In this article, we will be taking a look at 10 Canadian dividend stocks to buy.
Why Canadian Dividend Stocks?
When it comes to Canadian dividend stocks, we have seen immensely encouraging dividend increases very recently.
It’s expected that the big six Canadian Banks — Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia (Scotiabank), Bank of Montreal, Canadian Imperial Bank of Commerce, and National Bank of Canada — will resume boosting their dividends in the coming year, according to a Reuters report.
These banks on average have a dividend yield of 3.3%, compared to the sector median of 2.5%. The increases could range from 10% for Scotiabank to the 34% high for National Bank, according to National Bank Financial analyst Gabriel Dechaine. As such, the popularity of these stocks is expected to exponentially increase.
While stocks like Medtronic plc (NYSE:MDT), Verizon Communications (NYSE:VZ), Morgan Stanley (NYSE:MS), and McDonald’s Corporation (NYSE:MCD), are certainly among some of the top picks for dividend investors, Canadian bank stocks are also making their way slowly up that list.
Photo by lucas Favre on Unsplash
Let’s now take a look at the 10 Canadian dividend stocks to buy.
Canadian Dividend Stocks to Buy
10. Bank of Montreal (NYSE:BMO)
Number of Hedge Fund Holders: 12
Dividend Yield: 3.5%
Number of Years of Dividend Growth: 6
Bank of Montreal (NYSE:BMO), a diversified financial services company operating in North America, is among our top picks for Canadian dividend stocks to buy. It offers personal banking products and services including checking and savings accounts, alongside commercial banking products like business deposit accounts. The company has steadily been growing its dividend for the past six years as well.
Doug Young, an analyst at Desjardins, reiterated a Buy rating on Bank of Montreal shares this December.
In the fiscal fourth quarter of 2021, Bank of Montreal had an EPS of $2.59, beating estimates by $0.08. The company’s revenue was $5.12 billion.
By the end of the third quarter of 2021, 12 hedge funds out of the 867 tracked by Insider Monkey held stakes in Bank of Montreal worth roughly $142 million. This is compared to 12 hedge funds in the previous quarter as well, with a total stake value of approximately $133 million.
Like Medtronic plc (NYSE:MDT), Verizon Communications, Morgan Stanley, and McDonald’s Corporation, Bank of Montreal is a dividend stock among many hedge funds’ top picks.
9. Canadian Imperial Bank of Commerce (NYSE:CM)
Number of Hedge Fund Holders: 13
Dividend Yield: 3.8%
Number of Years of Dividend Growth: 6
Canadian Imperial Bank of Commerce (NYSE:CM) is another diversified financial institution. It offers its products and services to personal, business, public sector, and institutional clients in the US and Canada, and internationally. Some of its products include chequing, savings, and business accounts, and having raised its dividend yield for six years in a row, it is among the most popular Canadian dividend stocks to buy.
Canaccord’s Scott Chan just this December reiterated a Buy rating on shares of Canadian Imperial Bank of Commerce.
At the close of the third quarter of 2021, D. E. Shaw was the largest shareholder for Canadian Imperial Bank of Commerce, holding 709,693 shares worth $78.9 million. Apart from D. E. Shaw, 12 other hedge funds held stakes in the company, and the total stake value for all 13 hedge funds was approximately $289 million.
8. The Bank of Nova Scotia (NYSE:BNS)
Number of Hedge Fund Holders: 17
Dividend Yield: 4.27%
Number of Years of Dividend Growth: 5
The Bank of Nova Scotia (NYSE:BNS) is a Canadian bank offering financial products and services through its Canadian Banking, International Banking, Global Wealth Management, and Global Banking and Markets segments. It provides debit and credit cars, chequing and savings accounts, and mortgages and loans, among other products.
The stock has multiple positive ratings placed on it by analysts, among which we have a Buy rating from Canaccord analyst Scott Chan. He reiterated this rating just this December.
According to Insider Monkey’s third quarter hedge fund data, 17 funds held stakes in The Bank of Nova Scotia in that quarter worth about $193 million. Comparatively, in the second quarter, 14 hedge funds held stakes in the company worth $223 million.
7. Great-West Lifeco Inc. (TSE:GWO)
Number of Hedge Fund Holders: N/A
Dividend Yield: 4.5%
Number of Years of Dividend Growth: 6
Great-West Lifeco Inc. (TSE:GWO) is a financial services holding company operating in the life and health insurance industry. It offers benefit plan solutions, life disability, critical illness, accidental death, dismemberment, health, and dental protection, and creditor insurance products, among a range of others. The company has consistently grown its dividend for the past six years.
In November, National Bank’s Gabriel Dechaine reiterated a Sector Perform rating on Great-West Lifeco Inc. shares.
The company’s EPS in the third quarter was $0.73, while its revenue was approximately $13.14 billion.
Like Medtronic plc (NYSE:MDT), Verizon Communications, Morgan Stanley, and McDonald’s Corporation, Great-West Lifeco Inc. is a dividend stock investors are piling into today.
6. BCE Inc. (NYSE:BCE)
Number of Hedge Fund Holders: 15
Dividend Yield: 5.1%
Number of Years of Dividend Growth: 3
BCE Inc. (NYSE:BCE) is a Canadian communication services company that offers wireless, wireline, internet, and television services. It operates through its Bell Wireless, Bell Wireline, and Bell Media segments.
Jerome Dubreuil, an analyst at Desjardins, this November kept a Hold rating on BCE Inc. shares.
Out of 867 elite hedge funds, our data shows 15 such funds long BCE Inc. in the third quarter of 2021. Of these hedge funds, the largest shareholder for the company was Two Sigma Advisors.
5. Suncor Energy Inc. (NYSE:SU)
Number of Hedge Fund Holders: 32
Dividend Yield: 4.6%
Number of Years of Dividend Increases: 1
Suncor Energy Inc. (NYSE:SU), an integrated energy company, works to develop petroleum resource basins in Canada’s Athabasca oil sands. It also acquires and develops crude oil to transport and market in Canada and internationally.
An Outperform rating was kept on Suncor Energy Inc. shares this November by analyst Jason Bouvier from Scotiabank.
Suncor Energy Inc. was among the more popular Canadian dividend stocks that elite hedge funds were piling into in the third quarter, with 32 hedge funds holding stakes in the company worth $1.1 billion.
4. TC Energy Corporation (NYSE:TRP)
Number of Hedge Fund Holders: 15
Dividend Yield: 5.46%
Number of Years of Dividend Increases: 3
TC Energy Corporation (NYSE:TRP) is another energy company on our list, based in Canada and working on energy infrastructure in North America. It builds and operates a 93,400 km network of natural gas pipelines and is trying to become a steady choice for dividend investors, having consistently raised its yield for three year.
Analyst Linda Ezergailis from TD Securities offered investors more incentive to invest in TC Energy Corporation this November, by reiterating a Buy rating on the stock.
3. Pembina Pipeline Corp (NYSE:PBA)
Number of Hedge Fund Holders: 8
Dividend Yield: 6.2%
Number of Years of Dividend Increases: 6
Pembina Pipeline Corp (NYSE:PBA), an oil and gas storage and transportation company, is among investor favorites for Canadian dividend stocks to buy, with a yield of over 6%. The company operates conventional, oil sands, and heavy oil and transmission assets and has a transportation capacity of 3.2 millions of barrels of oil.
This December, TD Securities analyst Linda Ezergailis also reiterated a Buy rating on Pembina Pipeline Corp shares.
2. Keyera Corp. (TSE:KEY)
Number of Hedge Fund Holders: N/A
Dividend Yield: 6.7%
Number of Years of Dividend Increases: 6
Keyera Corp. (TSE:KEY), another oil and gas storage and transportation company, operates through its Gathering and Procession, Liquids Infrastructure, and Marketing segments. The company is a notable stock pick for those seeking Canadian dividend stocks to buy. It operates raw gas gathering pipelines and processing plants and also provides condensate handling services.
Wells Fargo’s Praneeth Satish holds an Equal Weight rating on Keyera Corp. shares as of this December.
1. Enbridge Inc (NYSE:ENB)
Number of Hedge Fund Holders: 24
Dividend Yield: 6.5%
Number of Years of Dividend Increases: 8
Enbridge Inc (NYSE:ENB) is yet another energy infrastructure company among the most popular Canadian dividend stocks to buy. It operates pipelines and related terminals to transport crude oil and other liquid hydrocarbons primarily in the US and Canada.
An Outperform rating was placed by Robert Kwan at RBC Capital, on shares of Enbridge Inc just this November.
ClearBridge Investments, an investment management firm, mentioned Enbridge Inc in its second-quarter 2021 investor letter. Here’s what they said:
“On a regional basis, the U.S. and Canada was the top contributor to quarterly performance, of which Canadian energy infrastructure company Enbridge was one of the lead performers. Enbridge owns and operates one of the largest oil and gas pipeline networks in North America. The company also owns regulated gas distribution utilities in Ontario, Canada. Enbridge’s Line 3 Replacement Project received a favorable court ruling regarding the adequacy of its Environmental Impact Statement. This significantly lowers the execution risk for the project and enables the company to place the project into service later in the year.”
You can also take a look at the Top 10 Stocks To Buy Now and Bill Gates’ Stock Portfolio: Top 15 Picks.
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originally published on Insider Monkey.
