dividends from Power Corporation qualify as eligible dividends under the Income Tax Act (Canada) [21]. With its 4.63% yield eligible for the dividend tax credit, the company provides a tax-efficient income stream for Canadian investors [17]. This combination of a strong yield, steady dividend growth, and tax advantages makes Power Corporation an appealing choice for both registered and non-registered portfolios.

6. National Bank of Canada (TSX:NA)

National Bank of Canada ranks as the sixth-largest bank in the country, offering services in personal and commercial banking, wealth management, and capital markets [23]. With total assets reaching CA$536 billion as of 30 April 2025, it has cemented its role as a key player in Canada's banking industry [25]. Let’s dive into its dividend performance and financial highlights.

Dividend Yield

As of June 2025, National Bank boasts a dividend yield of 3.31% [24]. Shareholders receive a quarterly payout of CA$1.18, with the next ex-dividend date set for 30 June 2025 and the payment scheduled for 1 August 2025 [24]. In May 2025, the bank’s Board of Directors approved a 4‑cent increase to the quarterly dividend, bumping it up to CA$1.18 per share [25].

Dividend Growth Streak

National Bank has maintained an impressive track record, increasing its dividend for 16 consecutive years since 2009. Even more notably, it has been paying dividends for 47 straight years [27][29]. Over the last three years, the bank has achieved an average dividend growth rate of 30.00% [26].

Company Fundamentals

The bank's strong fundamentals back its dividend growth. In Q2 2025, National Bank reported earnings per share of CA$2.85, surpassing forecasts of CA$2.38, along with revenue of CA$3.65 billion, exceeding the expected CA$3.28 billion. This performance boosted the stock by 3.65% [29]. The bank also recorded a 15.5% return on equity and maintained a payout ratio of 40.5% [30]. Its Common Equity Tier 1 capital ratio stands at 13.4%, meeting Basel III requirements [31], and Morningstar DBRS affirmed its Long-Term Issuer Rating at AA with a stable outlook [28].

"We are off to a strong start, and we are excited about the opportunities ahead." – Laurent Ferreira, President and CEO [29]

Relevance to Canadian Investors

National Bank’s dividend payments qualify for the Canadian dividend tax credit, making it an attractive option for local investors. Its acquisition of Canadian Western Bank has further diversified its revenue streams [28]. With a relatively low price-to-earnings ratio of 10.82 and analysts forecasting steady growth, National Bank offers a compelling mix of value and income for Canadian dividend-focused investors [30].

sbb-itb-24a3f88

7. IGM Financial (TSX:IGM)

IGM Financial stands out as a leading wealth and asset management firm, offering a reliable dividend option with a moderate yield compared to others in the top 10.

Dividend Yield

As of June 2025, IGM Financial provides a dividend yield of 5.20% [1], with quarterly payments of CA$0.563 per share [32]. The next ex-dividend date is set for 30 June 2025, with payment following on 31 July 2025 [32]. This yield surpasses those of several major Canadian banks but remains below higher-yielding, riskier choices like Pulse Seismic or Atrium Mortgage Investment. The company's fundamentals highlight a thoughtful approach to maintaining its dividend policy.

Company Fundamentals

Operating in Canada's wealth management sector, IGM Financial specializes in mutual funds, investment advisory services, and financial planning. Its payout ratio of 56.56% [34] suggests a sustainable dividend strategy. With a dividend history spanning 31 years [35], it has demonstrated consistency. While the 5-year dividend growth rate is -2.40% as of March 2025 [36], the dividend per share saw a substantial increase of 33.30% in the past year [36]. These factors make IGM Financial an attractive choice for Canadian investors seeking stability.

Relevance to Canadian Investors

Being listed on the TSX, IGM Financial’s dividends qualify for the Canadian dividend tax credit, offering tax benefits to Canadian residents. The company’s focus on the domestic wealth management market aligns well with Canada’s aging population and the increasing need for retirement savings. With a dividend yield of 5.20%, it sits comfortably above the bottom 25% of Canadian dividend payers (1.84%) but below the top 25% (6.11%) [33]. This positions IGM Financial as a balanced option for income-focused investors.

For those building a diversified dividend portfolio, IGM Financial provides exposure to the financial services sector, combining stability with a competitive yield.

8. Canadian Imperial Bank of Commerce (TSX:CM)

The Canadian Imperial Bank of Commerce (CIBC) is one of the Big Six banks in Canada, boasting a history of uninterrupted dividend payments that stretches back to 1868. This legacy makes it a reliable choice for dividend-focused investors.

Dividend Yield

As of June 2025, CIBC offers a dividend yield of 4.1%, with quarterly dividends of CA$0.97. The ex-dividend date is set for 27 June 2025, and payment will follow on 28 July 2025 [38][39]. Compared to its peers, this yield stands out - it's higher than Royal Bank of Canada's 3.32% and National Bank of Canada's 3.28%, although it falls short of Bank of Nova Scotia's 5.70% [37]. With a payout ratio of 46%, CIBC maintains a careful balance between rewarding shareholders and retaining earnings [40].

Dividend Growth Streak

Beyond its attractive yield, CIBC has shown a solid track record of increasing dividends. Over the past 14 years, the bank has steadily raised its dividend, with an average annual growth rate of 4.82%. The current annual dividend of CA$2.68 represents a 1% increase compared to the previous year [40][43]. This consistent growth underscores the bank’s commitment to rewarding its shareholders.

Company Fundamentals

As of 23 June 2025, CIBC shares were trading at CA$95.66, offering a forward yield of 4.06%. Analysts have given the stock a consensus Moderate Buy rating [41][42]. Zacks forecasts earnings of CA$5.50 for 2025, reflecting a modest growth of 1.10%, with a dividend cover of 2.0 - a sign of financial stability [39].

Relevance to Canadian Investors

CIBC’s listing on the TSX makes its dividends eligible for the Canadian dividend tax credit, adding an extra layer of appeal for local investors. With a yield of around 4.1%, CIBC compares favourably to benchmarks like the Banks - Foreign industry average yield of 3.97% and the S&P 500’s yield of 1.52% [44]. Historically, Canadian banks, including CIBC, have navigated interest rate increases effectively, supported by strong loan demand and healthy capital reserves [43].

For those aiming to build a dividend-focused portfolio, CIBC offers a dependable option with consistent growth and solid exposure to Canada’s banking sector.

9. Atrium Mortgage Investment (TSX:AI)

Atrium Mortgage Investment Corporation stands out as one of Canada's largest mortgage investment companies, focusing on residential and commercial properties in major cities across the country. For investors looking to generate steady income in the non-bank lending space, Atrium presents an intriguing option.

Dividend Yield

As of June 2025, Atrium boasts a 9.49% dividend yield[48], making it an attractive choice for income-seeking investors. Shareholders receive CA$0.0775 per share monthly, which adds up to CA$0.93 annually[46][47][49]. The dividend for June 2025 will be paid on 11 July 2025 to those holding shares as of 30 June 2025[45][46][47][49]. Compared to the Canadian market, where top dividend payers average a 6.11% yield, Atrium’s yield is significantly higher. However, this reflects the added risks inherent in mortgage lending.

Dividend Growth Streak

Atrium has consistently paid dividends for the past 14 years[51], with increases in payouts over the last 10 years[48]. This demonstrates the company’s dedication to rewarding its shareholders and maintaining a reliable income stream.

Company Fundamentals

In Q1 2025, Atrium reported a net income of CA$11.9 million[50], with basic earnings per share of CA$0.25 and total revenue of CA$22 million[51]. The percentage of Stage 3 loans in its portfolio decreased to 2.2%, the lowest since Q2 2023[50]. Additionally, the weighted average interest rate for its mortgage portfolio was 9.56% as of 31 March 2025[50]. CEO Robert Goodall commented on the company’s approach:

"We have been attempting to lower the risk profile of the portfolio by targeting lower-risk sectors and not chasing yield." [51]

Atrium’s allowance for mortgage losses stood at CA$29.1 million, or 3.33% of its portfolio[50]. These figures highlight the company’s cautious strategy and financial stability.

Relevance to Canadian Investors

As a Mortgage Investment Corporation (MIC) under the Canada Income Tax Act, Atrium’s dividends are taxed as interest income and are not eligible for the dividend tax credit[46]. However, investors can take advantage of the company’s dividend reinvestment plan (DRIP), which offers the chance to reinvest dividends into new shares at a 2% discount from the market price without incurring commissions[46][49]. The monthly dividend schedule ensures a steady income stream, appealing to those focused on regular cash flow.

CEO Robert Goodall also highlighted the company’s resilience:

"Atrium's results during past downturns have been exceptional." [51]

For Canadian investors willing to navigate the tax implications, Atrium provides a compelling opportunity to gain exposure to the mortgage lending market, backed by a history of consistent payouts and a focus on managing risks effectively.

10. Acadian Timber (TSX:ADN)

Acadian Timber Corporation wraps up our list, offering a unique opportunity to invest in forestry operations across Eastern Canada and the Northeastern United States. The company manages an impressive portfolio, including 775,000 acres in New Brunswick, 300,000 acres in Maine, and oversees timber services for an additional 1.3 million acres of Crown land [57].

Dividend Yield

One of the standout features of Acadian Timber is its 6.38% dividend yield as of June 2025 [52][53]. This yield surpasses those of major Canadian banks like Royal Bank of Canada (3.51%) and Canadian Imperial Bank of Commerce (4.14%), though it remains below higher-risk options such as Atrium Mortgage Investment (9.68%) [52]. Since at least 2022, the company has consistently delivered a CA$0.29 quarterly dividend [54].

Company Fundamentals

Acadian Timber's financial health is solid. With a market capitalisation of CA$320.9 million, the company reported CA$116.2 million in sales and CA$29.7 million in free cash flow for 2024, serving around 90 regional customers [55][56][57].

CEO Adam Sheparski highlighted the company's steady timber operations and its first major sale of voluntary carbon credits in 2024, which contributed positively to its financial results. The company’s core strategy focuses on generating cash flow from its timberland assets through sustainable forest management practices [57]. Additionally, Acadian Timber is diversifying its operations by entering the real estate and renewable energy sectors, as well as establishing internal harvesting operations in Maine [55].

Relevance to Canadian Investors

For Canadian investors looking for reliable income and exposure to natural resources, Acadian Timber stands out. Its five-year total shareholder return of 68–69% [54] significantly outpaces the TSX average, turning a CA$10,000 investment in 2021 into CA$16,900 in total returns [54]. With a dividend yield of around 6.38%, nearly three times higher than the average for its forestry peers [54], the stock is a compelling choice for income-focused portfolios.

While primarily an income stock with defensive qualities, Acadian Timber’s TSX listing ensures accessibility for Canadian investors. Its commitment to sustainable forest management aligns with growing interest in environmental, social, and governance (ESG) considerations. For those comfortable with the cyclical nature of the forestry sector, Acadian Timber provides a rare combination of steady dividend income and natural resource exposure, making it a valuable addition to the Canadian market.

Stock Comparison Table

Here's a breakdown of each stock's dividend yield, strengths, and risks as of June 2025. This table complements the earlier in-depth analyses, offering a quick snapshot of where each company shines and where challenges might arise.

Company	Ticker	Dividend Yield	Main Strengths	Key Risks
Sun Life Financial	TSX:SLF	3.97% [22]	Solid insurance fundamentals, diverse operations	Sensitive to interest rate changes, regulatory shifts
Russel Metals	TSX:RUS	4.02% [22]	Positioned for cyclical recovery, industrial exposure	Susceptible to commodity price swings, economic slowdowns
Royal Bank of Canada	TSX:RY	3.54% [22]	Strong market presence, stable banking operations	Credit risk, regulatory pressures
Power Corporation of Canada	TSX:POW	4.70% [22]	Broadly diversified holdings, focus on financial services	Complex corporate structure, market fluctuations
National Bank of Canada	TSX:NA	3.51% [22]	Low payout ratio (40.1% [58]), regional expertise	Heavy reliance on Quebec market, competitive pressures
IGM Financial	TSX:IGM	5.07% [22]	Growing wealth management segment, consistent income	Fee compression challenges, market dependency
Canadian Imperial Bank of Commerce	TSX:CM	4.18% [22]	Established banking legacy, strong dividend track record	Vulnerable to credit cycles, regulatory risks
Atrium Mortgage Investment	TSX:AI	9.73% [22]	Highest yield on the list, mortgage-focused strategy	Elevated risk profile, sensitive to interest rate changes
Acadian Timber	TSX:ADN	6.36% [22]	Exposure to natural resources, ESG-friendly appeal	Forestry market volatility, weather-related risks

From the table, it's clear that Atrium Mortgage Investment stands out with the highest yield at 9.73%, while Royal Bank of Canada offers a more conservative yield of 3.54%. Meanwhile, National Bank of Canada’s low payout ratio of 40.1% highlights its potential for future dividend growth, a point previously emphasized [58].

The current federal funds rate, ranging between 4.25% and 4.5%, has created pressure across the stock market. As Dan Lefkovitz from Morningstar Indexes observed:

"In contrast to the past couple years, the technology sector is not leading, and several members of the Magnificent Seven have stumbled. Meanwhile, more defensive, dividend-rich areas of the market have done well." [61]

This environment has favoured dividend-focused strategies. For instance, the Morningstar Canada Dividend Growth Index climbed 4% in May 2025, while the Dividend Yield Focus Index saw a 4.4% increase during the same period [60].

When assessing these stocks, cash flow sustainability remains a critical factor. Past examples, such as Kinder Morgan’s dividend cut in 2015 and AT&T’s reduction in 2021, serve as reminders that a high yield alone isn’t enough - evaluating the company’s ability to maintain payouts is just as important [59].

Conclusion

The ten Canadian dividend stocks highlighted here cover a variety of sectors and risk levels, offering a well-rounded starting point for anyone looking to build an income-focused portfolio in 2025. This variety aligns closely with recent market trends, showcasing the potential of dividend investing.

To illustrate, the Morningstar Canada Dividend Growth Index climbed 4% in May 2025, with an impressive 26.3% increase over the 12 months leading up to May 31. Similarly, the Morningstar Canada Dividend Yield Focus Index rose by 4.4% in May 2025, achieving an 18.7% gain during the same period [60].

However, successful dividend investing isn't just about yields. Factors like payout ratios and a company's financial health are essential in determining whether dividend payments will remain consistent over time. The detailed profiles of these stocks emphasize the importance of evaluating these aspects for long-term reliability.

It's crucial to consider your financial goals and risk tolerance before making investment decisions [22][62]. Each company operates in a unique environment, facing specific challenges that may affect its suitability for different portfolios. A strategy that works for one investor might not align with another's needs.

As the Canadian dividend market continues to shift, these ten stocks provide a strong base for creating a steady income-generating portfolio in 2025.

FAQs

What is the Canadian dividend tax credit, and how can it help investors in dividend stocks?

The Canadian dividend tax credit is a non-refundable tax credit aimed at reducing the taxes you owe on dividends received from Canadian corporations. Its main goal is to prevent double taxation on corporate earnings, making dividend income more tax-friendly.

This credit applies specifically to eligible Canadian dividends, giving investors a way to offset some of their tax obligations. By easing the overall tax load, it can boost the after-tax returns on dividend-paying stocks, making them a compelling option for income-focused investors in Canada.

What are the potential risks of investing in high-yield Canadian dividend stocks like Atrium Mortgage Investment and Pulse Seismic?

Investing in high-yield dividend stocks like Atrium Mortgage Investment and Pulse Seismic can offer attractive returns, but they also come with certain risks that investors need to weigh carefully.

For Atrium Mortgage, one significant risk is illiquidity. Mortgage investment corporations (MICs) aren't always easy to sell quickly, which could pose challenges if you need access to your funds on short notice. On top of that, their value is tied to market fluctuations, which could directly impact your returns.

With Pulse Seismic, the main concern lies in its high payout ratio. The company’s dividends currently exceed its free cash flow, raising questions about whether such payouts can be sustained if cash flows decline. Additionally, the company is heavily reliant on the energy sector, leaving it exposed to risks like fluctuating commodity prices, political developments, and broader economic downturns.

Both stocks are affected by market conditions, sector-specific volatility, and financial stability, all of which could influence their ability to maintain dividend payments. Diversifying your portfolio and carefully evaluating these risks within the framework of your overall investment strategy is essential before committing to such investments.

What should investors consider to ensure a company's dividend payments are sustainable when choosing top Canadian dividend stocks?

To evaluate whether a company’s dividend payments are sustainable, investors should pay close attention to a few critical factors:

• Payout ratio: A payout ratio in the range of 30% to 50% is often a good sign. It suggests the company is keeping enough of its earnings to reinvest in future growth while still rewarding shareholders.
• Dividend growth: Companies with a track record of steadily increasing dividends demonstrate financial stability and a strong commitment to their shareholders.
• Financial health: Take a closer look at profitability, cash flow, and debt levels. These indicators reveal whether the company has the capacity to maintain or even raise its dividend payments.

By analysing these factors alongside the company’s position in its industry and overall market conditions, investors can gain a clearer picture of the reliability of dividend-paying stocks in Canada.

Related posts

• 7 Best High-Interest Savings Accounts in Canada 2025
• Ultimate Guide to Investing in ETFs for Beginners
• TFSA vs RRSP: Which Account Should You Choose?
• Mortgage Rates: Fixed vs Variable Comparison

<script async type="text/javascript" src="https://app.seobotai.com/banner/banner.js?id=6859f29b5559d477e7654158"></script>