Read Our Finance Blog
Investing

Your Guide To Best Dividend Stocks In Canada In 2022

Dividends are the part of the profits that are provided to the shareholders of the company at a certain percentage. These dividends vary by year or month based on the profits and revenue of the company. The dividend stocks in Canada which render profits on a monthly, quarterly, and yearly basis provide greater flexibility and scope for profitability to your investment portfolio.

However, you cannot hope to gain big profits just by selecting stocks with significant dividend yields, or the highest dividend value. While choosing the ideal stocks, you also have to keep in mind the EPS or Earnings per share (EPS), revenue growth, price to earnings ratio, and the viability of the business.

Read: How to Buy Stocks in Canada: The Ultimate Beginner’s Guide

What is EPS?

It is a number calculated by dividing the profit of a company by its all outstanding stocks in the market. This number shows how much profitable a company is and based on that you can make the decision as to whether to invest in a company or not.

What is Revenue Growth?

As simple as it can get, it is the yearly increase in the revenue of a company. To translate this into numbers, divide the total rate of increased revenue by the total of revenues of the same period of last year. You will be able to compare the results better with revenue growth.

What is the Price to Earnings Ratio (P/E Ratio)?

This is a financial ratio that holds great significance in valuing a company. This ratio evaluates the current share price of a company to its EPS (as we described above). This is also known as the earnings multiple or the price multiple ratios.

To narrow down your choice, this article will list the most preferred dividend stocks in Canada for 2022.

Read: 22 Finance Terms You Should Know in 2022!

15 Top Dividend Stocks in Canada

dividend stocks in Canada

This list is a blend of different types of dividend stocks in Canada, which includes big bank stocks, aristocratic dividend stocks, monthly dividend stocks, etc. To combine it all, here is a comprehensive list of the top picks.

1. Enbridge

  • Sector: The energy sector
  • Market Cap: $102.85 billion
  • Symbol: ENB.TO
  • Dividend yield: 6.62%
  • Dividend Payout Ratio: 109.67%

The annual compound growth of Enbridge has been a 10% rate (CAGR) for the last 36 years. The company also has a good reputation for paying dividends for over 66 years. 

This is an aristocrat dividend stock that has a business model that is reliable in North America and is also one of the most prominent natural gas distribution networks in Canada. The product mix of this company includes gas utilities, renewable energy, crude oil, and natural gas transmission. 

The forward dividend on Enbridge stands at 6.62% and the ratio for payout is 109.67%. Hence, the cash flow supports the dividend payout.

Read: Guide to Investing in Mutual Funds in Canada

2. Fortis

  • Sector: The utility sector 
  • Dividend yield: 3.48%
  • Symbol: FTS.TO
  • Market Cap: $27.38 billion
  • Dividend payout ratio: 75.47%

The company has an impeccable record that maintains an upward trend of the dividend for over 47 years, and it is also one of the best dividend stocks in Canada too. This company was launched in 1885 in Labrador and Newfoundland. The company renders electricity to a staggering 3 million people in the Caribbean, U.S., and Canada. 

It is also in the phase of becoming eco-friendly and reducing the carbon footprint by eliminating carbon emission by up to 80% by 2035, and the greenhouse emissions will go down by 30% due to the 2030 BC operations. 

Electricity is a necessity that is paid by everyone without any discretion, and hence the earning of Fortis is destined to increase over the years as the significance of electricity does too. The current forward dividend of yield is 3.48%, and the DPR is 75.47%, while the P/E ratio stands at 22.05%. According to forecasts, the dividend growth of the company will be 6% by 2025.

Read: A Comprehensive List of High-interest Savings Accounts in Canada

3. Nova Scotia Bank

  • Sector: Financial Service 
  • Symbol: BNS.TO
  • Dividend yield: 4.61%
  • Dividend payout ratio: 58.06%
  • Market cap: $95.13 billion

BNS has been loyal to its shareholders and has provided dividend growth for over 43 years in the last 45 ones. This is also the third-largest bank of Canada and also the oldest one which was launched in 1832.

This is one of the most desired dividend stocks in Canada and its forward annual dividend yield is 4.61% which gives it an edge over the other banks with an accompanying DPR of 58.06% which is more than the recorded average for the financial service industry.

The asset reserve of BNS is more than $1.1 trillion with operations sprawling over Mexico, Europe, Canada, Asia, Australia, and the U.S. Tangerine, the most renowned online bank is also the arm of Nova Scotia.

Read: Avoid These Biases for Making Investment Decisions in Canada!

4. Royal Bank of Canada

  • Sector: Financial service
  • Symbol: RY.TO
  • Dividend Payout Ratio: 40.72%
  • Dividend Yield: 3.33%
  • Market Cap: $184.05 billion

RBC is one of the biggest Canadian Banks based on market capitalization and has the best performance amongst all. It has 17 million customers and operates in over 36 countries. The assets and earnings of this bank have been growing steadily for the last 50 years.

The payout ratio for RBC is 40.72% and the annual dividend yield is 3.33%. While the P/E ratio stands at 12.17. The dividend increase is on hold as per the order of the Office Of Financial Superintendent Of Financial Institutions (OSFI) since 2020, there will be more changes down the line in RBC.

Read: Creative Side Hustles in Canada to Increase Your Earnings in 2022

5. Canadian National Resources Limited

  • Sector: The energy sector
  • Symbol: CNQ.TO
  • Dividend Yield: 4.42%
  • Market Cap: $51.67 billion
  • Dividend payout ratio: 52.03%

The world is well aware of the prowess that the Canadian National Resources holds in the crude oil and natural gas industry. This company operates in the United Kingdom, Gabon, Canada, and Cote d’Ivoire. 

The current price of it, one of the best dividend stocks in Canada, is $43.76. The forward dividend yield stands at 4.42% and the dividends pay half of the net earnings.

The aim of the company for the future is to remove greenhouse emissions by 2050 through the Oil Sands Pathway to Net Zero mission.

Read: Beginners Guide to Stock Gifting in Canada

6. TransAlta Renewable Inc.

  • Sector: Utilities
  • Symbol: RNW.TO
  • Dividend Payout Ratio: 180.76%
  • Market Cap: $5.31 billion
  • Dividend Yield: 4.68%

TransAlta Renewables Inc. is one of the amazing dividend stocks in Canada that you can buy and keep in the long run. This dividend stock is lucrative since renewable energy is gaining more and more traction around the world due to the struggles of climate change.

The dividend yield of this company is 4.68%, for 5 years, the average dividend yield has been 6.38%. The plants of this company contain gas, solar, hydroelectric,  and power generation plants, and the United States. 

Read: All About Bitcoin Trading in Canada

7. BCE 

  • Sector: The communication sector
  • Symbol: BCE.TO
  • Market Cap: $60.54 billion
  • Dividend yield: 5.26%
  • Dividend payout ratio: 114.60%

This company was earlier called the Bell Canada Enterprises, it is the most prominent communication facility in Canada. The company has connections with the media landscape of CTV, Craven iHeartRadio, TSN, etc.

BCE’s dividend payout ratio is 114.6% and the dividend yield is 5.26%. And the cash flow is pretty impressive. 

Read: Beginners’ Guide to RRSP Investments in Canada

8. Algonquin Power & Utilities Corp

dividend stocks in Canada

  • Sector: Utilities
  • Symbol: AQN.TO
  • Market cap: $12.11 billion
  • Dividend payout ratio: 55.78%
  • Dividend yield: 4.38%

This company deals with renewable energy and utilities and carries the ability to generate 3 GW, wind, hydro, thermal, and solar energy sources. The dividend yield of the company is 4.38%, the investments will be slated to $9.4 billion by 2025, and it is one of the solid dividend stocks in Canada that you should prefer buying.

Read: Top 9 International Money Transfer Apps In Canada

9. Telus Corporation

  • Sector: The communication sector
  • Symbol: T.TO
  • Dividend payout ratio: 132.24%
  • Dividend yield: 4.32 %
  • Market cap: $39.82 billion

Telus is an impeccable communication sector service which is also a very favorable stock by many investors. This company was one of the many that took the first leap towards 5G network and it envisions providing remote communication to over 600 urban and remote Canada communities by 2021 end. 

The customer base of this company is 15.2 million and the goal is to accelerate the annual dividend by 7-10% by the 20222 ends. 

The high dividend ratio is the result of the cash flow that it enjoys.

Read: A Comprehensive List Of Best Robo Advisors In Canada!

10. Capital Power Corporation

  • Sector: Utilities
  • Market cap: $5.05 billion
  • Symbol: CPX.TO
  • Dividend yield: 4.98%
  • Dividend payout ratio: 123.49%

This company is the owner of many power generation facilities throughout Canada and the U.S. having a power generation capability of 6,400 MW. The company has a staggering investment of $40 million in carbon capture research and the goal is to go carbon neutral by 2050. 

The average dividend yield for the last 5 years is more than 5% and hence it is quite a popular dividend pick amongst investors. The P/E ratio is 26.59 and there is a recent update of an increase in dividend by 6.8%.

Read: Top 10 Investment Rules To Follow In Canada!

11. Bank of Montreal

  • Sector: Financial service
  • Symbol: BMO.TO
  • Dividend payout ratio: 39.55%
  • Dividend yield: 3.32%
  • Market cap: $83.46 billion

BMO holds the title of being one of the biggest Canadian banks, which is 204 years old, making it quite old too.

The dividend payment by this band has continued from 1829, and it stands out with a policy of paying 50%-40% of its total earnings in the form of dividends. 

The customer base of this bank is a sprawling 12 million and hence the dividend payout is not likely to be interrupted by anything. 

Read: What Are The Investment Risks You Need To Know In Canada?

12. Granite Real Estate Investment Trust

  • Sector: Real estate
  • Symbol: GRT-UN.TO
  • Dividend payout ratio: 22.98%
  • Dividend yield: 3.24%
  • Market Cap: $6.065 billion

This company has a wide and diversified portfolio of over 118 properties in countries of the U.S., U.K., Germany, Netherlands, Canada, etc. It has over 51.3 million square feet of area for lease in the most renowned real estate global markets. 

The forward annual dividend yield of the company is 3.24% and is consistent, hence good for diversifying the portfolio. 

Read: 13 Ways on How to Improve Your Finances in Canada

13. National Bank

  • Sector: Financial sector
  • Symbol: NA.TO
  • Dividend payout ratio: 34.93%
  • Dividend yield: 2.91%
  • Market Cap: $33.25 billion

This bank holds the title of being the 6th largest bank with an asset reserve of more than $350 billion. The bank is in an expansion phase and has over 389 branches with 929 ATMs all over Canada, and a customer base of 2.6 million people. The company has the mission to sustain its dividend payout ratio for almost 40-50%.

Read: Top 10 Ways To Pay Off Credit Card Debt In Canada 

14. Pembina

  • Sector: The energy sector
  • Symbol: PPL.TO
  • Market Cap: $21.74 billion
  • Dividend yield: 6.48%
  • Dividend payout ratio: 61.17%

Also known as the Pembina Pipeline Corporation, it has been in existence for 65 years and is involved in transporting oil and gas all over Canada. The dividend of this company is paid out monthly.

Read: GIC vs. Mutual Funds – Which One is Best for You?

15. Canadian National Railway Company

  • Sector: Industrials
  • Symbol: CNR.TO
  • Market Cap: $104.83 billion
  • Dividend yield: 1.63%
  • Dividend payout ratio: 42.20%

Railway transportation stays a major way for freight moving across North America, and hence this company continues to thrive.

CN has a network of railways that is 20,000 miles long and runs across the U.S. and Canada. It was launched in 1919 and has been transporting over 300 million metric tonnes of goods annually. 

The dividend of CN has been on a rise for the last 2 decades, and the evidence is clear through their balance sheet and cash flow statements. The P/E ratio of this company is 26.22.

Read: Top 11 Ways to Avoid Payday Loans in Canada

The Bottom Line on Dividend Stocks in Canada

The investment in these dividend stocks is not very complex, you can either do this by purchasing the sole stocks or utilizing the dividend ETF which contains many stocks. 

Once you have studied the stocks through the relevant technical and fundamental analysis, you can buy them via an online or discount brokerage account. If you buy any individual stock, you will be bearing more investment risks and hence your portfolio will become conservative over time. Your portfolio will have enough diversification and would lack in providing you with desired returns. 

An ETF or an Exchange-traded Fund might be a better pick because on buying one ETF, you are getting a bundle of stocks with it. This has an almost similar dividend payout to the individual stocks. This financial instrument leads to easy diversification and you will have more stocks with just one asset.  However, you will be paying an added fee, also known as the MER or Management Expense Ratio, or Management fee. You should calculate your returns and compare them with the MER that you pay, to find out the real earnings from an ETF.

While investing your hard-earned money, it is always advisable to look from different perspectives, consider your goals, and based on that make a decision to avoid regrets in the future. I hope you found this article helpful. Let us know in the comments.

Read: All-in-One ETF in Canada, You Can’t Ignore it at All! 


Devanshee Dave

Devanshee is a staff writer at YourFirst.ca. She is a finance enthusiast and has completed her Master’s degree in Mass Communication & Journalism. She has worked as a journalist in a local business newspaper, multiple start-ups as well as finance and economy-related online media houses.

Leave a Reply

Your email address will not be published.

About YourFirst.ca

YourFirst.ca is your trusted resource to find simple Canadian financial advice for Your First everything! Buying your first home, applying for your first mortgage, or making your first investment should not be that difficult. Learn more about us:

Learn More About Us
Blog Categories
Read Our Blog
Cart Overview