Best Canadian Dividend Stocks – February 2024

As we look forward to a new year, it’s time to update our list of Best Canadian Dividend Stocks for February 2024.

  • Dividend Yield
  • Dividend Growth Consistency
  • Earnings Per Share
  • Overall Company Revenues

Click here to jump straight to my top 10 dividend picks for February 2024.

Given the great year that non-dividend tech stocks had in 2023, it might have gotten lost that our Canadian dividend stock picks had a very solid year as well. With interest rates looking to come down in 2024, I’d argue that our 2024 Canadian dividend stock recommendations have excellent prospects.

As folks start to move back into low-risk, income-oriented assets, from super-safe GICs and high interest savings accounts, there should be solid momentum for railways, banks, pipelines, etc.

That said, given the relatively strong earnings picture, the rapid decrease in inflation, and reasonable Canadian valuations (especially compared to American peer companies) Canadian dividend stocks continue to look very attractive to me (and there is a lot of crossover there with what some stock pickers call “value stocks”). 

FT

It doesn’t take a genius to figure out the sectors we pull most of our best Canadian dividend stocks list below from, are also the ones that were affected most by high interest rates. Utilities, pipelines, and banks, are all debt-intensive industries, so higher borrowing costs directly affect their bottom lines.

There will be some tough economic times over the next  six months – but remember – the stock market is always thinking ahead. We now see solid evidence that inflation is decisively falling, GDP is flat (or maybe in recession), and there will be increasing pressure on the Bank of Canada to begin cutting rates in 2024. The market will anticipate interest rate decreases, and the flow from short-term fixed income products back into equities should be substantial.

Best Canadian Dividend Stock To Buy Right Now

In a bit of a surprise twist, Our 2024 top Canadian dividend stock is Stella-Jones (SJ)!

Yeah, I know… a lumber producer? To be honest, I was tempted to pick National Bank as our 2024 best Canadian dividend stock prediction, but I figured taking the same stock for three years running might be kind of cheating (and it was definitely boring).

I also considered Telus, as I love the company, and the share price got really beat up in 2023. But, at the end of the day, Mike over at DSR finally won me over to Stella-Jones, as he has been talking about it for a while now. A solid acquisition record, and a very low payout ratio make up for the relatively meager current dividend yield. 

I like the diversity of their revenue sources (40% utility poles, 25% railway ties, and 35% residential lumber) as it ensures that they’re not too dependent on retail lumber markets. While the substantial rise in the stock price over the last couple of years does give me pause, earnings have kept up, resulting in a fairly attractive P/E valuation of about 15 to start the year.

We’ve had a pretty good recent track record with our top picks the last couple of years with Enbridge in 2021, and then National Bank for the last two years. In 2023 National Bank finished with a capital gain of nearly 11%, and with a dividend yield at the start of the year of around 5%, the total return of our #1 Canadian dividend stock pick was about 16% thanks to a fantastic end of the year. With the S&P TSX 60 returning 8% with a 3% dividend, National Bank was an excellent choice (and that index includes tech giants Shopify and Constellation Software which had crazy years).

I remain confident in the medium- and long-term prospects for National Bank despite some of the negative US-generated banking headlines this year. With the bulk of its mortgages in the relatively low-cost Quebec market, I’m not even concerned about the risks we see other Canadian banks taking into account (which aren’t that dire either).

As a longtime dividend investor (I’ve had a Canadian dividend investing portfolio for over 15 years now, since I started the Smith Manoeuvre) I’ve learned that while current dividend yield is a beautiful thing, it’s the long-term dividend growth and earnings per share (EPS) that will really drive your overall portfolio returns. 

My personal selection for the top dividend stocks for long-term investments are available below.

Our Top 10 Canadian Dividend Growth Stocks (February 2024 Updated)

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

Name

Ticker

Sector

Div Streak

Dividend Yield

5yr Revenue Growth

5yr EPS Growth

5yr Dividend Growth

Payout Ratio

P/E

Fortis

FTS.TO

Utilities

50

4.46%

6.54%

3.66%

5.78%

74.83%

17.10

Canadian National Railway Co

CNR.TO

Industrials

27

1.93%

3.28%

7.76%

11.67%

36.82%

20.45

Canadian National Resources

CNQ.TO

Energy

22

4.70%

21.95%

36.22%

23.03%

47.32%

13.25

Telus Corp

T.TO

Communications

19

6.28%

7.25%

-15.42%

6.73%

251.01%

41.50

Stella Jones

SJ.TO

Materials

18

1.15%

10.20%

10.18%

12.70%

20.33%

15.28

Emera

EMA.TO

Utilities

17

5.93%

4.04%

23.41%

4.66%

75.03%

11.20

National Bank

NA.TO

Finance

13

4.09%

7.32%

9.57%

10.28%

42.05%

11.06

Alimentation Couche-Tard

ATD.TO

Business

13

0.85%

7.78%

16.63%

22.42%

12.22%

19.55

TD Bank

TD.TO

Finance

12

5.05%

6.55%

-1.40%

8.03%

68.32%

14.44

Brookfield Corp

BN.TO

Finance

11

0.79%

11.97%

-22.46%

-6.13%

45.27%

66.27

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For my full 32-stock list of Canadian dividend earners that I’m buying today – as well as the 74-stock list of US Dividend all stars that I recommend – check out the platform that I personally use to do my dividend stock research.

Note: Data on this article updates periodically. If you are looking for real time data and guidance, read our recommendation below.

Up to Date Dividend Stock Data & Picks

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Canadian Earnings Per Share vs Dividend Growth in 2024

Because I’m looking to invest in Canadian dividend stocks for the next several decades, I like to look at medium- and long-term trends when it comes to the company’s earnings and their dividend growth. These metrics tell me two important facts:

1) Is the company generally making more money each year?

2) Does management believe in rewarding shareholders with dividend increases on a consistent basis?

Here’s a look at how our top Canadian dividend stocks stack up over these two metrics.

eps growth per company
dividend growth per company

Now of course, 5-yr dividend growth and 5-yr earnings growth are not the only criteria that matters. It has to be taken in context.

For example when we look at the two charts above, the following facts jump out at me:

  • CNQ has obviously benefitted big time from increased oil prices the last few years. This likely isn’t sustainable over the long term.
  • ATD has been an earnings beast given that they’re a retail stock built for steady long-term growth. There’s a reason why this is Mike’s favourite stock.
  • EMA, SJ, NA, BN, and FTS have the earnings growth to support their aggressive dividend growth policies.
  • CNR, TD, and Telus, all bear closer scrutiny. Higher interest rates and large capital expenditure costs have weighed on the earnings of CNR and Telus over the past few years. Those expenses should go down, and the assets should continue to grow earnings – but they’re definitely on my “close watch” list.
  • TD is another story entirely, and despite their short term earnings missteps (which are substantial), I simply believe their competitive moat in Canada’s banking oligopoly, as well as their conservative payout ratio give me reason to delay panic… for now. As interest rates come down, TD will need to prove that they can increase earnings sooner rather than later.

2024 Canadian Dividend Update

As we flip the page to a new year and update our Canadian dividend stocks for 2024, the most pressing consideration is obviously where interest rates are headed. The truth is that obviously interest rate moves are incredibly hard to predict, but the general consensus seems to be that reduced inflation and increased economic pain will put pressure on the Bank of Canada to lower rates in 2024.

The real questions are:

How many interest rate decreases will we see?

How fast will we see them?

The lower interest rates get, the less incentives there are for risk-averse investors to buy GICs and bonds, and the closer we get to the 2021 market where cash-flowing dividend stocks were very popular.

The bottom line is that the situation will change sooner or later, and historically, this is a great time to load up on stocks that let you sleep easy at night.  

While some investors might be tempted to shift towards more fixed income products, and away from dividend stocks, you just have to look at dividend growth records of these companies to realize that these corporate behemoths will continue to find a way to protect profit margins and reward shareholders.

I love the value of Canadian bank stocks even more after last quarter’s positive earnings news. The only downside is that the market really liked the earnings reports as well, as Canada’s banks ended the year on a strong run.

All six of Canada’s major banks continue to enjoy the benefits of a great deposits vs lending interest differential, and so far appear to be doing fairly well at controlling operating costs given the inflationary environment. While National Bank is my favourite, I think TD is very attractively valued right now as well, and is buying back stock at unprecedented levels.

Bank

Price

EPS 5yr AGR

2017 Dividend

2021 Dividend

2023 Dividend

Payout Ratio

BMO.TO

126.43

-7.01%

$0.88

$1.06

$1.51

102.83%

NA.TO

99.73

9.57%

$0.56

$0.71

$1.06

42.05%

TD.TO

80.49

-1.40%

$0.55

$0.79

$1.02

68.32%

RY.TO

132.20

4.66%

$0.83

$1.08

$1.38

50.90%

BNS.TO

62.91

-3.26%

$0.76

$0.90

$1.06

71.56%

CM.TO

61.70

-2.40%

$1.27

$1.46

$0.90

66.60%

I Survived Coronavirus Sign Or Stamp

With payout ratios like the ones above, combined with those really solid Earnings Per Share numbers – we remain strong in our belief that there are no better options for investors who want stable long-term growth combined with free cash flow. The short video below describes exactly why we’re so confident in Canadian banks right now.

With labour costs still seeing pretty high inflationary effects, it’s more apparent than ever that companies with solid balance sheets and oligopoly-driven moat stocks are the smart long-term play. Companies that can pass along those inflation-fuelled rises in costs have historically outperformed during heavy inflation cycles.  

Our list of top Canadian inflation stocks explains exactly which companies we believe are best positioned in order to pass along the inevitable price increases and increased costs that will come along in 2024.

Of course we remain committed to our long-term strategy of balancing EPS with a company’s ability to grow its dividend, in order to allocate our personal dividend nest egg.  

Afterall, the only thing better than a high dividend yield today, is a much larger (and increasing) one tomorrow!

Check out our in-depth Dividend Stocks Rock Review for a deeper dive on just why we trust the service so much, and more details on our exclusive promo offer code: MDJ33


Rogers, Bell, Telus Updates

The inclusion of Telus (T) in our Top 10 Canadian Dividend Growth Stocks chart obviously indicates that we’re big fans of the Canadian telecommunications sector. Given that Rogers (RCI) just finalized their takeover of Shaw, the deck is now even more stacked in this oligopoly’s favour.

That said, 2023 was obviously a really rough year for these companies. Due to rising interest costs in the debt-intensive industry, as well as decreased cash flow due to capital expenditures (putting 5G fiber in ground) profit margins were not as high as inventors wanted to see. Oddly enough, I think these negative sentiments will lead to outperformance in 2024 as there is a lot of room to bounce back.

The three large telecommunications companies (Telus, Bell, and Rogers) have a stranglehold on the very profitable Canadian market. While the three companies are not noted for aggressive growth plans, the overall growth of the Canadian population should ensure stable growth for the foreseeable future.

Name

Ticker

Price

Dividend Yield

Payout Ratio

P/E

Market Cap

Telus

T.TO

23.84

6.20%

117.59%

43.01

34.88B

BCE Inc.

BCE.TO

53.23

7.07%

126.95%

21.85

48.56B

Rogers Communications Inc

RCI.B.TO

63.66

3.16%

124.86%

38.67

33.78B

My Top Canadian Dividend Stock Recommendations

Sorted in order of dividend streak:


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

  • 4.46% Dividend Yield
  • 6.54% 5 Year Revenue Growth
  • 5.78% 5 Year Dividend Growth
  • 74.83% Payout Ratio
  • 17.10 P/E

Investment Thesis:

Fortis invested aggressively over the past few years, resulting in strong and solid growth from its core business. An investor can expect FTS’ revenues to continue to grow as it continues to expand. 

Bolstered by its Canadian based businesses, the company has generated sustainable cash flows leading to nearly five decades of dividend payments. The company has a five-year capital investment plan of approximately $20 billion over the period of 2022 through to 2026. Only 33% of its CAPEX plan will be financed through debt, while 61% will come from cash from operations. 

Chances are that most of its acquisitions will happen in the US (which I’m a fan of at the moment). We also like the company’s goal of increasing its exposure to renewable energy from 2% of its assets in 2019 to 7% in 2035. The recent market downtrend offers a great entry point at the current price level.

Dividend Growth Perspective:

Management increased its dividend by 6% like clockwork for the past 5 years and has declared that it expects to increase dividends by 6% annually until 2025. We like it when companies show motivation for growth through acquisitions and reward shareholders at the same time. 

After all, Fortis is among the rare Canadian companies who can claim to have increased their dividend for 49 consecutive years. Fortis is a great example of a “sleep well at night (SWAN)” stock.

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

  • 1.93% Dividend Yield
  • 3.28% 5 Year Revenue Growth
  • 11.67% 5 Year Dividend Growth
  • 36.82% Payout Ratio
  • 20.45P/E

Investment Thesis:

CNR has been known for being the “best-in-class” for operating ratios for many years. CNR has continuously worked on improving its margins and was among the first to do so. Today, peers have caught up and all railroads are managed in the same way. CNR also owns unmatched quality railroads assets. 

It has a very strong economic moat as railways are virtually impossible to replicate so we can therefore count on increasing cash flows each year. Plus, there isn’t any more efficient way to transport commodities than by train. 

The good thing about CNR is that an investor can always wait for a down cycle to make an investment. We can often spot a good occasion around the corner since we see railroads as attractive investments. 

Finally, the cancellation of the Keystone XL pipeline will drive demand for oil transport via railroads and CNR has benefitted. Management is being challenged, and we should see more growth emerging from this challenging period.

Dividend Growth Perspective:

Railroad maintenance is capital intensive and could adversely affect CNR in the future. It is a difficult balance to obtain an efficient operating ratio and well-maintained railroads. Continuous (and substantial) reinvestments are required to maintain its network. 

However, CNR continues to boast one of the best operating ratios in the industry. CNR’s growth could also be negatively impacted from time to time as it depends on Canadian resource markets. When the demand is low for oil, forest, or grain products, demand for CNR’s services will obviously slow accordingly. 

We saw how quickly the winds can shift the last couple of years. For example, the pandemic caused a slowdown in weekly rail traffic of about 10% over the summer of 2020. When the oil price is low, trucking steers some business away from railroads. CNR is a captive of its best assets since you can’t move railroads!

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

  • 4.70% Dividend Yield
  • 21.95% 5 Year Revenue Growth
  • 23.03% 5 Year Dividend Growth
  • 47.32% Payout Ratio
  • 13.25P/E

Investment Thesis:

In a world where the West Texas Intermediate (WTI) trades at $75+ per barrel, CNQ is a terrific investment (here is your cue since the WTI is trading above $70 lately!). It is sitting on a large asset of non-exploited oilsands and reaches its breakeven point at a WTI of $35. 

What cools our enthusiasm is the strange direction oil has taken along with the fact that oilsands are not exactly environmentally friendly. Many countries are looking at producing greener energy and electric cars. This could slow CNQ’s ambitions for the long term. 

However, CNQ is very well positioned to surf any oil booms. The stock price has more than doubled in value since the fall of 2020. It has previously invested very heavily, and it is now generating higher free cash flow because of past capital spending.

CNQ exhibited resilience in 2020, and this merits a star in their book! If you are looking for a long-term play in the oil & gas industry, CNQ appears at the top of our list at DSR.

Dividend Growth Perspective:

On top of an impressive dividend growth streak of over 20 years, CNQ has recently shifted gears with highly generous dividend increases (28% at the beginning of the 2022, a special dividend, and then another increase of 13% in late 2022!). 

CNQ has proven the resilience of its business model and confirmed its ability to be a strong dividend grower. This is truly impressive. Now that the oil market has strengthened, CNQ should be able to generate healthy cash flows for years to come.

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

  • 6.28% Dividend Yield
  • 7.25% 5 Year Revenue Growth
  • 6.73% 5 Year Dividend Growth
  • 251.01% Payout Ratio
  • 41.50 P/E

Investment Thesis:

Telus has grown its revenues, earnings, and dividend payouts on a very consistent basis. Telus is very strong in the wireless industry and is now tackling other growth vectors such as internet and television services. 

The company has the best customer service in the wireless industry as defined by their low churn rate. It uses its core business to cross-sell its wireline services. 

The company is particularly strong in Western Canada. Telus is well-positioned to surf the 5G technology tailwind. Finally, Telus looks to original (and profitable) ways to diversify its business. Telus Health, Telus Agriculture and Telus International (artificial intelligence) (TIXT.TO) are small, but emerging divisions that should lead to more growth going forward.

Dividend Growth Perspective:

This Canadian Aristocrat is by far the industry’s best dividend payer. Telus has a high cash payout ratio as it puts more cash into investments and capital expenditures. 

Capital expenditures are regularly taking away significant amounts of cash due to their massive investment in broadband infrastructure and network enhancement. Such investments are crucial in this business. Telus fills the cash flow gap with financing for now. 

At the same time, Telus continues to increase its dividend twice a year, exhibiting strong confidence from management. You can expect a mid-single digit increase year after year.

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

  • 1.15% Dividend Yield
  • 10.20% 5 Year Revenue Growth
  • 12.70% 5 Year Dividend Growth
  • 20.33% Payout Ratio
  • 15.28 P/E

Investment Thesis:

With its main customers being utilities and railroads, the company will continue to obtain sizable orders and get paid. SJ’s revenue surged between 2017 and 2021 because the demand for its products was strong from both sides of the border. The business has slowed since the second half of 2021, but SJ continues to grow.

In 2023, the company reported impressive numbers as demand for infrastructure products surged. Management recently announced they were looking for more acquisition targets. With 15 facilities in Canada and 25 in the USA, the company is geographically diversified.

The company has proven to be a defensive pick during the pandemic. The “lumber COVID-hype” is over, but SJ remains a solid business and benefits from multiple growth vectors. While residential construction may slow down due to higher interest rates, the need for more infrastructure and major projects continue to drive sales higher.

Management mentioned they were seeking acquisition targets, which is music to my ears given their past success in integrating acquisitions.

Dividend Growth Perspective:

SJ’s dividend has almost doubled over the past five years, yet the company exhibits a very low payout ratio. The latest dividend increases were more than generous (going from $0.15/share to $0.18/share in 2021 and then to $0.20/share in 2022, and now to $0.23/share in 2023), so management understands how to balance substantial dividend increases with growth.

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

  • 5.93% Dividend Yield
  • 4.04% 5 Year Revenue Growth
  • 4.66% 5 Year Dividend Growth
  • 75.03% Payout Ratio
  • 11.20 P/E

Investment Thesis:

Emera is an interesting utility with a solid core business established on both sides of the border. EMA now has $32 billion in assets and will generate annual revenues of about $6 billion. It is well established in Nova Scotia, Florida, and four Caribbean countries. 

This utility is counting on several green projects consisting of both hydroelectric and solar plants. Between 2022 and 2025, management expects to invest $8.4 to $9.4B in new projects to drive additional growth. These investments decrease the risk of future regulations affecting its business as the world is slowly making the shift toward greener energy sources. 

Most of its CAPEX plan (about 70%) will be deployed in Florida, where Emera is already well-established. In general, Florida offers a highly constructive regulatory environment; in other words, EMA shouldn’t have any problems raising rates. This is a “sleep well at night” (SWAN) investment.

Dividend Growth Perspective:

Emera has been increasing its dividend payments each year for over a decade. With the purchase of TECO, energy management intends to uphold this tradition. The company forecasts a 4-5% dividend growth rate through to 2025 while targeting a payout ratio of 70-75%. 

At a 4%+ dividend yield, this is a keeper for several years. Don’t be fooled by the high payout ratio as the adjusted earnings exhibit a payout ratio of approximately 80%, including recent dividend growth. This is the type of company that fits perfectly in a retirement portfolio.

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

  • 4.09% Dividend Yield
  • 7.32% 5 Year Revenue Growth
  • 10.28% 5 Year Dividend Growth
  • 42.05% Payout Ratio
  • 11.06 P/E

Investment Thesis:

My personal #1 pick for 2022 and 2023!

NA has targeted capital markets and wealth management to support its growth. Private Banking 1859 has become a serious player in that arena. The bank even opened private banking branches in Western Canada to capture additional growth. 

Since NA is heavily concentrated in Quebec, it concluded deals to provide credit to investment and insurance firms under the Power Corp. (POW). The stock has outperformed the Big 5 for the past decade as it has shown strong results. 

National Bank has been more flexible and proactive in many growth areas such as capital markets and wealth management. Currently, NA is seeking additional growth vectors by investing in emerging markets such as Cambodia (ABA bank) and the US through Credigy.

We wonder if it can achieve more success than BNS on international grounds. It seems like they may have found the right formula to do so! This is one of the rare Canadian stocks having a near-perfect dividend triangle.

Dividend Growth Perspective:

National Bank is still highly dependent on Quebec’s economy. As a hyper-regional bank, NA is more vulnerable to local economic events. To date, this has not affected the bank significantly, but we advise to keep track of its provisions for credit losses. 

Recessions and rising interest rates could also affect the bank’s debt portfolio. Capital markets’ revenues are also highly volatile. NA could experience a bad quarter if the stock market becomes bearish. 

Overall, the bank has performed very well, but it usually takes a little more risk to find growth vectors (such as the ABA bank investment and capital markets). So far it has paid off, but it does not mean it will always be this way in the future. Keep in mind that investments like the one in Cambodia are unpredictable and could shift very fast.

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

  • 0.85% Dividend Yield
  • 7.78% 5 Year Revenue Growth
  • 22.42% 5 Year Dividend Growth
  • 12.22% Payout Ratio
  • 19.55 P/E

Investment Thesis:

In the long-term, dividend payouts should grow in the double digits, and investors should see strong stock price growth. ATD’s potential is directly linked to its capacity to acquire and integrate additional convenience stores.

 Management has proven its ability to pay the right price and generate synergies for each acquisition. ATD exhibits a solid combination of the dividend triangle: revenue, EPS, and strong dividend growth. 

The company counts on multiple organic growth vectors such as Fresh Food Fast, pricing & promotion, assortment, cost optimization and network development.  It has also proven that it has anticipated the shift to electric, and is ready to profit from that model as well.

Dividend Growth Perspective:

In the long-term, dividend payouts should grow in the double digits, and investors should see strong stock price growth. 

ATD’s potential is directly linked to its capacity to acquire and integrate additional convenience stores. Management has proven its ability to pay the right price and generate synergies for each acquisition. ATD exhibits a solid combination of the dividend triangle: revenue, EPS, and strong dividend growth. 

The company counts on multiple organic growth vectors such as Fresh Food Fast, pricing & promotion, assortment, cost optimization and network development.

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

  • 5.05% Dividend Yield
  • 6.55% 5 Year Revenue Growth
  • 8.03% 5 Year Dividend Growth
  • 68.32% Payout Ratio
  • 14.44 P/E

Investment Thesis:

TD had a tumultuous 2023, and negative newspaper headlines definitely played a part in driving down the value of this stock. That beat up stock price is why I like the value in 2024. Long-term investors know that the bank enjoys number one or two market share positions for most key products in the Canadian retail segment.

In addition to Canadian retail though, what I really like about TD is that a third of its business comes from the U.S., including a 13% stake in Charles Schwab from their TD brokerage merger back in the day.

I don’t think the Canadian banking sector is going to get hurt nearly as badly as people are predicting due to a slowing economy, and the US has looked more and more like an economic juggernaut lately.

Dividend Growth Perspective:

TD is a Canadian dividend aristocrat (which permits them to have a “pause” in the dividend increase streak). TD shareholders were lucky enough to enjoy a dividend increase in early 2020 (+6.8%), right before regulators forced a break in dividend growth.

In 2021, the bank rewarded investors with a 12.7% dividend increase. It returned with a more regular increase in 2022 (+7.8%). In 2023, TD announced a 6.25% dividend increase at the end of the year.

Going forward, you can expect a mid-single-digit dividend increase as payout ratios are quite low and TD is well capitalized. (That’s a fun way of saying that because they got out of a potentially-bad US acquisition of First Horizon Bank, they have a ton of cash sitting in their bank account. Some of the cash will likely go to dividend raises and stock buybacks.)

Brookfield Corp – 11 Years of Dividend Growth

  • 0.79% Dividend Yield
  • 11.97% 5 Year Revenue Growth
  • -6.13% 5 Year Dividend Growth
  • 45.27% Payout Ratio
  • 66.27 P/E

Investment Thesis:

I’ve been a bit tentative when it comes to the Brookfield family of companies, as it can be quite difficult to really dig into their quarterly statements due to their size and complexity. That said, their past results and unique corporate structure have ensured access to billions of dollars in liquidity to finance its projects.

Brookfield is estimating alternative allocation to increase to 60% by 2030, from 25% today, so it’s definitely a lower-risk way to make a renewables play. It’s a huge company that is present in many countries demonstrating high growth potential for years to come and a diversified business foundation. Over the last few years, BN has witnessed an increase in both the number and size of average client commitments. 

Brookfield Corporation will not only do the asset-light manager’s job (strategy + earning fees on AUM), but it will also contribute with its own assets. Therefore, it can benefit from its strategies by selling those assets at a profit in the future.

Asset recycling happens when a company sells assets it deems to be at a high value (e.g. good time to sell) to reallocate the proceeds into new projects or undervalued assets. This is the classic “buy low, sell high” concept.

Basically, Brookfield is a classic example of “corporate synergy” where they can profit at multiple points in a project’s development – all while offering unique expertise and simple all-in-one packaging to potential clients. At the current price-to-book of 1.35x, this looks like a great bet for 2024, but of course, it might take slightly longer than one year for BN to pay off to the degree I think it will.

Dividend Growth Perspective:

After the spin-off of the original Brookfield Asset Management (BAM), it has become clear that BN is a relatively low-yield (less than 1%) stock with great growth expectations. We expect this dividend to increase each year and continue the aggressive dividend growth policy. However, if you are looking for a more generous yield, the original (BAM) is the better option.

BN has the advantage of owning a stake in various assets (across the Brookfield family) while BAM has the advantage of simply managing the money (and earning revenue on a fee charged on the assets under management).

Canadian Dividend Stocks with 10 Years of Dividend Increases

The last few years have seen intense change and turmoil. First the pandemic caused widespread panic and made folks sell off their portfolios. Then we had meme-stock mania and a small bubble in certain markets. Finally, we’ve been dealing with inflationary effects over the last 18 months that have increased interest rates and led to smaller overall margins due to increased debt costs.

Throughout all of this, there are 38 companies in Canada that have just boringly raised their dividends year after year. Click below for the list of Canadian dividend growth stocks that weren’t shaken by the pandemic, bubbles, panic, inflation, or interest rates.

Canada’s 38 Dividend Growth Stocks

(Ten Years or More Dividend Increases)

Click below to find all the new additions to the previous top Canadian stocks. The following have been handpicked for their ability to face the economic lockdown and thrive going forward.


Dividend Investing in Canada – Frequently Asked Questions

“How do dividend stocks work?”

Simply put, dividends are the payment that businesses make to their owners after expenses have been paid for during a specific time period.  Some companies produce yearly dividends, but most pay “quarterly” (every three months). 

Most dividend-heavy companies (certainly all of the Canadian dividend stocks on the list above) announce their dividend intentions for the next year, and then split up their after-tax profit between dividends and retained earnings. The retained earnings are put back into the company in one form or another, while dividends are simply paid out to shareholders. 

Companies can “slash” or cut their dividend whenever they wish – there is no law saying they must pay out a certain percentage of profit or anything like that. Consequently, there is often an emphasis on long-time dividend growth stocks that have a proven track record of not only paying out dividends, but increasing them as time goes on, and thus rewarding shareholders.

“How is a dividend being paid?”

Dividends are paid to shareholders. They are paid out on a per-share basis, and for each share you own as an investor, you get paid a certain amount. This amount is most commonly expressed a percentage of the current price of a stock. 

So for example, you might hear, “Enbridge currently has a dividend ratio of 8%.” This simply means that if Enbridge’s current stock price was $40, (.08 x 40 = $3.20) an investor would expect to earn $3.20 in dividends from Enbridge for the upcoming year. That $3.20 would likely come to them in four separate installments of $0.80.

Companies can also announce “Special Dividends” at any time. In this situation, there is a unique one-time payout to shareholders.

In order to qualify for a dividend you must purchase a share before the “ex-dividend date” – which is announced by each company fairly far in advance.

“How to buy dividend stocks in Canada?”

While you can still buy dividend stocks through the old fashioned telephone brokerage systems, the vast majority of investors now purchase dividends as DIY investors using their discount brokerage accounts. 

At Million Dollar Journey, we have put together dozens of reviews and comparisons pieces destined to provide our readers with insights regarding the best Canadian broker for long term investing.

Read about the most popular brokers like Qtrade and Questrade as well as robo-advisors like Wealthsimple and learn how to maximize your savings in that regard.

The other common way to get portfolio exposure to Canada’s best dividend stocks is through dividend-ETFs on the Toronto Stock Exchange (TSX).  Using a dividend ETF provides your investment dollar with instant diversification to companies that have a strong dividend profile.

“When to buy dividend stocks?”

The honest answer is: “Any time you have the investing funds available to do so”.  There are many folks out there who think that they can time the market and purchase stocks at the absolute perfect time.  Despite that belief, there is very little evidence that this is true. 

It’s also quite difficult to time when stocks are nearing the peak.  Consequently, the most successful dividend investors that I’ve seen are folks who stick to a pre-planned strategy and simply invest their surplus funds as soon as they are able, into shares of dividend-payers that they have done their homework on and anticipate holding for the long term.

“When is the time to sell dividend stocks?”

If you are like Warren Buffett and buy stocks that, “You want to hold forever” – then the answer to when you should sell your dividend stocks is: Never!  In practice, there are a few times over the past 15+ years when companies have significantly cut their dividend, and to me, this is a flashing red sign that something is majorly wrong with the company.

Cutting a dividend is usually seen as a last resort because it has such a dramatic effect on the stock price. Major shareholders hate the idea of sacrificing that cashflow – so when the decision is made, I usually sit up and take notice. 

That said, I prefer to do my homework before purchasing any single stock. Consequently, I almost never sell my dividend stocks, because I am quite confident in their long-term growth.  You can read my articles about Canadian dividend kings and beating the TSX for some specific suggestions.

The statistics around trying to jump in and out of the market just aren’t very good, and it really pays to be confident in your reasons for choosing a stock – so that you can not only hang on to your shares during tough times in the market – but also “Be fearful when others are greedy” and buy more shares of your favourite dividend stocks when prices are down.

“What are the best dividend stocks?”

Well, clearly if you’ve read this far into our article you know what our choices are for best Canadian dividend stocks!  After years of personal dividend investing and research, I’ve come to the conclusion that the Dividend Stocks Rock way of judging dividend stocks by their “Dividend Triangle” is the best long-term way to value solid Canadian companies.  The main idea is to equally weight a company’s overall revenues, their Earnings-Per-Share (EPS), and their commitment to dividend growth over the long term.

I used to simply look at dividend yield as the “be-all and end-all” of dividend investing, but Mike has convinced me over the years that your long-term dividend payouts and capital gains are more secure by focusing on the three metrics of revenues, earnings, and dividend growth.

“Are there tax benefits for dividend stock investing in Canada?”

Gaining income from dividend stocks is one of the most tax-efficient ways that you can put your 

money to work for you.  This is especially true at lower income levels (such as those that many retirees typically account for at the end of the year) when the dividend tax credit really shines.

If you’ve never heard of the dividend tax credit or the dividend gross up, here’s the basic idea:

1) There are actually two different dividend tax credits: the Provincial Dividend Tax Credit and the Federal Dividend Tax Credit

2) The reason for these tax credits is rooted in the idea of tax fairness.  Because businesses pay corporate taxes before money is disbursed to shareholders, there is a process where your dividend income is “grossed up” and then a tax credit applied.

3) What this so-called “gross up + tax credit” often looks like in practice is that your income gets artificially inflated, but then a very generous amount of your taxes owing is cancelled by the government.

Here’s an example:

If I owned 1,000 shares of Enbridge (ENB) during 2020, and earned $3.20 for each share, then my dividend income would be $3,200.

Now, depending on what other income that I had, I would be placed in a specific tax bracket.  Obviously I might have dividend income from other stocks, I might also have worked for a living and have earned income.

If I made $60,000 in earned income, and Enbridge was the only stock that I owned, then the following calculation would be made for my dividend income:

$60,000 of earned income would be taxed by the federal government at a rate of 0% on the first $13,000, then a rate of 15-20.5% on the rest.  My $3,200 in Enbridge dividends would only be charged a tax rate of 7.56% after the dividend gross up and dividend tax credit were applied.

Looking at the provincial side of the equation.  If I lived in Ontario, my $60,000 of earned income would be taxed at a rate of 0% on the first $10,000, then a rate of 20-30% on the rest.  My $3,200 in Enbridge dividends would only be charged a tax rate of 

For many retirees, who no longer earn a paycheque, it’s possible to actually experience a negative tax rate on the first $30,000 or so of dividend payments – less than a 0% tax rate!

Most Recent News on Canadian Dividend Stocks

The truth is that we’re in an unprecedented time when it comes to the aftershocks of aggressive fiscal and monetary policy. Interest rate increases appear to be working, and inflation has plummeted – but I would be very suspicious of anyone who tells you that they are 100% sure they know what the future holds in terms of central bank decisions.

There’s no doubt that all of the talk of “higher for longer” interest rates affected several of our top Canadian dividend stocks in 2024. When you can get an ultra-safe risk-free GIC [See our Best GIC Rates In Canada] with an automatic 5.60% return, the risk-reward balance of Canada’s utilities, pipelines, or telecommunications companies has been significantly altered.

Now, that said, we have to keep things in perspective. It’s not like 2024 was a bad year for dividend stocks. Canadian dividend ETFs show gains in the 4-8% range, plus a solid 4.5% dividend yield. 

That’s pretty solid!

It just looks low next to the supercharged returns of tech stocks like Shopify or Constellation Software. But remember, dividend stocks didn’t have that crazy down year in 2022 to anywhere near the same degree that tech stocks did either.

It’s important to remember that these companies we are recommending have durable long-term competitive advantages. 

For example, look how hard it has been to get a single pipeline built – along a previously-existing route – in BC. They aren’t building more pipelines, telecoms, utilities, or major banks in Canada. Those profit margins might be hindered a bit by higher interest costs, but they’re still very sustainable.

As a sidenote, I think that the rush to buy the US Dollar (and its appreciation against the Canadian Dollar) is actually really good for the Canadian economy.

What many people don’t realize is that while a weakening currency vs our most important trading partner (by far) is kind of a drag when it comes to planning holidays or importing goods, it’s incredibly valuable to our companies. Canadian goods and services are effectively getting priced at a discount right now for the largest consumer market on the planet!

Canadian energy companies, plus companies like Nutrien, Cameco, gold miners, and agricultural producers, have benefited from increased demand for their products. I don’t see this stopping any time soon, but who knows what mercurial European leaders will do in the current extreme circumstances.

As I mentioned earlier in this article, the cutting of interest rates down to the 3.5% range over the next 12-18 months will be very beneficial for Canadian dividend stocks. Of course, inflation could turn out to be stickier than we anticipate, but for now, it looks like a good bet that the Bank of Canada will have to make some cuts sooner rather than later.

As always, I place a lot of importance on dividend growth stocks, their overall revenues, and effective management that builds value. I remain rock-solid in my personal conviction for my portfolio. The advantages the companies hold are too durable, the current valuations quite reasonable, and they have simply proven themselves over and over again in all market conditions.

My Recent Dividend Track Record

I started making public dividend stock beginning in 2021. That year, I predicted that Canada’s midstream companies were getting way too much bad press and that their value was being driven down by the underlying price of commodities like oil and natural gas. 

We thought there was a market inefficiency there as the pipelines only have a loose relationship between commodity prices and their profit margin. Our top Canadian dividend stock pick was Enbridge, and it paid off quite well for us.  We solid about 10% before the stock hit the top and haven’t added to our position since. It’s not that Enbridge is a bad company, I just think it’s not worth the overweight position given the amount of debt it has currently built up.

More recently, my Canadian dividend kings pick for BOTH 2022 and 2023 was National Bank, and I’ve been very happy with its overall performance.

The 6th biggest bank in Canada continues to be a stock with a very low floor (thanks to a very solid balance sheet and massive competitive advantage in Quebec), with a relatively high ceiling versus Canada’s other banks due its small market cap. Management has shown a commitment to rewarding shareholders over the long term and I don’t see any reason to believe that commitment will change given their most recent earnings report.

I’m stacking up well against the benchmarks, and I’m even beating my dividend buddy Mike Heroux for a couple of his portfolios (and admittedly, losing to him on several more… I might have to start riding his coattails even more). See below for his publicly-posted track record over the last decade:

dsr portfolio performance

Further Research on Top Canadian Dividend Stocks

While I focused on Canadian dividend growth stocks in this article, when I want information on anything dividend-related (including US dividend stocks and undervalued dividend stocks) I also use the Dividend Stocks Rock (DSR) service by Mike Heroux. 

Mike is a longtime Canadian writer who started at the same time as myself. He is a CFA and former financial adviser. In the past I’ve subscribed to premium Globe and Mail channels, as well as popular investment newsletters such as Morningstar – Mike’s final product is simply the best

These days he specializes in not only researching Canada’s best dividend stocks, but also communicating the results of that research in creative, easy-to-understand ways.

FT

FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
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RandoC
5 months ago

Thanks FT, Particularly enjoyed “Most recent news “

John
6 months ago

Any thoughts on what government policy towards transitioning from natural gas to electricity will do to companies like Fortis? (and to a lesser extent, pipelines and other oil utilities?) I’m wondering if they may no longer have as solid a future as once believed.

Vic's Garage
1 year ago

Does Algonquin count as a eligable dividend for a non registered account? It pays its distributions in USD no? So is there the 15% withholding tax? Wondering about using it in a smith manoeuvre

Editor
Kyle Prevost
1 year ago
Reply to  Vic's Garage

No withholding tax. Buy it on the TSX and you’re good to go!

Nav
2 years ago

how does the pe ratio play ? what should we be looking at in a pe ratio

jason
2 years ago

Thank you so much for the list ! what are your thoughts in regards to BCE and Telus payout ratio you think the dividends are safe even though they both are paying aprox 130% ?

Freedom45
3 years ago

New to this board. Just curious about the energy space further to Paul N and FT comments in Sept. I got burned in the downturn with energy (ie opportunity cost of holding a under-performing sector only to be hit by the coronavirus cyclical downturn that may last years). There is no question that the sector was cheap before the downturn, but thanks to the green folks, ESG investors, and the Canadian government, I am not sure that in the long term a proper multiple will ever return. I have no doubt that earnings and cash flow will return, as well as probably $100 oil due to chronic under investment, but it appears to me that these stocks – even SU and CNQ – are no longer buy and hold investments, but have become more like trades on the hopes of a large and quick spike in oil price. I am disappointed as I disagree with investors buying up cash-burning Tesla shares at huge multiples while selling Canadian energy stocks that were bringing in cash hand over fist, but seems to me that is unfortunately the way investing is going. Ultimately the sentiment could spread to TRP and ENB despite stable outlook (I still hold the pipelines though).

GYM
3 years ago

Great updated list. I recently bought some more Fortis myself.

For some reason, I thought Savaria was like a Cannabis company… turns out it’s exactly the opposite of ‘sexy’ haha!

Abad
4 years ago

FT, will you make a post about your BTTSX picks for 2020?

Editor
Kyle Prevost
4 years ago
Reply to  Abad

I know that FT is planning to do that one in a few months Abad!

Derek
4 years ago

where is BCE???? that’s been paying a nice dividend for years!!! not even a mention???

RICARDO
4 years ago
Reply to  Derek

I’ll second that. BCE is more expensive per share than T but pays a higher dividend so far. All the bloggers talk about compound interest well here is a case where the higher dividend payout can lead to higher compound purchases of equities.
Another one is IPL. Maybe a bit risky now because of their heartland project but none the less I have held them since 2003. Haven’t missed a dividend yet and have raided every year so far. My original purchase (2004) pays me 25% on COP

RICARDO

Paul N
4 years ago

I’m just curious about Suncor being on this list. Even back in 2007 the price was briefly higher than pricing in this month Sept 2019. So for 12 years, is just getting the quarterly dividend (now 4%) worth holding this stock for over that time? Just trying to understand the logic. It would have been better to just purchase more Emera, or even an ETF like XEI and take the 5% dividend (monthly distribution) and utilize the cash from it.