I originally started looking at the best Canadian dividend growth stocks back in 2013. As one of the most popular annual articles on the site, I’m proud to enlarge the list this year to include my top 25 Canadian dividend stocks for 2020.
I have included all the top 25 Canadian dividend stocks that have the longest track record of increasing their dividends. The longest streak as of January 2020 belongs to Canadian Utilities (CU.TO), while the 25th position is occupied by Intact Financial (IFC.TO). The list includes all of Canada’s Dividend All Stars, as well as all of the Canadian Dividend Aristocrats.
This list was constructed post-Covid market meltdown + quick snapback. It should be noted though that even when Earth-shaking events such as a pandemic happen, dividend stock investing is best approached over the long-term. Constantly jumping in and out of stock purchases is a good way to drive yourself crazy while costing yourself a lot of money!
Canadian Dividend Stocks as a Strategy
If you’ve been following Million Dollar Journey for a while, you’ll know that I’m a fan of dividend growth investing because it provides a dependable stream of increasing tax-efficient income. For those of you interested in this strategy as well, you can see an example through my leveraged dividend portfolio. In fact, growing a passive dividend income stream is my strategy for achieving financial freedom.
Two questions that I often get asked are: “What are my favorite dividend all star stocks?” and “What do I think are the absolute best dividend stocks for Canadians?”.
As a dividend growth investor, I like to invest in dividend paying companies that have a history of increasing their dividends, but the stocks also have to provide diversification within my portfolio. Unfortunately, the TSX has a limited number of stocks with a long dividend growth history. To see a list of my Top 10 dividend positions, keep reading below. These selections include companies showing a strong mix of revenue growth, earnings growth, and dividend growth. Thus making them excellent candidates to not only keep paying a dividend, but to grow that juicy payout each year.
New 2020 Picks for Best Canadian Dividend Stocks
Doing some background research for 2020, I dug up 25 Canadian dividend growth stocks with the longest histories of annual dividend increases. Usually, there is little change in the list because companies who have a mandate to pay increasing dividends tend to follow that pattern.
Sometimes, dividend companies get removed from the list because of three possible reasons:
1) A pause in dividend increases
2) A dividend cut/reduction
3) The company gets acquired
This time around, no companies were deleted, and I added three more!
- Cogeco Inc. (CGO.TO)
- Stella-Jones Inc (SJ.TO)
- Intact Financial Corp (IFC.TO)
Are Canada’s Dividend Stocks Applicable in an Economic Downturn?
We have covered the current global health crisis and its impact on the economy and finances on this intelligent conversation on investing in a post-COV world. The gist of what we believe is that you can’t catch the bottom of the markets or try to time them; going in and out of the markets is LIKELY to be less efficient than continued long-term investing.
The same logic applies to Canada’s dividend stocks – your best dividend stocks strategy may have a lower- or higher-return yield than it did yesterday, but over the LONG TERM it is tough to deny the track records of these stocks. Many of them have established ever-increasing dividend payouts through wars, economic collapses, and countless natural disasters.
The quick bounce back in the share prices of many of these companies reveals just how resilient their revenue streams are, and there are even substantial prospects for these companies with bullet-proof balance shoots to gobble up market share one chunk at a time, as smaller companies go out of business during this downturn.
2020 Best Canadian Dividend Stocks
This table contains much information about the best Canadian dividend stocks of 2020. It includes Ticker Name, Sector, Dividend, Streak, Dividend Yield, 5yr Revenue Growth, 5yr EPS Growth, 5yr Dividend Growth, Payout Ratio, and P/E. These are numbers are true for the article’s last update and isn’t being updated on a real-time basis.
|Ticker||Name||Sector||Dividend Streak||Dividend Yield||5yr Revenue Growth||5yr EPS Growth||5yr Dividend Growth||Payout Ratio||PE|
|CU.TO||Canadian Utilities Ltd||Utilities||47||4.30%||5.30%||-0.10%||10.15%||47.92%||10.86|
|TIH.TO||Toromont Industries Ltd||Industrials||30||1.53%||17.07%||14.06%||12.09%||28.97%||20.61|
|CWB.TO||Canadian Western Bank||Financial Services||27||3.44%||8.14%||2.40%||6.72%||39.43%||10.53|
|TRI.TO||Thomson Reuters Corp||Industrials||25||2.04%||-11.43%||111.39%||6.04%||19.42%||10.63|
|EMP.A.TO||Empire Co Ltd||Consumer Defensive||24||1.48%||3.71%||7.77%||4.88%||26.40%||17.92|
|IMO.TO||Imperial Oil Ltd||Energy||24||2.47%||1.33%||-2.94%||8.30%||22.14%||9.61|
|MRU.TO||Metro Inc||Consumer Defensive||24||1.48%||7.66%||10.47%||15.27%||27.95%||19.5|
|CNR.TO||Canadian National Railway Co||Industrials||24||1.81%||6.25%||13.69%||16.18%||33.26%||19.25|
|SAP.TO||Saputo Inc||Consumer Defensive||19||1.64%||7.90%||7.41%||7.80%||34.02%||21.02|
|CNQ.TO||Canadian Natural Resources Ltd||Energy||19||3.58%||4.42%||0.38%||18.44%||42.17%||12.37|
|TRP.TO||TC Energy Corp||Energy||19||4.18%||9.23%||10.13%||8.45%||46.58%||16.44|
|CCL.B.TO||CCL Industries Inc||Consumer Cyclical||18||1.21%||22.26%||34.27%||24.77%||23.37%||20.64|
|FTT.TO||Finning International Inc||Industrials||18||3.25%||0.70%||-6.59%||5.74%||53.44%||16.74|
|PLZ.UN.TO||Plaza Retail REIT||Real Estate||17||6.13%||4.59%||N/A||4.46%||63.89%||10.6|
|RBA.TO||Ritchie Bros Auctioneers Inc||Industrials||17||1.79%||25.80%||9.94%||11.77%||59.42%||35.23|
|SU.TO||Suncor Energy Inc||Energy||17||3.94%||-0.54%||-4.92%||14.55%||51.35%||13.51|
|CCA.TO||Cogeco Communications Inc||Communication Services||16||1.90%||3.67%||14.41%||11.84%||24.97%||13.62|
|T.TO||TELUS Corp||Communication Services||16||4.46%||4.45%||5.92%||9.08%||70.14%||17.56|
|CGO.TO||Cogeco Inc||Communication Services||15||1.80%||3.12%||16.94%||14.34%||19.40%||11.79|
|SJ.TO||Stella-Jones Inc||Basic Materials||14||1.47%||16.00%||8.12%||19.14%||23.92%||16.81|
|IFC.TO||Intact Financial Corp||Financial Services||13||2.16%||7.31%||9.09%||9.73%||61.08%||27.47|
My Top Canadian Dividend Stock Recommendations
Sorted in order of dividend streak:
My COVID-19 Best Dividend Stocks Recommendations
The year 2020 has been one of intense change and turmoil. The COVID-19 pandemic has forced us to review each company in our portfolio and review their business model. Some will survive and thrive, while others will have a hard time surviving this crisis. The point here is not to change my list, but to add more perspective now that we know more about the nature of the economic lockdown. Some companies are great, but they just don’t function well when their doors are closed!
Here are a few additions to the previous top Canadian stocks. The following have been handpicked for their ability to face the economic lockdown and thrive going forward.
A Concluding Look at Canada’s Dividend Growth Stocks Landscape in 2020
For me, I like dividend stocks with a yield above 2.5%, a payout ratio less than 80%, strong financials, and, of course, an established track record of dividend increases. Once I create a dividend stock watchlist, I wait for them to drop in price to reach a particular dividend yield (when to buy dividend stocks).
As previously mentioned, more due diligence is required before blindly buying companies with the longest history of dividend growth. For example, from the table above, there are some stocks with red flags such as companies with high payout ratios. The list of stocks in this article should be treated as a starting point for your research.
If you plan on implementing a long-term dividend investing strategy, we recommend signing up to our dividend newsletter, and taking in Mike Heroux’s free dividend webinar for the latest in Canadian dividend news.
As we look forward to 2020, remember that in order to be a successful dividend investor, one of the keys is to ignore the daily noise. Many of these Canadian Dividend Stocks are companies that have been around for an incredibly long time, and have long established histories of not only surviving ups and downs in the market, but continuing to pay solid dividends over those ups and downs!
I’m curious to see what everyone else thinks about the upcoming year. Are you a dividend growth investor? Which are your favorite Canadian Dividend All Star Stocks for 2020?