In this article, we will take a look at the 10 Best Canadian Dividend Stocks.
Dividend stocks are the shares of publicly listed companies that regularly distribute a portion of the company’s earnings to the shareholders. High-quality dividend stocks have a long history of regular dividend payments to their shareholders with the top-tier dividend stocks increasing their dividend payouts over time, allowing the shareholders to build a regular cash stream.
Individuals can invest in dividend stocks directly, by adding individual dividend stocks to their portfolio, or through investments in mutual funds and Exchange Traded Funds (ETFs). There are multiple ETFs that provide access to investments in high-yield dividend companies, such as the Vanguard High Dividend Yield ETF with dividend yield of 2.7%.
Another useful ETF to track high-dividend Canadian stocks is the Vanguard FTSE Canadian High Dividend Yield Index ETF. The ETF primarily invests in common stocks of Canadian companies that pay dividends. Traded on the Toronto Stock Exchange, the ETF tracks the FTSE Canada High Dividend Yield Index which comprises 47 stocks and had a dividend yield of 4.6% as of August 31, 2022. The ETF had an annualized total return of 9.65% over the course of last 5 years, and 9.42% since inception in 2012.
Global markets have been going through a rough patch with fears of a potential recession due to inflation and aggressive monetary policies implemented by central banks.
If economic data continues to miss expectations, stocks, including dividend stocks could continue to decline. Given the uncertainty, it’s important to be well-diversified across different sectors and different companies. With Canadian stocks, there is an opportunity for investors to diversify to different geographies too. Given the decline in valuations, there could be an opportunity for long term investors to buy quality blue chip companies.
Toronto, Canada
Methodology
For our list, we took the 15 largest market cap companies of Canadian stocks listed on either the NYSE or NASDAQ that also had dividend yields of over 2% as of September 23 and we ranked them based on the number of hedge funds that held shares in the same stock at the end of Q2 2022. Of that list, we took the top 10.
By filtering with market cap, we ensure we get companies that are likely among the leaders in their sectors. By filtering with dividend yield, we ensure we get companies that have earnings power.
10 Best Canadian Dividend Stocks
10. TELUS Corporation (NYSE:TU)
Dividend Yield as of September 23: 4.95%
Number of Hedge Fund Holders: 15
Vancouver, British Columbia-based TELUS Corporation (NYSE:TU) is a leading communications technology company serving 17 million customer connections across wireless, data, IP, voice, television, entertainment, video, and security. Its portfolio also comprises TELUS Health, TELUS Agriculture & Consumer Goods, and TELUS International.
In May, the board of directors of TELUS Corporation (NYSE:TU) declared a quarterly dividend of C$0.3386 per share, representing an increase of 7.1% increase on a year-on-year basis. As a result of the increase, shares of the Canadian company have a dividend yield of 4.95% as of September 23.
On September 1, TELUS Corporation (NYSE:TU) announced that it had completed the previously announced acquisition of LifeWorks Inc. for a total consideration of C$2.3 billion. LifeWorks Inc. is a leading provider of digital and in-person solutions for mental, physical, financial, and social well-being.
As of Q2 2022, 15 out of the 895 hedge funds tracked by Insider Monkey were bullish on TELUS Corporation (NYSE:TU) and held its shares valued at $257 million. Jim Simons’ Renaissance Technologies was the largest shareholder holding 3.7 million shares valued at $82 million.
Alongside Canadian National Railway Company (NYSE:CNI), Cenovus Energy Inc. (NYSE:CVE), and Suncor Energy Inc. (NYSE:SU), TELUS Corporation (NYSE:TU) is a Canadian dividend stock that’s also held by hedge funds in our database at the end of Q2 2022.
9. Imperial Oil Limited (NYSE:IMO)
Dividend Yield as of September 23: 3.24%
Number of Hedge Fund Holders: 15
Calgary, Alberta-based Imperial Oil Limited (NYSE:IMO) is an integrated energy company focused on exploration, production, refining and marketing of oil and gas and other petroleum products. Its Esso and Mobil fueling network comprises more than 2000 stations across Canada.
Given the higher oil prices, shares of Imperial Oil Limited (NYSE:IMO) have risen over 11% this year despite the lower overall market. Imperial Oil Limited (NYSE:IMO) shareholders also benefit from the dividends the company pays.
For the third quarter 2022, Imperial Oil Limited (NYSE:IMO) declared a regular cash dividend of C$0.34 per common share. In terms of its dividend in Canadian dollars, the company has increased its annual dividend payment for 27 straight years.
On August 31, Imperial Oil Limited (NYSE:IMO) announced that it had completed the previously announced sale of XTO Energy Canada to Whitecap Resources Inc. for a total cash consideration of C$ 1.9 billion (Imperial’s share: C$ 940 million).
Imperial Oil Limited (NYSE:IMO) is among the Canadian favorites of hedge funds, with 15 of the 895 hedge funds tracked by Insider Monkey holding its shares valued at $545 million. First Eagle Investment Management was its biggest shareholder with ownership of 24.7 million shares valued at $1.2 billion.
8. The Bank of Nova Scotia (NYSE:BNS)
Dividend Yield as of September 23: 6.24%
Number of Hedge Fund Holders: 16
Toronto, Ontario-based The Bank of Nova Scotia (NYSE:BNS) is a leading bank in the Americas and the only bank with operations in Canada, US, and the Pacific Alliance countries. It offers advice, products, and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. It had C$1.3 trillion of assets, as of July 31, 2022.
Earlier this year in August, The Bank of Nova Scotia (NYSE:BNS) released the financial results for the quarter ended July 31, 2022. Its total revenue declined by 2% y-o-y to $5.8 billion, while it reported a net income of $2 billion, for the three months. It reported an EPS of $1.62, in-line with the consensus.
The board of directors of The Bank of Nova Scotia (NYSE:BNS) declared a quarterly dividend of C$1.03 per common share. The bank declared its initial dividend on July 1, 1833 and has made payments continuously since.
As of Q2 2022, 16 of the 895 hedge funds tracked by Insider Monkey owned shares of The Bank of Nova Scotia (NYSE:BNS), valued at $132 million. Its largest shareholder was Ken Griffin’s Citadel Investment Group.
7. Canadian Imperial Bank of Commerce (NYSE:CM)
Dividend Yield as of September 23: 5.73%
Number of Hedge Fund Holders: 16
Canadian Imperial Bank of Commerce (NYSE:CM), based in Toronto, Ontario, is a leading North American financial institution with 13 million personal banking, business, public sector, and institutional clients. It offers solutions and services across Personal and Business Banking, Commercial Banking and Wealth Management, and Capital Markets businesses.
In August, Canadian Imperial Bank of Commerce (NYSE:CM) released its financial results for the quarter ended July 31, 2022. Its total revenue increased by 1% y-o-y to $4.2 billion, while its net income declined by 6% y-o-y to $1.3 billion, for the three months. The normalized EPS was recorded at $1.43 for the quarter, beating the consensus by $0.03.
On August 25, the board of Directors of Canadian Imperial Bank of Commerce (NYSE:CM) declared a quarterly cash dividend of C$0.83 per common share. It hasn’t missed a regular dividend since its first dividend payment in 1868.
As of Q2 2022, 16 of the 895 hedge funds tracked by Insider Monkey were long Canadian Imperial Bank of Commerce (NYSE:CM), holding shares worth $191 million. Its largest hedge fund shareholder is Millennium Management with ownership of 1.5 million shares valued at $74 million.
6. Toronto-Dominion Bank (NYSE:TD)
Dividend Yield as of September 23: 4.44%
Number of Hedge Fund Holders: 19
Based in Toronto, Ontario, Toronto-Dominion Bank (NYSE:TD) is a leading banking and financial services provider offering a full range of financial products and services to more than 27 million customers with a focus on retail banking services in the United States and Canada. It had C$1.8 trillion in assets as of July 31, 2022.
In February, Toronto-Dominion Bank (NYSE:TD) announced an agreement to acquire First Horizon National Corporation (NYSE:FHN) in an all-cash transaction valued at $13.4 billion. In August, Toronto-Dominion Bank (NYSE:TD) announced an agreement to acquire Cowen Inc. (NASDAQ:COWN) in an all-cash transaction valued at $1.3 billion.
On September 2, Keefe Bruyette analyst Mike Rizvanovic upgraded Toronto-Dominion Bank (NYSE:TD) to ‘Outperform’ rating and increased the price target on its shares to C$103 from $90 as the Company has a “compelling growth story” in its U.S. business.
As of September 23, the stock has a dividend yield of 4.44%.
As of Q2 2022, 19 hedge funds tracked by Insider Monkey held shares of Toronto-Dominion Bank (NYSE:TD), worth $156 million. D E Shaw is its largest hedge fund shareholder.
Like Toronto-Dominion Bank (NYSE:TD), Canadian National Railway Company (NYSE:CNI), Cenovus Energy Inc. (NYSE:CVE), and Suncor Energy Inc. (NYSE:SU) are Canadian dividend stocks held by many hedge funds in our database at the end of Q2 2022.
5. Enbridge Inc. (NYSE:ENB)
Dividend Yield as of September 23: 7.08%
Number of Hedge Fund Holders: 25
Calgary, Alberta-based Enbridge Inc. (NYSE:ENB) is a pipeline company operating nearly 18,000 miles of crude oil and liquids pipelines in the United States and Canada, and natural gas pipelines across North America, as well as natural gas utility serving customers in Ontario. The company is responsible for the transport of 30% of the crude oil produced in North America and 20% of the natural gas consumed in the United States.
Enbridge Inc. (NYSE:ENB) has paid dividends to its shareholders for over 67 years. In terms of Canadian dollars, it has steadily grown dividends over the course of its history, resulting in an average compound annual growth rate of 10% for dividends over the past 27 years. The latest increase came in December 2021, with 3% increase in dividends to C$0.86 per common share per quarter translating into C$3.44 per share on an annualized basis.
On September 8, Raymond James analyst Michael Shaw increased the price target on Enbridge Inc. (NYSE:ENB) shares to C$60 from C$57 and upgraded the rating to ‘Outperform’ from ‘Market Perform’.
As of Q2 2022, Enbridge Inc. (NYSE:ENB) shares were held by 25 of the 895 hedge funds tracked by Insider Monkey, valued at $2.4 billion GQG Partners was its biggest shareholder with ownership of 51.9 million shares valued at $2.2 billion.
4. Canadian Natural Resources Limited (NYSE:CNQ)
Dividend Yield as of September 23: 4.84%
Number of Hedge Fund Holders: 33
Calgary, Alberta-based Canadian Natural Resources Limited (NYSE:CNQ) is one of the largest independent crude oil and natural gas producers in the world, focused on natural gas, light oil, heavy oil, in situ oil sands production and oil sands mining
In August, Canadian Natural Resources Limited (NYSE:CNQ) released the financial results for Q2 2022. Its revenue increased by 69% y-o-y to $8.9 billion, while its net income surged by 117% y-o-y to $2.7 billion, for the three months ended June 30, 2022. It reported a normalized EPS of $2.54 for the quarter, beating the consensus by $0.21.
Canadian Natural Resources Limited (NYSE:CNQ) declared a regular quarterly cash dividend of C$0.75 per share, and a special dividend of C$1.50 per share.
As of Q2 2022, 33 hedge funds out of the 895 hedge funds tracked by Insider Monkey held shares of Canadian Natural Resources Limited (NYSE:CNQ), valued at $2.3 billion. Its largest shareholder was Yacktman Asset Management with ownership of 16.9 million shares valued at $907 million.
3. Canadian National Railway Company (NYSE:CNI)
Dividend Yield as of September 23: 2.01%
Number of Hedge Fund Holders: 41
Montreal, Quebec-based Canadian National Railway Company (NYSE:CNI) is a North American transportation and logistics leader offering integrated shipping solutions, including rail, intermodal, trucking, freight forwarding, warehousing and distribution. Its rail network comprises nearly 20,000 route-miles of track connecting three coasts: the Atlantic, the Pacific and the Gulf of Mexico.
In July, Canadian National Railway Company (NYSE:CNI) released the financial results for the quarter ended June 30, 2022. Its total revenue increased by 21% y-o-y to $3.4 billion, while its net income surged by 23% y-o-y to $1 billion, for the three months. It reported a normalized EPS of $1.50 for the quarter, beating the consensus by $0.12. It declared a cash dividend of C$0.7350 per share for the quarter.
On September 12, BofA analyst Ken Hoexter upgraded Canadian National Railway Company (NYSE:CNI) to ‘Buy’ rating from ‘Neutral’ and increased the price target on its shares to $135 from $128 as “hiring rebounds and that volumes have inflected positively.”
As of Q2 2022, 41 of the 895 hedge funds tracked by Insider Monkey owned shares of Canadian National Railway Company (NYSE:CNI), valued at $7.5 billion. Chris Hohn’s TCI Fund Management is its largest shareholder with ownership of 36.7 million shares valued at $4.1 billion.
2. Cenovus Energy Inc. (NYSE:CVE)
Dividend Yield as of September 23: 2.06%
Number of Hedge Fund Holders: 42
Cenovus Energy Inc. (NYSE:CVE) is an integrated oil and natural gas company based in Calgary, Alberta. Operations of Cenovus Energy Inc. (NYSE:CVE) include oil sands projects in Alberta, crude oil and natural gas projects across Western Canada, crude oil production offshore Newfoundland and Labrador and natural gas and liquids production offshore China and Indonesia, and downstream operations including upgrading, refining, and marketing operations in Canada and the United States.
In July, Cenovus Energy Inc. (NYSE:CVE) released its financial results for the quarter ended June 30, 2022. Its net revenues surged by 74% y-o-y to $14.9 billion, while it reported a net income of $1.9 billion, for the three months. The normalized EPS was recorded at $0.98 per share, exceeding the consensus by $0.11.
Cenovus Energy Inc. (NYSE:CVE) announced in August that it had agreed to acquire the remaining 50% stake in Toledo Refinery from bp for a total consideration of $300 million. Earlier in June, the energy company had announced an agreement to acquire remaining 50% stake in Sunrise oil sands project in northern Alberta from bp.
As of Q2 2022, 42 of the 895 hedge funds tracked by Insider Monkey owned shares of Cenovus Energy Inc. (NYSE:CVE), valued at $2.9 billion. Soroban Capital Partners is its largest shareholder with ownership of 50.3 million shares valued at $957 million.
1. Suncor Energy Inc. (NYSE:SU)
Dividend Yield as of September 23: 5.25%
Number of Hedge Fund Holders: 47
Calgary, Alberta-based Suncor Energy Inc. (NYSE:SU) is an integrated energy company with operations across oil sands development, production and upgrading, offshore oil and gas production, petroleum refining in Canada and the United States and its Petro-Canada retail and wholesale distribution networks.
In August, Suncor Energy Inc. (NYSE:SU) reported the financial results for the quarter ended July 31, 2022. Its revenue increased by 70% y-o-y to $12.5 billion, while it generated a net income of $3.1 billion, for the quarter. It reported a normalized EPS of $2.11 for the quarter, beating the consensus by $0.02.
On August 8, Credit Suisse analyst William Janela assumed coverage of Suncor Energy Inc. (NYSE:SU) with an ‘Outperform’ rating and unchanged price target of C$63.
Suncor Energy Inc. (NYSE:SU) shares currently yield around 5.25% as of September 23.
According to the Insider Monkey data on 895 leading hedge funds, 47 hedge funds were long Suncor Energy Inc. (NYSE:SU) shares as of Q2 2022, with the total shares held by hedge funds valued at $2.4 billion. Arrowstreet Capital was the largest shareholder on record with ownership of 16.6 million shares valued at $583 million.
You may also like to read 10 Best Stocks to Buy According to Don Morgan’s Brigade Capital and 10 Best Stocks to Buy Before Recession Begins
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Disclosure: None. 10 Best Canadian Dividend Stocks is originally published on Insider Monkey.
