Top Canadian (TSX) Dividend Stocks

Top Canadian (TSX) Dividend Stocks

UPDATED Jun 05, 2023

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.

5 companies meet this criteria in the Canadian market

Quebecor Inc., together with its subsidiaries, operates in the telecommunications, media, and sports and entertainment businesses in Canada.

Dividend Criteria

  • Stable Dividend

  • Earnings Coverage

  • Growing Dividend

  • Notable Dividend

  • High Dividend: QBR.A's dividend (3.68%) is low compared to the top 25% of dividend payers in the Canadian market (6.17%).

  • Future Dividend Coverage

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Rewards

  • Trading at 31.4% below our estimate of its fair value

  • Earnings are forecast to grow 5.28% per year

  • Earnings grew by 3.6% over the past year

Risks

  • Has a high level of debt

View all Risks and Rewards

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 (2.2%) is low compared to the top 25% of dividend payers in the Canadian market (6.17%).

See Full Stock Report

Rewards

  • Trading at 59.3% below our estimate of its fair value

  • Earnings are forecast to grow 21.17% per year

Risks

  • High level of non-cash earnings

  • Shareholders have been diluted in the past year

  • Significant insider selling over the past 3 months

View all Risks and Rewards

Martinrea International Inc. designs, develops, manufactures, and sells metal parts, assemblies and modules, fluid management systems, and aluminum products primarily to the automotive industry in North America, Europe, and internationally.

Dividend Criteria

  • Stable Dividend

  • Earnings Coverage

  • Growing Dividend

  • Notable Dividend

  • High Dividend: MRE's dividend (1.69%) is low compared to the top 25% of dividend payers in the Canadian market (6.17%).

  • Future Dividend Coverage

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Rewards

  • Trading at 56% below our estimate of its fair value

  • Earnings are forecast to grow 29.62% per year

  • Earnings grew by 595.9% over the past year

Risks

  • Has a high level of debt

View all Risks and Rewards

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

  • Future Dividend Coverage

  • Notable Dividend

  • High Dividend: KBL's dividend (3.75%) is low compared to the top 25% of dividend payers in the Canadian market (6.17%).

  • Earnings Coverage

See Full Stock Report

Rewards

  • Trading at 45% below our estimate of its fair value

  • Earnings are forecast to grow 41.33% per year

Risks

No risks detected for KBL from our risks checks.

View all Risks and Rewards

TransAlta Renewables Inc. owns, develops, and operates renewable and natural gas power generation facilities and other infrastructure assets in Canada, the United States, and Australia.

Dividend Criteria

  • Stable Dividend

  • Growing Dividend

  • High Dividend: RNW's dividend (7.53%) is in the top 25% of dividend payers in the Canadian market (6.19%)

  • Notable Dividend

  • Future Dividend Coverage

  • Earnings Coverage

See Full Stock Report

Rewards

  • Trading at 45.7% below our estimate of its fair value

  • Earnings are forecast to grow 39.66% per year

Risks

  • Profit margins (14.6%) are lower than last year (26.5%)

View all Risks and Rewards
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