Before you select which type of dividend stock you would like to add to your portfolio, it’s important to do your research. Just like any other type of stock, there’s a risk when it comes to investing, and there’s no guarantee that you’ll earn any money, but research can help you avoid missing a great opportunity. That said, depending on which dividend stocks you choose, you’ll get paid out your dividends at different times.
How to Recognize a Good Dividend Stock
When it comes to choosing the right dividend stocks, there are some things that you want to look for that will indicate that the stock is the right choice. The first thing that you want to look at is the company’s annual growth from an earnings perspective as well as a dividend growth perspective. While a lot of companies do experience profitable times, a good choice for a dividend stock is one that shows consistent growth.
When looking to buy stocks, it’s important to look at the growth of the stock on the Canadian market as well as the benchmark. Stocks that have a really high growth tend to drop, and the stock price drops. Those stocks that have reasonable growth are the best for dividend stocks. They tend to hold their stock price and have high dividend yields.
On top of having a good profit margin, it’s best to invest in dividend stocks that have healthy cash flows. This is important because the company will need to pay dividends. Ideally, the company you’re investing in will have at least a 5-year record of paying dividends. You also want to steer away from a company that has a lot of debt. Once you find one you’re interested in, you can purchase it, and if you’re lucky, you’ll see the price slowly raise.
Best Dividend Stocks in Canada
With so many different dividend stocks to choose from in Canada to increase your dividend income as well as your passive income, there are a few that are considered to be better than the others. This list consists of Canadian energy companies, Canadian utilities companies, natural gas companies and other profitable corporations.
It’s important to keep in mind that these aren’t all the best dividend stocks in Canada, just a select few. We don’t include any of the Canadian retail companies, Canadian National Railway, Real Estate Investment Trusts and others that are on the Canadian market and could be included. We mainly focus on the other industries and those that remain in good standing for large periods of time, instead of putting the ones that occasionally toe the line.
Strathcona Resources (SCR)
Strathcona ResourLtd. LTD is one of the largest and fastest-growing oil producers. Their focus is on both thermal oil and enhanced oil recovery. In fact, their growth is based on their dedication to the development of long-life assets. Being a Canadian company, their operations are based in Alberta and Saskatchewan, and they were founded in 2009.
In terms of their stock, the current market value is $40.90, and their yearly range is $22.75-$44.74. The market capitalization of this stock is $8.57 billion, and the average volume is $87.58K. The P/E ratio is 7.97, and the dividend yield is 2.94%.
Brookfield Asset Management (BEPC)
Brookfield Asset Management specializes in alternative asset management and is headquartered in New York. They currently have over $1 trillion in assets under management and focus on infrastructure, renewable e, transition, private equity, real estate and credit.
In terms of the stock, on the Toronto Stock Exchange, it has a current market value of $41.69, and the yearly range is $23.73 – $45.10. The market cap is $7.507 billion, and the average volume is 1,074,369. This stock has no P/E ratio but has a forward dividend and yield of 3.66%.
Finning International (FTT)
Located in Vancouver, Canada, Finning International. Inc. is an industrial equipment dealer that specializes in Caterpillar heavy equipment products. They are involved in the selling, renting, as well as the parts and service of the equipment.
In terms of their stock, the current market value is $74.14, and the yearly range is $34.59 – $79.68. The market cap is $9.74 billion, and the average volume is $561.61K. It has a P/E ratio of $14.60 and a dividend yield of 1.63%.
Rogers Communications (RCI.B)
As one of the largest communications companies in the world, it’s no surprise that Rogers Communications is on this list. Since they recently acquired Shaw, they have gotten even larger. They offer cell services, home internet, cable, and more.
In terms of their stock, their current market value on the Toronto Stock Exchange is $53.96, and their yearly range is $32.42 – $56.15. The market cap is $$29.23 billion, and the average volume is $1.98 million. The P/E ratio is 4.33, and the dividend yield is 3.71%.
Birchcliff Energy (BIR)
Headquartered in Calgary, Alberta, Birchcliff Energy is considered to be an intermediate oil and gas company. They not only explore for oil and gas, but they are also involved in the development and production process. Not only can you purchase their stock, but they’re also involved in the S&P/TSX Composite Index.
Currently, the market value is $7.46, and the yearly range is $4.53 – $7.86. The market capitalization of this stock is $2.04 billion, and the average volume is $1.32 million. The P/E ratio is 28.00, and the dividend yield is 1.60%.
Peyto Exploration & Development (PEY)
Peyto Exploration & Development Corporation is located in Alberta, Canada and is known for being an explorer and producer of unconventional natural gas that is located in Alberta’s deep basin. They focus on cost structure and profitability, which separates them from other companies in the same industry. They’ve also been around for a while, since they were founded in 1997.
Currently, the market value of this stock is $21.97, and the year range is $14.57 – $22.57. The market cap of this stock is $44.4 billion, and the average volume is $1.05 million. The P/E ratio is 11.92, and the dividend yield is 6.01%.
Richelieu Hardware (RCH)
Another great option for a dividend stock is Richelieu Hardware. This company operates both in Canada and the US, and it sells a wide variety of hardware. They also see their own name-brand products, which are available in other stores as well. They were founded in 1968 and have 104 distribution centers throughout Canada and the US.
In terms of their stock, the current market value is $38.02, and the year range is $43.20. The market cap is $2.09 billion, and the average volume is $119.15k. The P/E ratio is 2,4.95, and the dividend yield is 1.61%.
Northland Power (NPI)
Northland Power is a global power producer that is located in Canada. It was founded in 1987 and is headquartered in Toronto. They develop, own and operate a wide range of different energy infrastructure assets.
In terms of their stock, the current market value is $16.24, and the year range is $16.13 – $25.99. The market cap is $4.25 billion, and the average volume is $1.59 million. The dividend yield is 7.9%.
Centerra Gold (CG)
Another company on this list that’s also involved in the mining industry is Centerra Gold. They currently operate two different gold mining operations, owhichf them being located in Canada. They were founded in 2002 and employ over 1,400 people.
In terms of their stock, the current market value is $17.42, and the year range is $7.72 – $17.97. The market cap is $3.52 billion, and the average volume is $1.03 million. The P/E ratio is 7.53, and the dividend yield is 1.61%.
Breakdown of Best Dividend Stocks
While we have gone over some of the top Canadian dividend stocks, there are certain quality stocks that fall into certain categories. Let’s take a look at some of these stocks and which are some of the best stock picks in each category.
Best Monthly Dividend Stock
While it isn’t listed here, one of the best monthly dividend stocks and overall top dividend stocks is Barrick Mining (ABX). Their current market value is $55.93, and the yearly range is $21.73 – $56.34. The market cap is $93.13 billion, and the average volume is $6.3 million. The P/E ratio is 18.78, and the dividend yield is 1.27%.
7.9 Dividend Stock
Due to the fact that market conditions are always changing, stocks that were once 7.9 are no longer 7.9. The Canadian stock that hovers around 7.9 is Atrium Mortgage Investment Corp. They have a current dividend yield of 8.14%. The current market value of their stock is $11.42, and the year range is $9.97 to $11.84. The market cap is $546.01 million and the average volume is $110.14 K. The P/E ratio is 10.95.
Highest Paying Dividend Stock
One of the current highest-paying dividend stocks that is popular among Canadian investors is Centerra Gold, which we’ve already covered. This is one of the best stocks where investors can earn funds without selling.
Best TFSA Stock
One of the many ways that investors choose to invest in dividend stocks is in Tax-Free Savings Accounts. Two of the most popular right now are Alaris Equity Partners Income Trust (AD.UN) and Granite REIT (GRT.UN). Both have decent dividends and are relatively affordable.
Best Long-Term Canadian Stock
One of the best long-term Canadian dividend stocks is the Royal Bank of Canada. However, with that in mind, there are plenty of other options available for long-term stocks. Here are just a few:
- Enghouse Systems (ENGH)
- Premium Brands (PBH)
- KP Tissue (KPT)
Best Canadian Dividend Stocks Under $20
While a good number of stocks that we’ve gone over are under $20, not all of them are. Also, we haven’t gone over all of the good dividend stocks that have a price of under $20. Here are a few more that we can add to the list that are affordable but also have a proven track record.
Telus Corp TSE:T
Telus is a large company that is located in Vancouver BC. The dividend yield is 9.16% which is considered a high yield, and they have a market cap of $28.10 Billion. The average volume is $6.68 million. The current price of their stock is $18.28.
BCE Inc (BCE.R)
BCE Inc, more commonly referred to as Bell Communication Inc, is a telecommunications and media company. With the BCE preferred series share R the dividend yield is 9.00% with a share price of $19.40. This company has a market capitalization of $30.28 billion and an average volume of $10.58K.
Things to Consider About Dividend Stocks
The stocks mentioned above are just some of the best options currently available in Canada and are all in Canadian dollars. If you’re looking to purchase in US dollars, then you can do so on the US exchanges. Also, due to the volatility of the stock market, this list is going to be different than the past five years as well as the next five years.
It’s also important to note that with all securities, you have to report your earnings on your income taxes. Whether you get paid every quarter or another time period, this still has to be reported. However, whether or not your investments in the sector are considered business income or capital gains will influence your income taxes. A tax professional can help you with this.
Due to the fact that a stocks exposure changes, it’s important to do a lot of research before you purchase. While a stock may seem steady, it could start rising or falling at any time. Research can help you find the right time to expand your portfolio, trade your stocks, or find a different position in the market. Since it fluctuates, this is key and makes following the trends easier. It also helps to create a more profitable portfolio.
