Dividend Stocks have been gaining a lot of traction of late due to the current economic scenario that we are in. The COVID pandemic has done unprecedented damage to the global economy, which nobody was prepared for. As a result, governments were forced to print money and lower interest rates to all-time lows to stabilize the economy. Unfortunately, these measures have led to record-high levels of inflation. Low-interest rates combined with high inflation mean that traditional savings will almost certainly lead to wealth erosion. In such a scenario, dividend investing is a great alternative to traditional savings to generate passive income and create wealth.
Investors should look for non-cyclical and preferably non-discretionary businesses as they are most resilient. Such companies have stable cash-flows that allow them to pay out dividends continually. Other qualities that investors should consider are –
- High-barriers to Entry: Businesses in sectors such as power, utilities, etc., are usually government regulated are thus protected to some degree from competition.
- Dividend Track Record: A company’s dividend track record must be thoroughly examined to ensure that dividends are paid consistently over time. A dividend track record also shows the resilience of the company’s business.
- Capital Appreciation and Growth: Dividends are only one component of dividend investing. Investors should examine how the company has created value for stock appreciation and how earnings have grown over time. Companies that have grown dividends over time show sound management and prudent capital allocation.
The Best Monthly Dividend Stocks in Canada
Here, we will be looking at monthly dividend-paying stocks from different sectors. They give investors a stable passive income stream, gradually grow capital over time, and give them diversification benefits. Dividend investing is measured in terms of dividend yield. Thus, it is exactly like interest rates, where the yield is the rate and the stock price is the principal.
Pembina Pipelines (TSE: PPL) (Sector – Energy Infrastructure)
Pembina is an Energy infrastructure company. The company has a presence in natural gas liquids, natural gas, the crude oil. The company’s largest segment is pipelines, that transport crude oil and natural gas across various regions in North America.
Pembina owns 18000 kilometres of pipelines and owns 19 gas facilities. Pipelines make up 65% of the company’s earnings, followed by facilities (30% of earnings), gathering and processing energy commodities.
The pipeline space has high barriers to entry due to government regulation and high capital costs. Pembina’s business model works on long-term lock-in contracts with its clients, giving the company predictability of cash-flows and lower exposure to volatility in commodity markets. As a result, the company generates 90+% of earnings from fees agreed upon at contract initiation.
Most importantly, Pembina has a stellar track record of dividend payouts and growth. The company has steadily paid dividends over the past 22 years and has grown them at an average rate of 6.5% per year. As a result, Pembina has a dividend yield of 6.27%. In addition, the stock has returned 5.59% over the past years; however, that was after the adverse effect of COVID on the energy sector. Before COVID, the stock had returned 38.5%.
Exchange Income Corporation (TSE: EIF) (Sector – Industrials)
Exchange Income Corp. is a diversified industrials company. The company has a portfolio of businesses that cover the aviation, transport, and manufacturing sectors. Some of the company’s services include private aviation, aviation parts and equipment, emergency medical evacuation services, defence and industrial equipment.
Exchange Income has a very diversified income stream due to the uncorrelated nature of its businesses. However, due to the high CAPEX and complex nature of the aviation and industrial sector, Exchange Income gets recurring income in maintenance and equipment replacement. In addition, exposure to the defence sector lowers the cyclicality of the company’s performance due to consistent demand.
The company has grown by acquisition model. Exchange looks to acquire businesses that integrate well into their existing portfolio by creating synergies, good growth prospects, and good management.
The exchange had a stellar dividend history of the past 11 years when it converted from an Income Trust to a corporation. The dividends have compounded at a rate of 4.7% over the 11 past years. Furthermore, the stock has been an excellent performer with a CAGR of 20% over the last 15 years. Exchange Income has a dividend yield of 5.6%.
Shaw Communications (TSE: SJR.B) (Sector – Communications)
Shaw Communications is a desirable choice in the dividend investing space dominated by power and utility companies because of the importance of communications and the internet to future economic growth. Data consumption will explode over the next decade to the increasing digitization of businesses/services and digital content consumption. Therefore, in the years to come, the internet will most definitely become necessary for everyone, making this business a non-discretionary one.
Shaw is one of Canada’s biggest network companies and a major player in residential communications services. It owns over 860000 kilometres of fibre broadband that reached 55% of the Canadian population. Shaw provides broadband, WiFi, digital phone, satellite TV, and content services to its 7 million customers. The company generates 78% of its income from fixed-line services and the rest from wireless services.
Shaw Communications has had a stable dividend payout history for the past 20 and has grown dividends at 3.6% annually over that period. However, there are phases when the company does not increase dividends due to the capital-intensive nature of communications network infrastructure. Shaw Communications has returned 38% over the past 5 years and has a dividend yield of 3.25%.
Parkland Corporation (TSE: PKI) (Sector – Energy)
Parkland Corporation is one of Canada’s biggest fuel retailers, distributors, and marketers. The company operates a portfolio of retail fuel stations with convenience stores and a distribution and storage network for fuel and ancillaries. Parkland is the distribution partner of North America’s biggest names in Energy like Chevron and Esso.
The company has a presence in Canada, the United States, and the Caribbean. Parkland has 3 main target markets – retail, wholesale and commercial. The retail business caters to their chain of fuel stations while wholesale and commercial provide fuel, propane, lubricant heating oil, etc., to bulk buyers. The company has a retail fuel stations network that reaches 85% of Canadians.
The company gets 38% of earnings from Canada, 20% from international markets, 6% from the United States, and 36% from the supply.
Parkland has an 18-year history of paying dividends to shareholders. Over this period, the average annual dividend raise has been 1.7%, and dividend growth over the last 3 years has been 2.4%. As a result, Parkland has returned a solid 72% over the past 5 years in price appreciation and has a dividend yield of 3.1%.
Extendicare (TSE: EXE) (Sector – Retirement and Health Care)
Extendicare is a Canadian long-term care company that caters to the elder community. The company provides retirement housing services and home health care services. Extendicare operates a network of 120 senior retirement and long-term healthcare facilities run by a team of 23600 employees.
The company has three main segments – long-term care, home health care, and retirement living. It also has two ancillary segments of contract services and consulting. Extendicare has a very stable business model because its services are long-term and are a high-margin business. Stability also comes from the fact that government contracts generate 90% of revenue. The company also has excellent growth prospects due to Canada’s rapidly growing 60+ age bracket, which is expected to double by 2040 and makeup 25% of the total population by 2060.
The company has a solid dividend payout history of over 8 years. The company currently has a dividend yield of 5.71%.
First National Fincorp (TSE: FN) (Sector Finance)
First National is Canada’s largest non-bank lending company. The company’s main business is mortgaging, and it has originated north of 120 billion dollars of mortgages in the past 30 years. So while the pandemic had a short-term negative impact on the finance sector due to asset quality concerns, the long-term is very bright for housing, and in turn, for lending.
The pandemic has created two major catalysts for the housing and lending market. Firstly, COVID has induced a secular shift from office working towards work-from-home; this will make a house a far more attractive investment than earlier for many people. Secondly, as highlighted above, the current savings rates are lower than inflation, thus creating a big demand for housing as a home is both a stable investment and an appreciating asset in an inflationary environment.
The company has two major segments – residential real estate and commercial real estate. First National has extremely high asset quality, with 90% of mortgages in the prime category. Furthermore, 75% of the company’s mortgages are insured, which mitigates all risk from them. As a result, the company has a very stable business model as cash-flows are very predictable. First National gets 68% of revenues by repackaging mortgages into securities and selling them to institutional investors; thus, the risk is removed from their books instantly, profits are booked, and capital is freed up for new originations. The remainder of revenues is generated from interest (18%), investments (9%), and mortgage servicing (24%).
The company has a solid dividend payment history of 15 years since its IPO. Over the past 5 years, dividends have grown at 5% CAGR. Over the same period, EPS has grown at 12% CAGR, and the stock has grown 65%. As a result, First National has a dividend yield of 4.72%.
A&W Royalties Income Fund (TSE: AW.UN) (Sector – Food)
A&W Royalties Income Fund is a pure royalty revenue company. The company does not own or operate any of the A&W trademark restaurants in Canada, the 4th largest fast-food chain in the country.
The company purely collects revenues based on revenue shares. The fund gets royalties from over 1000 restaurants across Canada, generating a combined $1.4 billion in sales in 2020. Franchise owners of A&W restaurants pay the fund 3% of gross income. The fund is a very safe investment as it has the most capital-light model possible. It doesn’t own or operate any restaurants directly; it has no hefty operating costs or debt risk.
Exposure to the food sector is a must for a dividend investor’s portfolio as it is non-cyclical. A&W is even better as it is in the fast-food category, which is very popular among the millennial generation who don’t cook as much older generations and love fast food.
A&W had had an excellent dividend history over the past few years, apart from 2020, when the company chose to halt dividends due to lockdowns causing restaurants to be shut. Dividends have resumed in 2021. The company has maintained a steady dividend yield of 4%-6% over the past 5 years (except 2020). It currently has a dividend yield of 4.26%.
Granite REIT (TSE: GRT.UN) (Sector – Real Estate)
REIT are basically vehicles created to convert real estate assets into publicly tradable securities. REITs stand for Real Estate Investment Trusts.
REITs own real estate assets of various types such as commercial, industrial and residential. They are also very suitable investments for dividend investors due to the predictability of cash-flows and stable payout of dividends. Proceeds from profits on the sale of real estate and rent from the same are paid to investors as dividends. Given the current economic environment that we are in, REITs are desirable investments. Due to an inflationary environment, the value of real estate owned by the trusts and their rent is bound to grow. Also, the economy is now shaping up to rebound from COVID and enter a new growth phase.
Granite REIT owns a diversified portfolio of 97 properties across 9 countries on 3 continents. The bulk of these properties are in the US (43), followed by Canada (26) and Europe (28). The trust’s properties are mainly in the industrial space, with the rapidly growing logistics space having the most weight. This puts the trust in place to benefit from the growing e-commerce market.
The REIT has a stellar dividend payout history with 9 years of consistent payouts and growth. The REIT has a dividend yield of 3.46%. Furthermore, the trust has been a great wealth creator as it has appreciated 113.9% over the past 5 years.
Monthly Dividend Stock Investing Is a Great Low-Risk Strategy!
Currently, the inflation rate in Canada is at a decade high of 3.6%, while interest rates are sub 1%. In such a scenario, investing in resilient businesses that pay dividends and grow capital is a much smarter decision than letting your savings lose value in the bank. Dividend investing is also more tax-efficient as the tax rate on dividends is lower than on interest income.
The pandemic and all the disruptions experienced by people have led to several systemic and secular changes. Like work-from-home has changed the corporate and business world significantly, the pandemic has also brought personal finance to the forefront. Many people have been forced to rethink their personal finances and have learned the importance of saving the hard way. Dividend-paying stocks are among the most popular options for investors looking to generate passive income and grow their savings.
What About High Dividend Paying Stocks?
Dividend-paying equities are stocks of companies that pay part of their income out as cash to their shareholders. Companies choose to pay excess cash to their shareholders if they feel they don’t need it or cannot generate a meaningful return. A company paying a dividend is viewed as a positive sign as shareholders get a passive income. In addition, it signals that the company is generating more returns than it needs for its growth.
Dividend-paying companies have been attractive to investors for a long period of time. These stocks are typical in power/utility, steel, cement, FMCG, REITs (Real Estate Investment Trust), and pharmaceuticals. These sectors have stable demand, and companies mature in their life cycles with little capital to fuel growth. In addition, over the past decade, large technology conglomerates such as Apple have also started paying dividends due to high cash flows or excess capital.
Top 5 Canadian Highest Dividend Stocks to Invest in –
Best High Growth – Algonquin Power and Utilities (TSE: AQN)
Algonquin Power and Utilities is a Canadian renewable energy and utility conglomerate. The company operates assets throughout North America. Its asset portfolio contains wind farms, solar farms, hydroelectric plants, water plants, natural gas energy plants, and power distribution/transmission. The company is very stable as 80+% of its revenue comes from regulated assets (sole provider of essential services in an area), thus making it very attractive for dividend investors.
The company owns about $17.4 assets in its portfolio. In addition, the company plans to invest another $9.4 billion of assets by 2025, of which $6.3 billion will be in the regulated business, meaning that the stable earnings will continue to grow.
In Q1, the company reported earnings of $634 million (up 34% YoY), EBITDA of $289 million (17% YoY), and net profit of $124 million (up 21%). In addition, in light of the stellar performance, the company announced a 10% increase in dividends.
Algonquin offers a great dividend yield of 4.4%, a payout ratio of 40%, and has grown dividends by 10% annually over the past 5 years. Therefore, it ticks all boxes of a great dividend stock.
Best Stable Dividend Stock – Fortis (TSE: FTS)
Fortis is a Canadian natural gas and power company. The company has a gas transmission and power assets throughout North America. Most of the company’s assets are in regulated space, meaning revenue is stable.
British Columbia, Arizona, Alberta, Newfoundland, New York, Ontario, the Caribbean, and Prince Edward Island. Given Canada’s inhospitable climate, the company has a very stable demand due to natural gas for cooking and heating.
In Q1, Fortis reported revenues of $355 million, $0.76 per share (up 15 % YoY). However, the real clincher in Fortis’ favour is its extraordinary dividend history. The company has a dividend payment and growth history of 47 years. Fortis ‘ dividend’s average annual growth rate is 6% and offers a dividend yield of 3.6%. Fortis’ payout ratio is 73%. The company has forecast dividend growth of 6% till FY25.
Considering the stable nature of its business and its splendid dividend history, Fortis makes a great option for stable dividend seekers.
Best High Yield – Enbridge (TSE: ENB)
Enbridge is a Calgary headquartered multinational pipeline company. The company is the largest liquid hydrocarbon transportation company with over 5000 miles of pipelines throughout North America. The company is also a major player in the natural gas transportation business, with a 20% market share in the United States. In addition, the company transports 40% of all crude oil imports in the US. Enbridge is financially powerful, with a market capitalization of over $100 billion.
Due to regulatory and political hurdles of setting up an oil pipeline, the company benefits from high barriers to entry, which is very good for dividend investors and shareholders in general.
The company has a project pipeline of $17 billion. Enbridge has plans to enter renewable energy with a $4 billion investment after the current project pipeline is complete. The company is going to benefit from operating leverage as the energy sector rebounds from its COVID slump.
In Q1, the company reported EBITDA of $3.7 billion, down 2.6% YoY, and net earnings of $1.9 billion compared to a loss of $1.4 billion in Q1 2020. Enbridge has given full-year guidance of $13.9 billion to $14.3 billion. Enbridge has a solid dividend history owing to stable demand for oil/gas and high barriers to entry to its business. As a result, Enbridge offers a high dividend yield of 6.75% and has grown dividends at a rate of 10% annually over the past 25 years.
Canada National Bank (TSE: NA)
Canada National is a Quebec headquartered bank. Canada National is the country’s sixth-largest bank in terms of market share. However, the banking sector has had a tough year due to COVID raising concerns over asset quality. As a result, the bank was forced to create large loan-loss reserves. Fortunately, the outcome was much better than expected, and banking sector shares rebounded as reserves reversed. The bank’s stock is up 38% YTD and is currently trading at C$93.
The bank is particularly well-placed due to its focus on capital markets and wealth management. Since the initial shock of the pandemic, the stock market has been booming due to inflation, rate cuts, excess liquidity, and cheap debt. The bank will also benefit from the pandemic highlighting the importance of prudent wealth management.
In Q1, the bank outperformed analyst projections with revenues of $761 million (up 25% YoY) and EPS of $2.15 (up 29% YoY). Canada National has a dividend yield of 3.03%. The bank has been paying dividends consistently over the past 10 years, with an annual growth of 8.5% over the period. In the first quarter, the bank has a payout ratio of 41.4%.
Toronto Dominion Bank (TSE: TD)
Toronto Dominion Bank is the second-largest bank in Canada. The bank has about $1.73 trillion in assets. Toronto Dominion also has a significant presence in the US in 16 states and assets of $351 billion. In addition, the bank has announced plans to grow through acquisitions in the US.
Like Canada National, Toronto Dominion has weighed down COVID-related provisions, and its shares have heavily rebounded by going up 28% YTD. The bank is extremely cash-rich, which makes it a very safe choice for investors. The bank recently reported stellar results for the first half of FY21 with a net income of $7.15 billion, up 43% YoY. Over the past 5 years, the company has delivered EPS growth of 12% and share price growth of 10%
The bank is a favourite of dividend investors as it has a history of continually paying dividends since 1857. Since 1996, the bank has grown dividends at a rate of 11% 1996. As a result, the bank currently has a dividend yield of 3.69% and has a dividend payout ratio of 40%.
Why You Should Consider Investing in Dividend Stocks –
Dividend stocks are attractive to investors looking for passive income streams. Dividend stocks help investors to benefit from capital gains as well as a steady stream of income. Another advantage of dividend stocks is that they give investors a choice of what they want to do with their returns; instead of keeping or spending the dividends they receive, investors can reinvest the dividend in the same stock for compounding or invest in other assets. In non-dividend stocks, investors are forced to liquidate holdings if they want access to their returns.
Dividend stocks have become particularly attractive to passive income seekers as, over the past decade, interest rates have fallen dramatically and have lagged inflation. Since the crash of 2008, governments were forced to cut interest rates to all-time lows to prop up their economies. The resulting excess liquidity and cheap debt put the global economy in an inflationary period. In such an environment, sticking to traditional bank deposits or government bonds is an abysmal financial decision as inflation will continually erode a saver’s purchasing power.
The low-interest-rate environment has helped markets as it leads to more money being pumped into equities, thus leading to investors’ capital appreciation. A well-crafted portfolio of dividend stocks can result in a great return on capital along with a steady passive income stream, especially as the impact of COVID has pushed us into a low-rate environment for at least the next few years.
Dividend-paying stocks are tax-efficient than non-dividend stocks, as dividends are taxed at lower rates than interest income. For example, taxpayers in the highest bracket are just 29% on dividends in Canada, while interest income in the same bracket is taxed at 50%.
How to Evaluate Dividend Stocks –
Dividend investing is a complex process as a company that is paying dividends now might be able to pay them in the future or decrease them, which will lead to a drop in its stock price and destruction of wealth. Therefore, investors should carefully examine a company’s fundamentals to ensure that it will consistently generate excess cash to pay to its investors. These are some of the key metrics investors should examine before investing in a dividend-paying stock:
- Dividend Yield – The most basic barometer of a dividend-paying stock is its dividend yield. The dividend yield is basically the annual dividends paid out divided by the company’s stock price. Its calculation is similar to interest rates, but instead of capital, we use stock price, and instead of interest earned, we use annual dividend paid. Investors should be varied as a higher than usual dividend yield doesn’t necessarily mean a good investment. Investors should make sure they understand the reason behind higher-than-usual or above-average dividend yields.
- Payout Ratio – Payout Ratio is the ratio of earnings paid out as dividends to a company’s total earnings per share divided by earnings per share. The payout ratio could explain the safety of a company’s dividend and its growth prospects. On the other hand, a very high payout ratio might be risky because dividends consume most of its profits. As a result, any disruption or slump in its business could lead to a reduction or a halting of dividends. Therefore, a general rule-of-thumb is that investors should prefer stocks with payout ratios less than 60% but ones with growing dividend payout ratios as they demonstrate earnings growth.
- Free Cash Flow – Financial Accounting techniques are very complex, and key understanding is important to understand a company properly. For example, an uninitiated investor might think that its net profit is the cash it generates. However, net profit includes non-cash items such as depreciation and amortization. Free Cash Flow is the cash a company generates from its activities and is found in the cash-flow statement, not the income statement. A company that consistently generates high free cash flow will grow, service its debt and pay investors dividends. Conversely, a low FCF company is a big red flag for dividend investors.
- Price-to-Earnings Ratio – The PE ratio is the most popular valuation metric for investors. It is the ratio of price per share to earnings per share. It is generally used for comparative valuation, i.e., how expensive a stock is compared to peers.
- Return on Invested Capital – ROIC is the return a company generates on its investments. A company invests capital in building return generating assets. For example, the capital might come from its equity or debt. A company that generates a high return on invested capital has a higher chance of maintaining and growing dividends.
- Net Debt Ratio – The ratio of Net debt (Debt – Cash on hand) to the company’s total capital. A company with high debt is risky as any shortfall in earnings could reduce or stop dividends because debt obligations take precedence over dividends. Therefore, investors should vary net-debt ratios of over 50%.
- Total Shareholder Return/ Capital Gains – While dividend investors are mainly focused on dividend income, the total return from holding an investment/capital gains is also important as dividend yield alone is not enough to build wealth. Investors make sure that the company has solid management, resilient business models, and growth headroom so that their investment grows over time.
Different Types of Dividend Stocks –
Likes equities are divided into types like value and growth. There are different types of dividend stock themes that are popular among investors –
- High Yield Dividend Stocks – These are stocks that have dividends that outperform major benchmarks. These benchmarks could be equity indexes or government-issued bonds.
- Growth Dividend Stocks – These are stocks that have histories of growing their dividends over time. Growth dividend stocks are top-rated among investors as they signal a growing business and deliver gains through stock price appreciation and dividend growth.
- Stability Dividend Stocks – These stocks have low growth prospects or plans but have very resilient business models with steady demand. In addition, stocks in this category generally manufacture products or provide essential services, e.g. power or utility companies.
Risks to Consider When Buying Dividend Stocks –
While dividend stocks come with many advantages, some risks are to be considered when investing in them. A common risk to consider is the yield trap. A higher than average or unusually high yield could be temporary due to a drop in stock price, high one-time dividends due to unusual transactions such as an asset sale, or temporary high dividends due to better-than-average performance.
Investors should also consider interest rate risk. A rise in interest rates could make dividend stocks look less attractive to investors than risk-free bank deposits and government bonds, thus leading to a sell-off and capital loss.
Lastly and most importantly, an investor should thoroughly examine a company’s dividend history. A company that has been paying dividends consistently over a long period of time signals a resilient business and good management, while a company with an erratic or on-and-off dividend schedule signals cyclicality. Ideally, investors should look for companies with consistent dividend histories and gradual growth of dividends paid.
Dividend stocks are looking as attractive as ever due to the economic environment that we are in. Investors should pay attention to energy dividends stocks as the sector is gradually rebounding from COVID. However, investors should carefully consider the risks involved with dividend stocks and carefully examine a company committing to an investment.
Best Dividend Stocks Canada
Can you buy 3 of the Canadian dividend shares for under $50? Sources: 11
You’ve seen some of the best Canadian dividend shares you can buy and hold in your portfolio this year. We chose intact Financial as one of the main reasons is the good performance of the shares, which AQN has picked up as renewable energy becomes increasingly important. Sources: 3, 11
Fortis is ranked as one of Canada’s leading dividend stocks due to its long dividend growth streak and consistently generates sustainable cash flow. BLV has the second-largest dividend in Canada, just about qualifying to be a leading dividend payer. To close this gap, retirees should invest in a company that can deliver long-term dividend growth, such as Fortis or Suncor Energy. Sources: 2, 11
We’re a big fan of Canadian dividend stocks, so if you don’t have too much “Canadian home bias” in your investment portfolio, make sure your wealth distribution is still right. Personally, we believe that diversifying into the Canadian dividend stocks mentioned above and some of the lesser-known “Canadian dividend” stocks is a great strategy. If you are looking for stocks that increase dividends, you should use these and other metrics to value dividends. As part of a dividend security investment strategy, you want to fill your portfolio with stocks that pay high dividends. Sources: 1, 6, 7
You can also check out the best monthly dividend stock in Canada for regular distributions.
However, do not place US dividend shares in your TFSA, keep them outside your TFSA-registered account, or you will lose 15% of US withholding tax on your dividends. I hold many Canadian dividend shares because taxes are better than low taxes, and taxes on “Canadian dividend companies” are favourable. Sources: 7, 14
After all, investing in Canadian dividends – the distribution of shares – is limited to a country that accounts for only 3% of the global stock market. There is a wide range of dividend-paying stocks in the US, including Coca-Cola, PepsiCo and McDonald’s. Many North American dividend stocks are significantly undervalued, which provides a unique buying opportunity for long-term investors, making this an ideal time for a dividend investment strategy. Sources: 1, 5
I hope you find the Canadian Dividend All-Star List helpful to help you with your dividend growth strategy. You can track our quarterly dividend income to see if your dividend income continues to grow with the best dividend stocks in Canada. Sources: 7, 9
If you want to take your dividend investment to the next level, Dividend Stocks Rock (DSR) is a highly recommended product. Invest in the best dividend shares in Canada and Canada and start building a bright financial future today. Sources: 0, 4
The Toronto Stock Exchange has integrated Dividend Watch with thousands of Canadian dividend shares as a dividend calculator and portfolio tracker. The next two sections look at some of the best dividend stocks in Canada and Canada’s leading dividend companies. Sources: 1, 12
The other dividend ETFs (ZDV, CDZ, etc.) offer a more comprehensive view of the highest-paying Canadian dividend stocks. Canadian companies that have increased their dividends for five or more calendar years in a row are the Canadian Dividend Stock Index (DGI) ETF. The Canadian company, which has increased its dividend for five consecutive years, is offering more. Welcome to the second part of the D Dividend Stock Rankings for Canada, compiled by Kyle Prevost. High-quality “Canadian dividend shares” that have increased their dividend for five years in a row. Sources: 1, 9, 11
What sets these five dividend stocks apart is their high dividend yield and dividend history of high quality. Dividend investors look for a dividend share. Dividend investors prefer stocks with a low dividend ratio and a history of raising dividends over the years, while they choose dividend stocks with the highest yield. Sources: 1
Indeed, some of the above-mentioned dividend stocks currently pay dividends that can support a dividend yield of at least 4.5%, and sometimes even higher. Sources: 1
Since Canada’s five largest banks have paid dividends continuously since the nineteenth century, it makes sense to invest in Canadian bankers who continue to pay hefty dividends regardless of market conditions. Canadian bank with the highest historical dividend yield, dividend investors can buy the stock and wait for a dividend increase. If the best Canadian dividend stocks are listed above, you can expect Royal Bank to increase its dividend until at least early 2022, owing to the global pandemic.
Fortis (TSX: FTS) has been a mainstay of our dividend share list for years, and Suncor Energy is a candidate in many ways. Given the current climate of uncertainty, dividend security and reliability are the main reasons why Fortis is the highest dividend stock in Canada. Sources: 11
Why Monthly Dividend Stocks Canada
The next two sections look at some of Canada’s best monthly dividend stocks and the best dividend companies in the world. Here are 3 dividend stocks for your portfolio, More than 5 percent, paid for by 2 cheap dividend shares. Sources: 2, 14
You can download the key figures relevant to you by clicking on the links below and click here to download them now. For more information on stocks that pay monthly dividends in Canada and the rest of the world, please visit Motley Fool Canada’s monthly dividend list page. Sources: 5, 6
The monthly dividend share calculation allows you to sort by ratio and dividend yield, so you can quickly find undervalued and overvalued dividends – paying shares. Whether you are looking for dividend stocks that increase dividends or use other metrics to value dividends, make sure you diversify your portfolio with the best monthly dividends in Canada and the rest of the world. Buying a dividend share from a company that pays a monthly dividend helps you build a strong dividend portfolio and allows you to identify which stocks have the greatest potential to grow the portfolio over the long term, as well as the highest dividend yields. Sources: 11, 14, 15
Personally, buying one of the Canadian dividend stocks mentioned above and buying shares with lower – the so-called “Canadian dividends” – is a great strategy. It is better to buy them as part of a diversified portfolio than focus on one or two. After considering your limited options, pick one of your top three stocks that can offer both appreciation and dividend growth. Sources: 1, 10
If you want a more diversified portfolio with more than one or two dividend shares, you can do that. Sources: 7
Our dividend calendar includes the best dividend stocks from over 20 countries around the world. If you’re looking for dividends – stocks that you can add to your trading or investment portfolio – this article features some of Canada’s highest-yielding dividend stocks for April. And if you look at good, high-yield dividend stocks to add to a Tax-Free Savings Account (TFSA), we’ve covered that and some other good options. Sources: 2, 5
If you look at your dividend portfolio, you will find that you own many Canadian dividend stocks. If you are looking for a way to boost your RRSP or TFSA, some of the Canadian dividend stocks on our list today have a higher dividend yield than what you would get from your local bank’s savings account. We have reduced the list to 25 of the best for American investors. Sources: 1, 2, 9
The monthly dividend is rising rapidly, and the payout ratio should allow the stock to maintain its dividend even during economic downturns. With two bonus dividends in June and December, this could be the best dividend share in the market. Sources: 4, 8
This monthly dividend is for you, even if you are decades away from retirement. This 1.5% monthly payout ratio means that it has little or no risk of being overtaken by other dividend stocks in the market. Sources: 4
If dividend investing is something you are interested in, you can learn more about a proven investment strategy here by starting with the best monthly dividend shares on the Canadian stock market (TSX). The Canadian dividend growth values we focus on in this article can be used if you want a solid basis for any dividend, including undervalued dividend stocks. We have three TSX-listed dividend stocks that offer monthly payouts if you look for monthly income from funds or stocks. Sources: 12, 13, 16
In terms of dividends, these shares pay a monthly dividend of 0.10%, equating to approximately $1.05 per month for Immo Income, $0.00 per year for Real Estate Investment Trust (REIT) and $2.00 per week for BMO Financial Group (BNSF). BLV has a long history of paying dividends in shares and is a leading dividend payer. With a company with a long history and a consistent dividend, the stock with the safest monthly dividends on this list is the one with the best dividend growth. Sources: 0, 8
The dividend has averaged 16% annual growth over time and will increase dividend by 18% from 2019. The APU share is on the list of eligible dividend shares due to the increased distributions and the company’s long history with steady dividend growth. Sources: 4, 9
Long-term share price charts, ideally on the upward trend, should have a prime quality underlying business, a long history of dividend growth, and a growing dividend. Dividend investors are looking for dividend shares that are worth buying and holding for life. Rather than choosing dividend stocks with the highest yield, dividend investors prefer stocks with a lower dividend ratio and have a better chance of increasing dividends over the years if they choose them. Sources: 4, 14
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