10 Best Canadian Dividend Stocks: November 2022 Update

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Dividend Earner

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2 min read Affiliate Disclosure

While there are various dividend investing strategies, investors tend to choose between dividend growth investing, dividend income investing or a mix of both.

One key quality of the selected dividend stocks below is the blend of dividend yield and dividend growth. The blend is important, if not critical, as high yield dividend stocks can be dangerous and detrimental to your portfolio down the road. Don’t make the mistake.

You should consider these dividend stocks for a core dividend income portfolio to generate retirement income or as a foundation for your dividend growth portfolio. You can find many present in my portfolio.

Top 10 Canadian Dividend Stocks

The monthly top 10 rarely have the same 10 stocks. The page is updated monthly. Be sure to come back, or better yet, follow the top 10 with the Canadian Dividend Screener.

About Dividend Growth Stocks

You can see the dividend yield of a stock anywhere, but the dividend growth for a company is rarely free, and yet critical to make the best investment decision for maximum profit down the road.

Looking Past The Canadian Dividend Aristocrats

As a cautionary tale, the companies listed below look past the Canadian Dividend Aristocrats, and focus on 10 years of dividend increases – more like the Canadian Dividend Achievers.

The Focus Is Not High Yield

Another important note is that the best Canadian dividend stocks are not meant to be the highest dividend stocks. Here is how I categorize yield.

  • Over 6% is a risky yield (unless there is a market crash) or it comes from advanced investing instruments (think covered calls)
  • Between 4% and 6% is high yield (company has consistent excess cash)
  • Between 2% and 4% is normal yield
  • Under 2% is low yield with higher stock growth

The list is not about finding a stock that pays income in retirement. It’s about building wealth with dividend growth during the accumulation years. Investing for retirement income is a little more complicated a withdrawal, and taxes come into play.

REITs rarely make the top 10 as they have abismal distribution growth. Rogers Sugar will also not make it to the top either, it behaves too much like a bond.

The Best TSX Dividend Stocks

Technically, you can consider the below as the best TSX dividend stocks now for an entry point. The list represents potential opportunities to consider adding to your portfolio provided the companies match your investing criteria.

1. Canadian Natural Resources

Canadian Natural Resources is a diversified and independent energy producer in the world. It is the largest independent natural gas and heavy crude oil producer in Canada.  It operates a balanced mix of natural gas, light crude oil, heavy crude oil, and oil sands. The company holds some of the best oil sand assets in North America, particularly thermal in situ properties, having tremendous growth potential.

The company’s business can be broadly classified into Exploration and Production (North America, North Sea, offshore Africa), Oil Sands Mining and Upgrading, and Midstream and Refining segments. The Exploration and Production segment is Canadian Natural’s core business, while the other two businesses provide a nice diversification.

Canadian Natural has a balanced mix of natural gas, light crude oil, heavy crude oil, bitumen, and SCO. The company also owns midstream assets consisting of two crude oil pipeline systems and cogeneration plants, which enables the transportation of heavy crude oil in international markets.

Key Investment Data

  • Ticker: TSE:cnq
  • Sector: Energy
  • Industry: Oil & Gas E&P
  • Market Cap: 91.17B
  • Market Cap Group: Large Cap
  • P/E: 8.01
  • Dividend Yield: 4.14%

2. Cogeco

Cogeco Inc. is a leading telecommunication and media company based in North America. The company provides cable TV, telephone, and Internet to customers in Ontario, Quebec, and some parts of the US.

The company operates through two subsidiaries - Cogeco Communications (cable, broadband services) and Cogeco Media (radio) and  reports its results through two operating segments: Communications (95% of 2017 revenues) and Other (5%). By geography, Canada accounts for 76% of the company’s revenues while the US constitutes the balance 24%.

Cogeco owns an extensive and advanced network of communication infrastructure consisting of long distance fibre optic systems, advanced hybrid fibre-coaxial broadband distribution networks, point-to-point fibre networks and fibre-to-the-home network technologies. It also owns and operates 13 radio stations across Quebec.

Key Investment Data

  • Ticker: TSE:cgo
  • Sector: Communication Services
  • Industry: Telecommunication Services
  • Market Cap: 0.82B
  • Market Cap Group: Small Cap
  • P/E: 6.15
  • Dividend Yield: 5.07%

3. Scotia Bank

Scotiabank is a leading international bank in Canada and a leading financial services provider in the Americas. The bank has a presence in personal and commercial, corporate and investment banking, wealth management and capital markets, and serves 25 million customers worldwide.

With a rich history of 185 years, the bank has developed an extensive network of over 960 branches and more than 3,600 automated banking machines in Canada, and 1,800 international branches.

Scotiabank has a wide geographic presence in attractive markets in Latin America (71% of revenues), Caribbean & Central America (25%) and Asia (4%). It operates through Canadian banking (49% of earnings), international banking (36%) and global banking and markets (15%) business lines.

Key Investment Data

  • Ticker: TSE:bns
  • Sector: Financial Services
  • Industry: Banks - Diversified
  • Market Cap: 81.82B
  • Market Cap Group: Large Cap
  • P/E: 8.22
  • Dividend Yield: 6.00%

4. First National Financial

First National Financial Corp is Canada’s largest non-bank mortgage lender. In the last thirty years of its business, the company has built a leading reputation in real estate financing with over $106 billion in Mortgages Under Administration and is the largest commercial mortgage lender in the country today.

More than 80% of the MUA is insured mortgages, followed by conventional style family residential mortgages (13%) and multi-unit residential and commercial mortgages (6%). It maintains diverse and flexible funding sources and is known for its prudent and conservative underwriting practices.

Size, large national presence and focus on mortgage financing are key differentiators for the company. The Canadian mortgage market is valued at over $1.1 trillion and given its leading reputation, First National is in a good position to benefit from this opportunity.

Key Investment Data

  • Ticker: TSE:fn
  • Sector: Financial Services
  • Industry: Mortgage Finance
  • Market Cap: 2.06B
  • Market Cap Group: Mid Cap
  • P/E: 10.62
  • Dividend Yield: 6.98%

5. Enghouse Systems

Enghouse Systems is a software and services company engaging in developing and selling enterprise oriented applications software. Enghouse is headquartered in Canada and has offices in over 20 countries.

The company operates through three divisions, interactive, networks and transportation to address the different vertical markets. It has two business segments, Interactive management group which provides customer interaction software (55% of 2018 revenues) and Asset management group that offers operations support systems, mobile value-added services systems and data conversion systems (45%).

Enghouse’s solutions cater to enhance customer service, increase efficiency and improve communications for banks, insurance, utility, technology, hospitality companies, etc. By geography, the U.S. accounted for 30% of total revenues in 2018, followed by 19% from the U.K., Europe (18%), Scandinavia (24%), Asia-Pacific (6%), and Canada (3%).

Key Investment Data

  • Ticker: TSE:engh
  • Sector: Technology
  • Industry: Software - Application
  • Market Cap: 1.72B
  • Market Cap Group: Small Cap
  • P/E: 19.96
  • Dividend Yield: 2.37%

6. Equitable Group

Equitable Group Inc. is a leading financial services provider in Canada. It operates through its wholly owned subsidiary, Equitable Bank, which is the ninth largest Schedule I bank, and a Challenger Bank in Canada. The bank offers a wide range of residential and commercial lending and savings solutions to its wide range of clients including self borrowers, commercial real estate investors, and newcomers to Canada.

Equitable operates through a network of independent mortgage brokers and other business partners across Canada. The bank serves its clients from coast to coast through its branchless banking model and customer first approach. The bank’s operations can be organized into single family lending services, commercial lending services, securitization financing, EQ Bank and brokered deposits. Equitable Bank has approximately $27.5 billion in assets under management.

The bank has been diversifying into adjacent business such as reverse mortgages and cash surrender value LoC through its commercial lending platform, since 2018.

Key Investment Data

  • Ticker: TSE:eqb
  • Sector: Financial Services
  • Industry: Mortgage Finance
  • Market Cap: 2.07B
  • Market Cap Group: Mid Cap
  • P/E: 6.37
  • Dividend Yield: 2.38%

7. Canadian Western Bank

Canadian Western Bank is a leading bank in Canada. It is a part of the CWB Financial group and was formed by the amalgamation of Bank of Alberta and Western & Pacific Bank of Canada. The bank provides specialized financial services in business and personal banking, and wealth management services to small and medium-sized companies.

It operates through an extensive network of branches, business offices, mobile relationship teams, and financial experts. Canadian Western Bank has a huge presence in western parts of Canada.

It focuses on general commercial, equipment financing; and construction and real estate project financing. Canadian Western Bank offers a wide range of services including chequing and savings accounts, mortgages, loans and investment products in the personal banking segment through a network of 42 branches.

Key Investment Data

  • Ticker: TSE:cwb
  • Sector: Financial Services
  • Industry: Banks - Regional
  • Market Cap: 2.38B
  • Market Cap Group: Mid Cap
  • P/E: 6.92
  • Dividend Yield: 4.87%

8. Cogeco Cable

Cogeco Communications is a leading North American communications company. It engages in providing internet, video and telephony services to residential and business customers. Cogeco Communications is a subsidiary of Cogeco Inc. The company operates as Cogeco Connexion in Canada, and Atlantic Broadband in 11 US states. Cogeco Communications Inc. provides a suite of information technology services to its business customers.

It is also the eighth largest cable operator in North America and operates 13 radio stations across Quebec through its subsidiary Cogeco Media. Cogeco Communications has three business segments: Canadian broadband services (60% of earnings), American broadband services (33%) and Business information and communications technology services (7%).

It has a strong presence in North America. Cogeco Communications owns extensive two-way broadband fiber networks, 16 data centers, and spectrum licenses of significant capacity. The company is known for providing superior internet speeds and video services and has developed sticky customer relationships in the last six decades of existence.

Key Investment Data

  • Ticker: TSE:cca
  • Sector: Communication Services
  • Industry: Telecommunication Services
  • Market Cap: 3.30B
  • Market Cap Group: Mid Cap
  • P/E: 7.96
  • Dividend Yield: 4.29%

9. Emera

Emera Inc. is a leading North American diversified energy and services company with assets worth $30 billion. The company engages in the generation, transmission, and distribution of electricity and gas, and provides other utility energy services. It also has investments in renewable energy assets.

Emera Inc. has operations in Canada, the USA and in four Caribbean countries. The company serves a diverse base of residential, commercial as well as industrial customers.

It operates a balanced and diversified portfolio consisting of ~90% regulated assets in electric utilities, gas LDCs; and unregulated gas-fired generation across North America. Emera reports its results in six operating segments: Emera Florida and New Mexico, Nova Scotia Power Inc., Emera Maine, Emera Caribbean, Emera Energy, and corporate & other.

Key Investment Data

  • Ticker: TSE:ema
  • Sector: Utilities
  • Industry: Utilities - Regulated Electric
  • Market Cap: 13.94B
  • Market Cap Group: Large Cap
  • P/E: 17.41
  • Dividend Yield: 5.31%

10. Hardwoods Distribution

Hardwoods Distribution Inc. is a world-class distributor of architectural building products operating under multiple brands across North America. They are uncompromising in their commitment to be the preferred choice for their valued customers, the best partner for their vendors, and a great place to work for their valued employees.

HDI employs over 3,000 dedicated employees and maintains a pronounced professional and entrepreneurial sales and services culture. They operate from 88 locations across North America with approximately 90% of their annual sales generated in the United States and 10% in Canada.

HDI sells decorative surfaces and composite panels, hardwood plywood, high-grade hardwood lumber, and other architectural building products to industrial manufacturing customers across North America. Core to their product philosophy is the protection of the environment.

They embody this by manufacturing or distributing only wood products made from legally harvested forests and meeting and or exceeding industry and government regulatory guidelines. They estimate that approximately half of the products they sell to industrial manufacturers end up in residential construction applications. Approximately 30% reside in the commercial/institutional construction sector, and the remainder in other markets.

Hardwoods Distribution is built around renewable and recyclable resources and are active in their efforts to minimize their environmental impact in addition to providing products that are recognized for contributions to sustainability. HDI works hard to reduce the environmental impact of their operations through waste prevention.

Both paper and aluminum recycling programs are standard practice, as is electronic invoicing, which reduces their requirement for paper and the use of fossil fuels in the delivery of those invoices. Their distribution centers seek only to purchase consumable paper products made from post-consumer, recycled, or Forestry Stewardship Council (FSC) fiber, and all cardboard cover sheets are made from 100% recycled cardboard.

They look for vendors whose products have been certifies through a third party. Global and local communities vastly benefit from well managed forests, and HDI understand that the decisions they make in how they conduct their business and where they source products, also implies a social and economic responsibility to the people and communities that live in those regions. For this reason, the company asks that their foreign manufacturers supply them a statement of compliance with all government regulations regarding fair wages and labor unions’ rights to collective bargaining, as well as contribute to the laborer’s social insurance benefit programs as enforced by their local governments.

Key Investment Data

  • Ticker: TSE:hdi
  • Sector: Industrials
  • Industry: Industrial Distribution
  • Market Cap: 0.62B
  • Market Cap Group: Small Cap
  • P/E: 3.20
  • Dividend Yield: 1.93%

Build Your OWN Top List

My portfolio is generating over 12% annual returns since 2009. It's not from the beginning of the year or from 2019, it's from 2009 !!! That's a consistent return which means using the rule of 72, I double my portfolio every 6 years.

My approach is simple but you need key data that I have cultivated with the Dividend Snapshot Screeners. No other investment services provide you with easy to understand data but also actionable data. No hidden magic.

In fact, I have tried all of the investment services for dividend investors like a crash test dummy of investment services. Just ask me, and you'll learn why there was nothing I could use out there and build the Dividend Snapshot Screeners.

DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.

DISCLAIMER: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your investment decisions at your own risk – see my full disclaimer for more details.