Top Canadian (TSX) Dividend Stocks

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

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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.

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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%).

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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

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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

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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%)

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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%).

See Full Stock Report

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

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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%).

See Full Stock Report

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

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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

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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

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Bird Construction Inc. operates as a general contractor in Canada.

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

See Full Stock Report

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

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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

See Full Stock Report

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%)

View all Risks and Rewards
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