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 choosing the right dividend stocks, there are some things you want to look for that indicate the stock is the right choice. The first thing you want to look at is the company’s annual earnings and dividend growth. While many companies experience profitable periods, a good dividend stock shows consistent growth.
When buying stocks, it’s important to consider the stock’s growth on the Canadian market and its benchmark. Stocks with really high growth tend to drop, and their prices drop. Those stocks that have reasonable growth are the best for dividend stocks. They tend to hold their stock price and have high dividend yields.
In addition to a good profit margin, it’s best to invest in dividend stocks with 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 rise.
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 Canadian retail companies, Canadian National Railway, Real Estate Investment Trusts, or others that are on the Canadian market and could be included. We mainly focus on other industries and those that remain in good standing for long periods, rather than those 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 driven by their dedication to developing long-life assets. Being a Canadian company, their operations are based in Alberta and Saskatchewan, and they were founded in 2009.
Regarding their stock, the current market value is $48.49, and their yearly range is $25.79-$48.60. The market capitalization of this stock is $10.39 billion, and the average volume is $473.80K. The P/E ratio is 13.95, and the dividend yield is 2.47%.
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 energy, transition, private equity, real estate and credit.
In terms of the stock, on the Toronto Stock Exchange, it has a current market value of $36.32, with a yearly range of $27.72–$45.18. The market cap is $6.624 billion, and the average volume is 1,495,158. This stock has no P/E ratio but has a forward dividend and yield of 4.29%.
Finning International (FTT)
Located in Vancouver, Canada, Finning International. Inc. is an industrial equipment dealer specializing in Caterpillar heavy equipment. They are involved in the sale, rental, and parts and service of the equipment.
In terms of their stock, the current market value is $102.24, and the yearly range is $47.38 – $106.15. The market cap is $13.35 billion, and the average volume is $382.63K. It has a P/E ratio of 20.12 and a dividend yield of 1.27%.
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 $48.58, and their yearly range is $35.40 – $56.27. The market cap is $26.30 billion, and the average volume is $2.15 million. The P/E ratio is 3.74, and the dividend yield is 4.12%.
Birchcliff Energy (BIR)
Headquartered in Calgary, Alberta, Birchcliff Energy is an intermediate oil and gas company. They not only explore for oil and gas but are also involved in the development and production processes. Not only can you purchase their stock, but they’re also involved in the S&P/TSX Composite Index.
Currently, the market value is $6.59, and the yearly range is $5.68 – $8.19. The market capitalization of this stock is $1.82 billion, and the average volume is $1.72 million. The P/E ratio is 26.53, and the dividend yield is 1.82%.
Peyto Exploration & Development (PEY)
Peyto Exploration & Development Corporation is based in Alberta, Canada, and is known as an explorer and producer of unconventional natural gas 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 $26.79, and the year range is $17.92 – $29.22. The market cap of this stock is $5.49 billion, and the average volume is $878.48K. The P/E ratio is 11.48, and the dividend yield is 5.38%.
Richelieu Hardware (RCH)
Another great dividend stock is Richelieu Hardware. This company operates in both Canada and the US and 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 $38.82, and the year range is $38.37 – $39.22. The market cap is $2.13 billion, and the average volume is $90.79k. The P/E ratio is 2,4.87, and the dividend yield is 1.61%.
Northland Power (NPI)
Northland Power Corporation is a Canadian power producer. 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 $22.98, and the year range is $22.51 – $22.99. The market cap is $6.01 billion, and the average volume is $1.10 million. The dividend yield is 3.13%.
Centerra Gold (CG)
Another company on this list, also involved in the mining industry, is Centerra Gold. They currently operate two different gold mining operations, one of which is located in Canada. They were founded in 2002 and employ over 1,400 people.
In terms of their stock, the current market value is $23.50, and the year range is $8.88 – $28.97. The market cap is $4.69 billion, and the average volume is 780.25K. The P/E ratio is 5.51, and the dividend yield is 1.19%.
Breakdown of Best Dividend Stocks
While we have gone over some of the top Canadian dividend stocks, certain quality stocks 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 Exchange Income Corp (EIF). Their current market value is $106.74, and the yearly range is $55.98 – $111.oo. The market cap is $6.01 billion, and the average volume is $145.44 K. The P/E ratio is 31.78, and the dividend yield is 2.59%.
7.9 Dividend Stock
Because 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 7.95%. The current market value of their stock is $11.70, and the year range is $10.99 to $12.36. The market cap is $535.20 million, and the average volume is $ 110.14 K. The P/E ratio is 11.37.
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 for investors to earn income without selling.
Best TFSA Stock
One of the many ways investors invest in dividend stocks is through 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 the good dividend stocks trading under $20. Here are a few more we can add to the list that are affordable and have a proven track record.
Telus Corp TSE: T
Telus is a large company based in Vancouver,, BC. The dividend yield is 9.97%, which is considered a high yield, and they have a market cap of $26.22 Billion. The average volume is 7.30 million. The current price of their stock is $16.79.
BCE Inc (BCE.R)
BCE Inc., more commonly known as Bell Communications Inc., is a telecommunications and media company. With the BCE preferred series shar,e R, the dividend yield is 8.09% with a share price of $21.62. This company has a market capitalization of 30.51 billion and an average volume of 5.46K.
Dividend Reinvestment Plans in Canada Explained
A Dividend Reinvestment Plan, also known as a DRIP, is an automated program that uses either cash dividends or distributions that you get from your stocks or ETFs to purchase shares in the same company or fund. The idea is to build wealth through compound interest and dollar-cost averaging, without paying any trading commissions.
The Tax Differences Between Eligible and Non-Eligible Dividends
Depending on the type of dividend that you receive, you’re going to be taxed differently. This has a lot to do with the source of these dividends. Eligible dividends come from large public companies and private businesses, meaning that you get a higher dividend tax credit. Non-eligible dividends are paid by small Canadian-controlled private corporations.
With eligible dividends, the income is taxed at the general corporate rates and with non-eligible dividends, the income benefits from small business deductions. The gross-up rate for eligible dividends is 28%, while it’s only 15% for non-eligible dividends.
Safe Dividend Payout Ratios
When it comes to dividend payout ratios, the safe range is between 30-60% of the company’s net income or cash flow. This is considered the safe range because it can both return cash to shareholders and fund future growth. It can also handle economic downturns and maintain the dividend even when times are difficult.
The danger zone for payout ratios is 80% or higher. This ratio leaves very little room for error. Any earnings drops can force dividend cuts.
Ex-Dividend Dates, Record Dates and Payment Dates
When it comes to dividends, there are 3 key dates you need to know about. These are ex-dividend dates, record dates and payment dates. Here’s how they work.
Ex-Dividend Date: The cut-off date used to determine who will receive dividend shares. If you purchase dividend-paying Canadian stocks on or after their ex-dividend date, then you won’t receive any.
Record Date: The day the company prepares the official list of shareholders on its books. If you’re officially on the books by the end of the business day, then you’ll be able to receive dividends from Canadian dividend payers.
Payment Date: The day dividend funds are paid. These are either deposited into brokerage accounts or mailed out via cheque.
How Dividend Yields Change When Stock Prices Fall
When stock prices fall, the dividend yields automatically increase. The reason is that the dividend yield is calculated by dividing the annual dividend per share by the current stock price. When you’re purchasing a stock, it’s important to pay attention to this relationship.
A high dividend yield can be appealing to investors, but when the stock is usually plummeting, it can actually signal that the company is in financial trouble. When this happens, the company can be forced to reduce their dividends, which can cause the dividend yield to drop.
Tax Implications of Holding US Dividend Stocks in a TFSA
While the CRA doesn’t tax anything earned in a TFSA, the US doesn’t have the same policy. In the US, a TFSA isn’t recognized as a retirement account, so dividends from US stocks and ETFs are subject to a 15% non-recoverable US withholding tax. This amount is automatically deducted before the funds even hit your account.
While you normally could claim a foreign tax credit on your Canadian income tax return to recover the 15%, you can’t because the funds were held in a tax-sheltered account. However, if you do sell a US stock that was being held in a TFSA, then you won’t have to pay anything because the US doesn’t tax capital gains from non-resident investors.
Covered Call ETFs Vs Dividend Stocks
Covered call ETFs and dividend stocks work differently, making them ideal options for diversification and income stability in your portfolio. Covered call ETFs are designed to potentially produce monster returns quickly, while dividends focus on compounding long-term growth.
Some other things to mention are that covered call funds generate income by selling option premiums, and ETFs have slower capital growth than dividend stocks. In terms of taxes, you usually get a mix of regular dividends, capital gains or Return of Capital, making them more tax efficient.
Dividend Stock: Monthly Vs Quarterly
Whether you receive your dividend stocks monthly or quarterly, the total amount you’re going to receive will be the same. The only difference is when they’re paid. With a quarterly dividend stock, you receive funds 4 times per year, while a monthly dividend stock pays 12 times per year.
High Yields in Dividend Stocks That Signal Trouble
As we mentioned before, high dividend yields can be tricky, especially if they’re above 5-7%. This can be a red flag that the company is in trouble. This is because a plummet in stock prices can show a yield spike. It’s commonly referred to as a sucker yield and doesn’t indicate that the stock will pay out well.
Top Dividend ETFs Vs Picking Individual Stocks
The reason that some of the top dividend ETFs are popular is that they provide dividend sustainability and free cash flow. The performance is also better because there is already diversification within the ETF. You don’t have to worry about trading to increase your total returns, because the fund already contains strong fundamentals.
When you have individual stocks, instead, you may have higher potential revenue and total portfolio control, but it is much riskier. Research on how these dividend stocks performed and forward dividend yields is important, since more of your capital is going to be concentrated. Ultimately, individual stocks carry a much higher risk.
Best Canadian Dividend Aristocrats List for 2026
The top Canadian dividend aristocrats are companies that are listed on the S&P/TSX and have raised their dividend payouts (dividend increases) for at least 5 years in a row. Some of the most well-known on this list include:
- Bank of Nova Scotia (Scotiabank)
- Fortis Inc.
- Enbridge Inc.
- BCE Inc.
- Royal Bank of Canada
- TD Bank
- Canadian Natural Resources
- Canadian National Railway Company
- Sun-Life Financial Inc
