20 Best Canadian Dividend Stocks To Buy in 2024

Get ready for an exciting journey of wealth-building and consistent income with the best Canadian dividend stocks.

As an avid investor with a passion for exploring opportunities in the Canadian stock market, I’ve uncovered a handful of Canadian dividend-paying stocks that have consistently proven to be top performers. Investing in these gems has not only supercharged my portfolio returns but has also significantly increased my cash flow since 2018.

In this comprehensive article, I will share with you my carefully curated list of the best Canadian dividend stocks to buy now, providing you with a detailed overview of each stock, accompanied by key metrics and valuable insights to help you make well-informed decisions every step of the way.

Whether you’re a seasoned investor seeking to optimize your returns or just starting out on your investment journey, this article will be your go-to resource, providing you with the information and tools necessary to navigate the Canadian stock market with confidence.

So, join me as we explore the hidden treasures of the Canadian stock market. From established giants to up-and-coming stars, these top-rated stocks offer a pathway to consistent income and long-term financial success.

Grab a cup of coffee, sit back, and get ready to dive into the world of the best Canadian dividend stocks for wealth-creation.

Best Canadian Dividend Stocks: Editor’s Diversified Selection

• Best Energy Stock: Fortis (FTS)
• Best Utility Stock: Enbrige (ENB)
• Best Real Estate Stock: Granite REIT (GRT)
• Best Bank Stock: Royal Bank of Canada (RY)
• Best Mining Stock: Agnico Eagle Mines (AEM)
• Best Communications Stock: BCE 

Best Canadian Dividend Stocks for Reliable Income Generation

Canadian stocks have gained popularity in recent years as the Canadian economy continues to grow and diversify across different sectors. To help investors navigate the Canadian stock market, we have compiled a list of the best Canadian stocks to buy across various sectors. 

Whether you are a seasoned investor or a novice looking to enter the market, this list will provide you with valuable insights into the top-performing Canadian stocks and help you make informed investment decisions.

1. Fortis (FTS)

• Sector: Utilities
• Market Cap: $22.15 Billion
• Symbol: FTS.TO
• Yield: 3.71%
• Dividend: $0.42
• P.E Ratio: 20.56
• Dividend Payout Ratio: 79.26%

Fortis Inc., a Canadian electric utility holding company, is undeniably one of the best Canadian dividend-paying stocks available today. It provides electricity to over 3 million customers across Canada, the US, and Central America. Fortis is a reliable income generator with a remarkable 49-year track record of dividend growth.

What sets Fortis apart is its strategic focus on expansion, sustainability, and renewable energy. The company’s aggressive investments and expansion efforts have led to strong revenue growth, positioning Fortis as a leading Canadian dividend stock market player.

Fortis Inc. maintains strong financial health, low debt levels, and consistent profitability, providing a solid foundation for sustainable dividends. The company’s robust cash flow profile ensures comfortable dividend coverage even in challenging economic conditions.

In addition to its attractive forward dividend yield of 4.24%, Fortis aims to increase shareholder returns with an expected annual dividend growth rate of 6% until 2025.

Furthermore, the stock is reasonably priced compared to industry averages, presenting an opportunity for potential capital appreciation. Fortis’ recognition among hedge fund investors further affirms its status as an authoritative choice for generating sustainable passive income.

In summary, Fortis Inc. exemplifies the qualities of a dividend growth powerhouse with its strategic vision, remarkable dividend history, financial strength, attractive yield, reasonable valuation, and professional recognition, making it an exceptional Canadian dividend stock.

 

2. Enbridge

• Sector: Energy
• Market Cap: $108.98 billion
• Symbol: ENB.TO
• Yield: 6.57%
• Dividend: $0.65
• P/E Ratio: 44.02
• Dividend Payout Ratio: 126.48%

Enbridge, Canada’s largest natural gas distribution network, has consistently delivered impressive performance over the past 26 years, boasting a compound annual growth rate (CAGR) of 10%. Enbridge is a reliable income generator with a remarkable dividend payment history spanning 66 years.

The company’s extensive pipeline network encompasses natural gas and NGL pipelines across North America and the Gulf of Mexico, including infrastructure for crude oil, natural gas transmission, gas utilities, and renewable energy. This diverse portfolio ensures Enbridge’s long-term value in the industry.

Enbridge’s forward dividend yield stands at an attractive 6.39%, accompanied by a payout ratio of 126.48%. Although the payout ratio exceeds 100%, the company’s substantial cash flows provide robust support for its high dividend payout ratio, ensuring the safety of dividend distributions.

Continuing its impressive track record, Enbridge is now in its 27th year of increasing dividends, projecting a growth rate of 5-7%. The company’s solid free cash flow and distributable cash flow per share further solidify its ability to sustain dividend payments.

Considering the fundamental importance of natural gas and crude oil, Enbridge’s pipeline network remains invaluable for the foreseeable future. With its consistent dividend growth, financial strength, and strategic position in the industry, Enbridge is an exceptional choice for Canadian dividend stock investors.

3. Royal Bank of Canada (RY)

• Sector: Financial Services
• Market Cap: $183.14 billion
• Symbol: RY.TO
• Yield: 4.10%
• Dividend: $1.32
• P/E Ratio: 12.24
• Dividend Payout Ratio: 43.35%

4. BCE

• Sector: Communication Services
• Market Cap: $56.86 billion
• Symbol: BCE.TO
• Yield: 6.05%
• Dividend: $0.97
• P/E Ratio: 22.78
• Dividend Payout Ratio: 117.64%

BCE Inc., a dominant Canadian telecommunications company, holds a significant market share of approximately 30% in the industry. Alongside its telecommunications operations, BCE boasts a media segment that offers news and entertainment through diverse channels. The company is actively expanding into the realm of 5G technology, ensuring sustained growth and has consistently raised its dividend for 14 consecutive years, achieving mid-single-digit growth on average.

With a coast-to-coast reach, BCE establishes a robust presence across Canada, standing as the sole Big Three telecom with such extensive coverage. Despite operating with high payout ratios, the company has never faltered in meeting its dividend obligations, maintaining an impressive track record of uninterrupted payments without any dividend cuts.

BCE is renowned for its historical dividend yield of around 6%, securing its position as a reliable high-paying Canadian dividend stock. Moreover, the company holds significant stakes in Canada’s media landscape through its ownership of CTV, TSN, Crave, and iHeartRadio, further solidifying its influence in the industry.

5. Toronto-Dominion Bank (TD)

• Sector: Financial Services
• Market Cap: $159.5 billion
• Symbol: TD.TO
• Yield: 4.53%
• Dividend: $0.71
• P/E Ratio: 9.68
• Dividend Payout Ratio: 43.85%

6. Telus Corporation (T)

• Sector: Communication services
• Market Cap: $39.53 billion
• Symbol: T.TO
• Yield: 5.27%
• Dividend: $0.36
• P/E Ratio: 23.87
• Dividend Payout Ratio: 91.23%

Telus, one of Canada’s top three telecommunications companies, serves approximately 11 million subscribers with a wide range of telecommunications services and products. The company has a remarkable track record of consistently increasing its dividend annually since 2002, and it aims to continue this trend by targeting dividend growth of 7 to 10% in the future.

What sets Telus apart from its competitors is its expansion into the healthcare sector, with the potential spin-off of its Telus Health division. This move was reinforced by the recent acquisition of LifeWorks, which further strengthened Telus’ position in the digital health and wellness space.

Telus has also been at the forefront of 5G network technology, being among the first movers in this area. By the end of 2021, Telus plans to expand its 5G network to over 600 urban and remote communities in Canada. With a solid customer base of 15.2 million and a robust cash flow, Telus maintains a sustainable high dividend payout ratio.

In summary, Telus is a leading Canadian telecommunications company offering diverse services and products. With its commitment to dividend growth, expansion into healthcare, and technological advancements, Telus is positioned for continued success in the market.

7. Canadian Natural Resources Limited (CNQ)

• Sector: Energy
• Market Cap: $84.16 billion
• Symbol: CNQ.TO
• Yield: 4.76%
• Dividend: $0.90
• P/E Ratio: 8.94
• Dividend Payout Ratio: 27.66%

Canadian Natural Resources (CNQ) is one of the world’s foremost producers of crude oil and natural gas. With a global presence encompassing Canada, the United Kingdom, Gabon, and Cote d’Ivoire, CNQ’s operations are far-reaching.

Embracing the urgent need for environmental responsibility, CNQ has set an ambitious goal to achieve net-zero greenhouse gas emissions from its oil sands operations by 2050. This commitment is part of the groundbreaking “Oil Sands Pathway to Net Zero” initiative. CNQ’s dedication to sustainability has earned it the reputation of being Canada’s premier major oil and natural gas producer, distinguished by its double-digit one and five-year dividend growth rate and highly efficient cost structure.

Despite the inherent cyclicality of the industry, CNQ is poised to generate substantial free cash flow, rewarding its shareholders through increased dividends and strategic share buybacks.

Notably, CNQ has consistently raised its dividends, even during the challenging times of the pandemic. This sets it apart from other energy producers like Suncor. At its current trading price of $80.90 in November 2022, CNQ boasts an attractive forward dividend yield of 4.20%, distributing just over a quarter of its net earnings as dividends.

While investing in oil and gas companies can be a daunting endeavour in the long run, CNQ is expected to maintain its impressive performance throughout 2024 and beyond.

8. Canadian National Railway Company (CNR)

• Sector: Industrials
• Market Cap: $111.23 billion
• Symbol: CNR.TO
• Yield: 1.95%
• Dividend: $0.79
• P/E Ratio: 20.31
• Dividend Payout Ratio: 37.02%

The Canadian National Railway (CNR) stands as Canada’s largest railway company, operating an extensive 20,000-mile network that spans across Canada and the United States. It transports over 300 million metric tonnes of goods annually, showcasing its immense scale and reach.

With an impressive dividend growth streak of 27 years and a five-year dividend growth rate of 10.4%, CNR has consistently proven itself as a reliable investment option. Despite its relatively low yield, the company has outperformed the TSX index, delivering double the returns over the past decade with an annualized return of approximately 15.5%.

CNR boasts a well-diversified business model, ensuring that no single product line accounts for more than 25% of total revenues. This diversification mitigates risks associated with economic fluctuations and contributes to CNR’s ability to thrive under different economic conditions. Moreover, the company’s handling of the pandemic has garnered praise from industry experts, highlighting its adaptability and resilience.

While CNR’s consistent rise in stock price has resulted in a low yield, it is important to note that chasing yield can often lead to unfavourable outcomes. When evaluating its investment potential, investors should consider CNR’s strong track record, consistent growth, and well-managed operations. CNR’s status as a dominant player in the rail industry, combined with its financial stability and adaptability, positions it as an attractive choice for long-term investors seeking reliable returns.

9. National Bank of Canada (NA)

• Sector: Financial Services
• Market Cap: $32.31 billion
• Symbol: NA.TO
• Yield: 3.86%
• Dividend: $0.97
• P/E Ratio: 10.61
• Dividend Payout Ratio: 34.60%

National Bank of Canada, the sixth-largest bank in the country, boasts assets surpassing $350 billion and has been steadily expanding its operations beyond Quebec. With an extensive network of 389 branches and 929 ATMs spanning across Canada, the bank effectively serves 2.6 million customers.

Maintaining a prudent approach, the bank strives to keep its dividend payout ratio within the 40-50% range while achieving an impressive 5-year growth rate of 9.7%. Notably, it has outperformed its peers regarding share price appreciation over the past five years.

Globally, National Bank provides comprehensive financial services to commercial, corporate, retail, and institutional clients through its network of 495 branches and 1,480 banking machines. This smaller size grants the bank an advantage in adopting and executing strategies swiftly compared to its larger counterparts. Furthermore, given its historically low payout ratio, the bank is anticipated to continue its trend of increasing dividends.

The National Bank of Canada is a prominent financial institution with its substantial assets, widespread branch network, impressive dividend growth rate, and strategic positioning in the market.

10. TC Energy Corporation (TRP)

• Sector: Energy
• Symbol: TRP.TO
• Market Cap: $64.34 billion
• Yield: 6.56%
• Dividend: $0.68
• P/E Ratio: 33.20
• Dividend Payout Ratio: 109.85%

TC Energy Corporation is a leading North American oil and gas pipeline operator, operating an extensive network of infrastructure in Canada, the United States, and Mexico. With a focus on clean energy, the company manages an impressive 92,600 km of natural gas pipelines and 4,900 km of oil pipelines and renewable energy assets such as wind and solar power generation.

One of the key strengths of TC Energy is its 22-year dividend growth streak, reflecting its commitment to providing consistent returns to its shareholders. Currently, the company offers a dividend yield of 5.58%, with average annual dividend growth of 7% throughout its impressive streak. Despite recent adjustments to growth projections due to inflation and rising rates, TC Energy remains resilient in the face of challenges.

The company’s low-risk business model is another notable advantage. Approximately 95% of its EBITDA is derived from regulated or long-term contracted assets, minimizing the impact of unexpected market fluctuations. As a result, TC Energy has proven to be relatively unaffected by the disruptions caused by the pandemic. Furthermore, the stabilizing oil price has further contributed to its favourable performance, indicating a positive outlook for the future.

TC Energy Corporation is a reliable energy infrastructure provider. Its extensive network, commitment to clean energy, impressive dividend growth streak, and low-risk business model position the company as a strong contender in the North American energy sector. With a solid track record and a promising future, TC Energy offers investors an opportunity to participate in the sustainable growth of the energy industry.

11. Alimentation Couche-Tard (ATD)

• Sector: Consumer Staples
• Symbol: ATD.TO
• Market Cap: $69.49 billion
• Yield: 0.84%
• Dividend: $0.14
• P/E Ratio: 18.20
• Dividend Payout Ratio: 66.85%

Alimentation Couche-Tard (ATD), a renowned Canadian company operating under the popular brand name Circle K, has established itself as a global leader in the convenience store industry, with a vast network of over 15,000 stores worldwide.

What distinguishes Alimentation Couche-Tard is its impressive financial performance, characterized by robust revenue growth and substantial cash flow. Over the past five years, the company has achieved a remarkable dividend growth rate of more than 20%, demonstrating its commitment to providing substantial returns to its shareholders. In fact, Alimentation Couche-Tard has an impressive track record of sustaining dividend growth for 13 consecutive years.

While the current dividend yield may be less than 1%, the company’s rapid appreciation in share value presents an attractive opportunity for investors seeking overall returns. With a solid growth trajectory, Alimentation Couche-Tard has positioned itself as a compelling long-term investment option for defensive investors.

Moreover, the company is actively pursuing expansion opportunities in the electric vehicle (EV) market. With plans to introduce EV charging stations in key markets such as the US, Canada, and Norway, Alimentation Couche-Tard is poised for further growth and innovation. This strategic move aligns with the increasing demand for sustainable transportation solutions, reinforcing the company’s position as an attractive investment choice.

12. Brookfield Asset Management (BAM)

• Sector: Financial Services
• Symbol: BAM.TO
• Market Cap: $18.39 billion
• Yield: 3.99%
• Dividend: $0.44
• P/E Ratio: 7.13
• Dividend Payout Ratio: 44.85%

Brookfield Asset Management (BAM) is a renowned global alternative asset manager overseeing a vast portfolio of over $750 billion across various sectors such as real estate, infrastructure, renewable power, private equity, and credit.

Operating through four partnerships, namely Brookfield Property Partners, Brookfield Infrastructure Partners, Brookfield Renewable Partners, and Brookfield Business Partners, BAM has established a significant presence in more than 30 countries worldwide.

One of the key attractions for investors is BAM’s commitment to distributing 90% of its profits and consistently increasing dividend payouts each year, making it an appealing option for those seeking a reliable income stream.

Despite being a recently formed entity, BAM possesses a distinct advantage in terms of securing exclusive investment opportunities and ensuring access to proprietary deal flow. This factor, combined with its suitability for long-term investing strategies, distinguishes it from Brookfield Corporation (BN), which may offer higher potential capital growth.

Brookfield Asset Management is a leading global alternative asset manager, leveraging its extensive presence, strategic partnerships, and commitment to sustainable dividend growth to deliver attractive investment opportunities for income-focused investors with long-term horizons.

13. Granite REIT (GRT)

• Sector: Real Estate
• Symbol: GRT.TO
• Market Cap: $5.07 billion
• Yield: 3.97%
• Dividend: $0.27
• P/E Ratio:  35.02
• Dividend Payout Ratio: 44.85%

Granite REIT, a Canadian real estate investment trust, specializes in owning, developing, and managing logistics, warehouse, and industrial properties in North America and Europe. With an extensive portfolio of 118 properties spanning approximately 51.3 million square feet of leasable area, Granite REIT boasts an impressive occupancy rate of 99.6%.

As the e-commerce industry thrives, Granite REIT, focusing on institutional-quality assets in key distribution and e-commerce markets, is well-positioned to capitalize on this trend. Its diversified portfolio spans across seven countries, comprising 139 properties totalling 57.5 million square feet of leasable area.

Granite REIT offers an attractive forward annual dividend yield of 3.94%, making it a noteworthy choice for dividend investors seeking diversification. With its strong presence in the real estate market and commitment to delivering consistent returns, Granite REIT stands out as one of the premier dividend stocks in Canada.

14. Pembina Pipeline Corporation (PPL)

• Sector: Real Estate
• Symbol: PPL.TO
• Market Cap: $5.07 billion
• Yield: 3.97%
• Dividend: $0.27
• P/E Ratio:  35.02
• Dividend Payout Ratio: 44.85%

With a rich history spanning over 65 years, Pembina Pipeline Corporation has established itself as a prominent Canadian pipeline transport and natural gas company. Setting itself apart from other stocks on the TSX, Pembina pays out monthly cash dividends, a rarity in the market, boasting an impressive dividend yield of 6%.

Continuing its impressive track record, Pembina recently announced a 2.3% increase in its quarterly dividend, marking the seventh consecutive year of dividend growth. This growth puts Pembina in direct competition with two other major players in the industry: TC Energy and Enbridge.

The confidence in Pembina is evident through the ownership of stakes by fifteen hedge funds, with Two Sigma Advisors leading the pack, holding a substantial stake worth nearly $20 million.

Pembina Pipeline Corporation is a reliable and lucrative investment option in the Canadian market. With its long-standing presence, monthly cash dividends, consistent dividend growth, and significant interest from hedge funds, Pembina offers investors an opportunity to capitalize on sustainable passive income.

15. Agnico Eagle Mines (AEM)

• Sector: Mining
• Symbol: AEM.TO
• Market Cap: $5.07 billion
• Yield: 2.74%
• Dividend: $0.54
• P/E Ratio: 11.60
• Dividend Payout Ratio: 66.85%

Agnico Eagle Mines Limited, a prominent Canadian mining company specializing in gold and various commodities, has established a remarkable track record of shareholder dividends spanning four decades. Presently, the company offers a quarterly dividend of $0.54 per share, resulting in a dividend yield of 2.68%.

Agnico Eagle Mines Limited boasts a robust financial position, with $820 million in cash reserves and long-term debt amounting to $1.3 billion. With a stock price of $55 per share, trading at 26 times earnings, the company also presents a dividend yield of 2.9%.

National Bank, recognizing the impressive performance of Agnico Eagle Mines Limited, has raised its price target on the company’s stock to C$98 while maintaining an Outperform rating on the shares. Forecasts indicate that the company is expected to achieve net income nearing $1 billion, generated from $5.8 billion in revenue and a robust free cash flow of $758 million in 2023.

Agnico Eagle Mines Limited is a leading player in the mining industry, showcasing a strong dividend history, solid financials, and positive market recognition. The company’s commitment to consistent growth and reliable shareholder returns positions it as an exceptional investment opportunity.

16. Canadian Apartments REIT (CAR)

• Sector: Real Estate
• Symbol: CAR.TO
• Market Cap: $36.97 billion
• Yield: 4.50%
• Dividend: $0.27
• P/E Ratio: 6.94
• Dividend Payout Ratio: 66.85%

Canadian Apartment Properties Real Estate Investment Trust (CAPREIT) is a leading real estate investment trust operating an extensive portfolio of approximately 68,000 rental units across Canada. Renowned for its consistent profitability and dividend growth, CAPREIT offers investors a promising opportunity in the Canadian real estate sector.

CAPREIT has demonstrated a history of stable financial performance, bolstered by effective debt management and a solid liquidity position. Its impressive dividend yield of approximately 0.27% as of January 2024, further highlights its commitment to providing reliable returns to shareholders.

One of CAPREIT’s key strengths lies in its strategic diversification strategy, effectively mitigating risks associated with economic downturns and regional market fluctuations. The company ensures a resilient and sustainable business model by spreading its investments across multiple locations.

CAPREIT is an attractive investment option due to its consistent profitability, stable dividend growth, effective debt management, diversification strategy, and solid liquidity position. With its impressive track record and extensive portfolio, CAPREIT offers a compelling Canadian real estate market opportunity.

17. Manulife Financial Corporation (MFC)

• Sector: Financial Services
• Symbol: MFC.TO
• Market Cap: $2.38 billion
• Yield: 2.33%
• Dividend: $0.37
• P/E Ratio: 8.32
• Dividend Payout Ratio: 27.25%

Manulife Financial Corp (MFC.TO) is a leading Canadian-based financial services company operating in Canada, the US, and Asia. With a strong track record of profitability, the company has consistently paid its shareholders dividends for over 100 years. As of January 2024, MFC offers a dividend yield of around 0.37%.

MFC provides comprehensive financial products and services, including insurance, wealth and asset management, and banking solutions. The company’s diverse portfolio caters to the needs of individuals, businesses, and institutional clients.

Driven by a commitment to customer satisfaction, MFC strives to deliver innovative and tailored financial solutions. By leveraging its extensive industry expertise and global presence, the company aims to provide reliable and trusted services to its clients.

MFC’s strong financial performance and long-standing dividend payment history highlight its stability and commitment to generating shareholder value. With a continued focus on growth and expansion, MFC aims to strengthen its position as a leading player in the financial services industry.

Manulife Financial Corp (MFC.TO) is a well-established Canadian financial services company that consistently delivers profitability and dividends to its shareholders.

18. Equitable Group (EQB)

• Sector: Financial Services
• Symbol: EQB.TO
• Market Cap: $8.36 billion
• Yield: 2.95%
• Dividend: $0.12
• P/E Ratio: 504.62
• Dividend Payout Ratio: 66.85%

Equitable Group Inc. (EQB) is a prominent Canadian financial services company operating through Equitable Bank. It offers a comprehensive range of financial products and services, including residential and commercial lending, savings solutions, and digital banking services.

With an impressive average annual growth rate of over 15% in the past five years, EQB has demonstrated its resilience during challenging economic periods such as the COVID-19 pandemic.

Investors can benefit from EQB’s dividend yield of approximately 0.12%, which has grown at a rate of 10.5% over the past five years. The company maintains a strong liquidity position and follows a well-diversified business model with operations in various regions and segments. These factors make EQB an enticing investment option within the financial services sector.

19. Bank of Montreal (BMO)

• Sector: Financial services
• Market Cap: $88.99 billion
• Symbol: BMO.TO
• Yield: 4.87%
• Dividend: $1.43
• P/E Ratio: 7.39
• Dividend Payout Ratio: 30.64%

BMO, a prominent Canadian bank with a rich 204-year history and a vast customer base exceeding 12 million worldwide, is a formidable institution in the financial landscape. Since 1829, BMO has consistently delivered dividends and aims to distribute 40-50% of its earnings to shareholders.

With a robust presence in regional economies and global markets, BMO is well-equipped to cater to the diverse needs of corporate customers spanning borders.

Its extensive range of financial services and products caters to individuals, businesses, governments, and corporate clients across Canada, the US, and various other countries. While Canada remains its largest market, BMO has also established a significant presence in the US and other regions.

20. Bank of Nova Scotia (BNS)

• Sector: Financial Services
• Market Cap: $76.41 Billion
• Symbol: BNS.TO
• Yield: 6.24%
• Dividend: $1.03
• P/E Ratio: 10.82
• Dividend Payout Ratio: 47.01%

Scotiabank, a well-established Canadian bank with a global presence, offers a reliable investment opportunity in various international markets. Having consistently paid dividends since 1833 and raising them in 44 out of the past 46 years, Scotiabank boasts the highest forward annual dividend yield of 5.99% among Canada’s major banks, with a dividend payout ratio of 47.01%.

While it may not match the growth rate of other banks, Scotiabank demonstrates signs of improvement and potential for future expansion. This makes it an excellent choice for investors seeking a higher passive income stream.

Moreover, current market conditions present an opportune moment for investors to accumulate Scotiabank stock for long-term growth and benefits. Scotiabank’s longstanding reputation, consistent dividend history, attractive dividend yield, and potential for growth make it a compelling option for those looking to generate a reliable and substantial passive income.

What are Dividend Stocks?

Dividend stocks are shares of publicly traded companies that pay out regular dividends to their shareholders, typically on a quarterly, semi-annual, or annual basis. 

This type of stock provides investors with the potential for both dividend income and appreciation of the stock price, making it an attractive investment option for many. 

The best dividend stocks offer predictable and reliable payouts, which can serve as a reliable source of passive income. 

However, it’s important to note that various factors can influence dividend payouts, and not all stocks that pay dividends are necessarily good investments. 

Dividend stocks are typically issued by stable, mature companies with a history of generating consistent profits, often in industries less susceptible to economic downturns. As with any investment, conducting thorough research and considering various factors before investing in dividend stocks is important.

How We Chose The Best Canadian Dividend Stocks

Investing in dividend stocks can be a smart strategy for building wealth and generating passive income. With many options available in the Canadian market, selecting the best Canadian dividend stocks requires a systematic approach. At MoneyReverie, we have developed a rigorous methodology to identify our clients’ Canadian dividend stocks. Here, we outline the key factors we considered in our selection process.

• Financial Health, Stability, and Cash Flow of the Company: We analyzed key financial indicators, including debt-to-equity ratio, current ratio, and profitability metrics, to assess a company’s financial health. A strong balance sheet, low debt levels, and consistent profitability provide a solid foundation for sustainable dividends. We also evaluate cash flow statements to identify companies with robust cash flow profiles that can comfortably cover dividend payments. This indicates their financial strength and capacity to sustain dividends even in challenging economic conditions.
• Historical Performance of the Dividend Yield and Growth: One of the primary considerations in our methodology is the dividend yield and growth potential of a stock. The dividend yield measures the annual dividend payment relative to the stock price, indicating the return on investment. We look for stocks with attractive dividend yields that are sustainable and competitive within their industry. Additionally, we analyse the historical dividend growth rate to assess the company’s commitment to increasing shareholder returns over time.
• Value of the Stock: While dividend yield is important, we also pay close attention to the value of the stock itself. We evaluate whether the stock is reasonably priced based on fundamental analysis, comparing metrics such as price-to-earnings (P/E) ratio, price-to-sales (P/S) ratio, and price-to-book (P/B) ratio to industry averages. By considering the stock’s valuation, we aim to identify opportunities where the market may have undervalued high-quality dividend stocks.
• Popularity among Hedge Fund Investors: Monitoring the interest of hedge fund investors provides valuable insights into the potential of a dividend stock. Hedge funds often conduct extensive research and analysis before making investment decisions. By tracking their activities, we can identify stocks that have garnered interest from professional investors, indicating positive market sentiment and potential future price appreciation.
• Industry and Market Trends: Lastly, we consider industry and market trends to identify sectors in the Canadian market that offer promising dividend opportunities. We examine macroeconomic conditions, industry growth prospects, and regulatory environments to identify sectors with stable and growing dividends. By aligning our selections with favourable industry trends, we aim to maximise the potential for long-term dividend growth and capital appreciation.

By incorporating these key factors into our methodology, we strive to provide our readers and investors with a well-rounded selection of Canadian dividend stocks that can potentially deliver attractive returns over the long term. We consider multiple aspects such as dividend yield, dividend growth, safety, and financial health of the company.

It’s important to note that a high-yielding income stock may be placed lower on this list if it doesn’t meet our safety and financial health criteria. On the other hand, a low-yielding stock could be placed higher if it demonstrates consistent dividend growth and a strong financial position.

We caution against solely focusing on high dividend yields when selecting dividend stocks. This is a common mistake made by many dividend investors, especially those new to the strategy. Simply chasing high yields without considering factors like the dividend payout ratio or the company’s overall financial health can be risky. Our methodology considers these crucial factors to ensure a balanced approach to selecting the best dividend stocks for generating sustainable passive income.

Disclaimer: Please note that investing in the stock market carries risks, and thorough research and consultation with a financial advisor are recommended before making any investment decisions.

How To Buy the Best Canadian Dividend Stocks for 2024

In Canada, there are a variety of dividend stocks available across different sectors, providing investors with numerous options to choose from. If you are wondering how to buy stocks in Canada, we recommend using the best discount brokerages in Canada.

Our top choices for buying dividend stocks in Canada are Wealthsiple Trade and Questrade. 

Wealthsimple Trade is a popular discount brokerage in Canada that offers commission-free trading for dividend stocks and ETFs.

Questrade is another popular option for Canadian investors that offers free ETF purchases and low trading fees for stock trading.

RELATED: Questrade vs Wealthsimple: Canada’s Best Investing App

Final Thoughts on the Best Canadian Dividend Stocks

Inflation has become a global concern, and Canada is no exception. In fact, it reached a 40-year high, averaging 6.8% last year. The Canadian stock market was massively affected, with its benchmark index falling by 8.5% as of December 30, 2022.

Also, the recent turmoil in the banking sector, exemplified by the collapse of Silicon Valley Bank in March, further shook the Canadian market, resulting in substantial losses of nearly $20 billion in market capitalization for some of the country’s top banks.

The uncertainty surrounding the banking sector and expectations of a potential economic downturn have made investors wary. In response, many investors have turned to dividend equities as a means of navigating these challenging times. Dividend-focused stocks have therefore gained popularity as a steady investment option due to their ability to provide diversification across various sectors and industries while offering a reliable income stream.

Canadian dividend stocks offer a great opportunity for investors seeking steady income and long-term growth. With various options available in various sectors, investors can choose stocks that align with their investment goals and risk tolerance. 

While it is essential to conduct thorough research and consult with a financial advisor before making any investment decisions, the current state of the Canadian economy, coupled with the strong performance of top dividend stocks, suggests that now may be the perfect time to consider adding Canadian dividend stocks to your portfolio.

So why not take the first step and explore some of the best Canadian dividend stocks available? It certainly could be the start of a fruitful and rewarding investment journey for you.