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Top Canadian (TSX) Dividend Stocks
UPDATED Jun 28, 2022
What are the best Canadian (TSX) Dividend Stocks?
According to our Simply Wall St analysis these are the best Canadian dividend companies. We look for companies with high quality dividends and healthy balance sheets to find the top Dividend Stocks.
Our criteria to find Top Dividend Companies
High Yield
- Companies with a high dividend yield are more attractive due to the higher expected income for each dollar invested.
- Yields vary between markets, so we focus on the top dividend payers in each market.
What do we look for?
- Is the yield in the top 25% of the market's dividend payers.
Consistent Dividends
- Companies with a strong track record of paying a consistent and growing dividend are the most attractive.
- If the dividend has been cut substantially in the past, then it's difficult to be confident about future payments.
What do we look for?
- Has the dividend been stable over the last 10 years.
- Has the dividend grown over the last 10 years.
Dividend Cover
- Ideally the company doesn't pay out all of its earnings, neglecting future growth.
- If a company is unable to afford its dividend, then it will probably lead to a dividend cut and share price erosion.
What do we look for?
- Are dividends covered by earnings.
- Are dividends forecast to be covered by earnings in the future.
Healthy Balance Sheet
- Investors want to make sure the company is positioned to cover its debts. Repayments on debt typically take priority over shareholder return initiatives.
What do we look for?
- Does the company have a manageable level of debt.
- Is the company able to cover its interest repayments.
8 companies meet this criteria in the Canadian market
Great-West Lifeco Inc., a financial services holding company, engages in the life and health insurance, retirement and investment services, asset management, and reinsurance businesses in Canada, the United States, and Europe.
Dividend Criteria
Stable Dividend
Earnings Coverage
Growing Dividend
Future Dividend Coverage
High Dividend: GWO's dividend (6.24%) is in the top 25% of dividend payers in the Canadian market (5.27%)
Notable Dividend
Rewards
Trading at 65.9% below our estimate of its fair value
Earnings are forecast to grow 5.9% per year
Risks
No risks detected for GWO from our risks checks.
Canadian Western Bank provides personal and business banking products and services primarily in Western Canada.
Dividend Criteria
Stable Dividend
Earnings Coverage
Growing Dividend
Future Dividend Coverage
Notable Dividend
High Dividend: CWB's dividend (4.69%) is low compared to the top 25% of dividend payers in the Canadian market (5.27%).
Rewards
Trading at 62.5% below our estimate of its fair value
Earnings are forecast to grow 12.61% per year
Earnings grew by 22.1% over the past year
Risks
High level of non-cash earnings
Shareholders have been diluted in the past year
Aecon Group Inc., together with its subsidiaries, provide construction and infrastructure development services to private and public sector clients in Canada, the United States, and internationally.
Dividend Criteria
Stable Dividend
Earnings Coverage
Growing Dividend
Future Dividend Coverage
High Dividend: ARE's dividend (5.54%) is in the top 25% of dividend payers in the Canadian market (5.27%)
Notable Dividend
Rewards
Trading at 55.5% below our estimate of its fair value
Earnings are forecast to grow 24.88% per year
Risks
High level of non-cash earnings
Profit margins (1.2%) are lower than last year (2.2%)
EQB Inc., through its subsidiary, Equitable Bank, provides personal and commercial banking services to retail and commercial customers in Canada.
Dividend Criteria
Stable Dividend
Earnings Coverage
Growing Dividend
Future Dividend Coverage
Notable Dividend
High Dividend: EQB's dividend (2.06%) is low compared to the top 25% of dividend payers in the Canadian market (5.27%).
Rewards
Trading at 74.9% below our estimate of its fair value
Earnings are forecast to grow 13.73% per year
Earnings grew by 16.9% over the past year
Risks
High level of non-cash earnings
Imperial Oil Limited engages in exploration, production, and sale of crude oil and natural gas in Canada.
Dividend Criteria
Stable Dividend
Earnings Coverage
Growing Dividend
Future Dividend Coverage
Notable Dividend
High Dividend: IMO's dividend (2.14%) is low compared to the top 25% of dividend payers in the Canadian market (5.27%).
Rewards
Trading at 31.4% below our estimate of its fair value
Earnings are forecast to grow 5.17% per year
Became profitable this year
Risks
Significant insider selling over the past 3 months
Alvopetro Energy Ltd. engages in the acquisition, exploration, development, and production of hydrocarbons.
Dividend Criteria
Earnings Coverage
High Dividend: ALV's dividend (6.6%) is in the top 25% of dividend payers in the Canadian market (5.27%)
Notable Dividend
Future Dividend Coverage
Growing Dividend
Stable Dividend
Rewards
Trading at 73.3% below our estimate of its fair value
Earnings are forecast to grow 29.38% per year
Earnings have grown 60.8% per year over the past 5 years
Risks
Shareholders have been diluted in the past year
Significant insider selling over the past 3 months
Dividend Criteria
Stable Dividend
Earnings Coverage
Future Dividend Coverage
Notable Dividend
High Dividend: BDT's dividend (5.06%) is low compared to the top 25% of dividend payers in the Canadian market (5.27%).
Growing Dividend
Rewards
Trading at 75.9% below our estimate of its fair value
Earnings are forecast to grow 20.77% per year
Risks
Large one-off items impacting financial results
K-Bro Linen Inc., together with its subsidiaries, provides laundry and linen services to healthcare institutions, hotels, and other commercial organizations in Canada and the United Kingdom.
Dividend Criteria
Stable Dividend
Growing Dividend
Notable Dividend
High Dividend: KBL's dividend (3.7%) is low compared to the top 25% of dividend payers in the Canadian market (5.27%).
Future Dividend Coverage
Earnings Coverage
Rewards
Trading at 52.9% below our estimate of its fair value
Earnings are forecast to grow 55.18% per year
Risks
Profit margins (2.8%) are lower than last year (4.7%)