Top 100 dividend stocks in Canada
With the Bank of Canada having cut interest rates for the first time in four years on June 5, we may have reached an inflection point, according to market watchers. Dividend stocks, which have underperformed the past two years as interest rates rapidly rose, are poised to come into their own.
High rates punish dividend payers in two ways, the theory goes. They lure capital towards safer interest-bearing assets such as bonds and guaranteed investment certificates (GICs) that now boast competitive yields. And they raise financing costs for dividend-heavy sectors that do a lot of borrowing, such as utilities, pipelines and real estate.
Once rates start to fall, though, dividend stocks tend to outperform other kinds of stocks. Their high yields start to look more attractive again compared to deposits and fixed income—raising the prospect of higher earnings multiples combined with high income yield as investors rotate back into the sector.
Consider our list of the top 100 Canadian dividend stocks for 2024, below, as a starting point for your search for investing prospects, not the final destination. You may find yourself looking long and hard for what investors typically consider dividend aristocrats: banks, telecoms, utilities, pipelines and real estate investment trusts (REITs). (They’re here. It’s just not that obvious.) Understand that this exercise is meant to identify candidates based on quantitative factors including not just dividend yield and sustainability, but also measures of profitability, financial strength and value. (Learn more about our best dividend stocks methodology.)
Scoring the best dividend stocks in Canada
- The yield score (40% weighting) looks at the current dividend yield and the growth of the dividend over the past five years.
- The stability score (40% weighting) reveals the debt-to-equity ratio, return on equity, five-year earnings growth, and ratio of earnings per share to dividends.
- The valuation score (20% weighting) reflects the stock’s earnings yield (the inverse of price-to-earnings) and price-to-book value.
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Rating the top 100 dividend stocks in Canada
Many dividend-seeking investors gravitate towards bank stocks—but these have taken a backseat in this year’s top 100. While scoring reasonably well on dividends and valuation, the bank stocks suffered from substandard stability scores relative to most Toronto Stock Exchange–listed dividend payers in 2023, notes Aman Raina, investing coach and founder of Sage Investors, who extracted the data. “The insurance companies, by contrast, show more balance in scoring. So, if you are looking for financial exposure, this subsector appears to have some decent upside.”
Another surprise in this year’s best dividend stock list was how well commodity-producing companies scored on all three criteria. “With potential for inflation and interest rates to fall, leading to potentially lower real rates, this could give the [materials and energy] space some legs for a run in 2024,” Raina says.
Depending on your own investment process, treat the list below as a source of ideas, to be augmented by more thorough due diligence, especially throughout 2024. Our screening does not account for qualitative factors such as the expertise of company management, consumer and/or technological trends, or risks associated with the countries in which the companies operate, for example.
To view all the data in the table, slide the columns right or left using your fingers or mouse. You can filter or rearrange the rankings by using the search tool or clicking on column headings. You can also download the data to your device in Excel, CSV and PDF formats.
The top dividend stocks in Canada for 2024
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