In this article, we discuss 11 best Canadian dividend stocks to buy now. You can skip our detailed analysis of Canadian dividend stocks and their performance and go directly to read 5 Best Canadian Dividend Stocks To Buy Now.
The Canadian stock market regained its footing last year after suffering heavily in the face of the pandemic in 2020. The stocks recorded their best year in over a decade, returning 22% in 2021, according to a report by Bloomberg. Though the performance of Canadian equities is not very promising this year, the Canadian benchmark index is still surpassing the S&P 500, its American counterpart. S&P/TSX Composite Index reported a 4.18% decline year-to-date, compared with a 16.8% drop in the broader market, as of the close of November 27.
Given the market volatility, investors around the world are increasingly considering dividend investments to glide through this uncertain period. Over the years, dividend stocks have balanced out the ill effects of inflation as companies with strong dividends continued with their payouts. According to a report published by RBC Global Asset Management, dividends have represented over 30% of the total return derived from the Canadian equity market in the last 30 years. The report also mentioned that dividend growth surpassed inflation in Canada in the past 20 years. The annual dividend growth rate of the S&P/TSX from 2002 to 2022 came in at 7.9%, while CPI recorded a 2.2% growth during the same period.
Many major companies in the US have reported dividend hikes during the third quarter of 2022. According to a report by S&P Dow Jones Indices, 529 dividend increases were reported during the quarter, amounting to over $19.1 billion. Moreover, per-share dividends for the S&P 500 showed an 8.5% year-over-year growth to $16.66.
While American dividend stocks like General Mills, Inc. (NYSE:GIS), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) keep garnering investors’ attention, we will analyze some of the best Canadian dividend stocks in our article.
Photo by Yiorgos Ntrahas on Unsplash
Our Methodology:
For this list, we selected some of the best Canadian stocks that pay dividends to shareholders. These companies are headquartered in Canada. We examined these companies through their overall financial health. They are ranked according to dividend yields, as of November 28.
Best Canadian Dividend Stocks To Buy Now
11. Brookfield Asset Management Inc. (NYSE:BAM)
Dividend Yield as of November 28: 1.23%
Brookfield Asset Management Inc. (NYSE:BAM) is a Canadian investment management company that provides related services to its customers. In October, Deutsche Bank maintained a Hold rating on the stock, expressing concerns regarding the current market. The firm gave a skeptical stance about the asset managers this year.
In the third quarter of 2022, Brookfield Asset Management Inc. (NYSE:BAM) reported revenue of $23.4 billion, which showed a 21.7% growth from the same period last year. The company’s cash flow for the quarter came in at $1.4 billion and its net income stood at $716 million. During the quarter, it paid $3 million in dividends to shareholders, which makes it one of the best dividend stocks on our list.
On November 27, Brookfield Asset Management Inc. (NYSE:BAM) declared a quarterly dividend of $0.14 per share, in line with its previous dividend. The stock’s dividend yield on November 28 came in at 1.23%. The company can be a good addition to diversified dividend portfolios, alongside General Mills, Inc. (NYSE:GIS), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP).
The number of hedge funds tracked by Insider Monkey owning stakes in Brookfield Asset Management Inc. (NYSE:BAM) grew to 39, from 34 in the previous quarter. The collective value of these stakes is over $2 billion. With roughly 15 million shares, Viking Global was the company’s leading stakeholder in Q3 2022.
Baron Funds mentioned Brookfield Asset Management Inc. (NYSE:BAM) in its Q3 2022 investor letter. Here is what the firm has to say:
“Brookfield Asset Management Inc. (NYSE:BAM) is a leading global alternative asset manager and operator that is one of the largest owners and operators of real estate and infrastructure assets in the world.
It is currently valued at more than a 50% discount to management’s assessment of the company’s current value. At the company’s September 2022 Investor Day, Brookfield’s management team laid out a multi-year growth plan with expectations for its shares to increase from its recent price of only $40 to more than $175 over the next five years.”
10. Canadian National Railway Company (NYSE:CNI)
Dividend Yield as of November 28: 1.70%
Canadian National Railway Company (NYSE:CNI) is a Canada-based transport company that provides services in rail shipping, trucking, and warehousing. In October, BMO Capital lifted its price target on the stock to C$180 with an Outperform rating on the shares, acknowledging the company’s overall performance this year.
In Q3 2022, Canadian National Railway Company (NYSE:CNI) reported a 25.6% year-over-year growth in its revenue of C$4.51 billion. The company’s free cash flow for the first nine months of the year came in at roughly C$3 billion, compared with C$2.03 billion in the prior-year period. Its strong cash flow was sufficient to cover its dividend payments.
Canadian National Railway Company (NYSE:CNI) currently pays a quarterly dividend of C$0.7325 per share, with a dividend yield of 1.70%, as of November 28. The company is one of the best dividend stocks on our list as it holds a 22-year track record of consistent dividend payments.
At the end of September 2022, 42 hedge funds tracked by Insider Monkey owned stakes in Canadian National Railway Company (NYSE:CNI), up from 41 in the previous quarter. The collective value of these stakes is over $12 billion. Bill & Melinda Gates Foundation Trust owned the largest stake in the company in Q3.
9. Royal Bank of Canada (NYSE:RY)
Dividend Yield as of November 28: 3.81%
Royal Bank of Canada (NYSE:RY) is a Canadian multinational financial services company and is the largest bank in the country. The company has raised its dividends each year since 2012, which makes it one of the best dividend stocks on our list. It currently pays a quarterly dividend of C$1.28 per share for a dividend yield of 3.81%, as of November 28.
In September, Barclays reinstated its coverage of Royal Bank of Canada (NYSE:RY) with an Overweight rating and a $137 price target. The firm appreciated the company’s assets under management and overall performance.
At the end of Q3 2022, 14 hedge funds tracked by Insider Monkey reported owning stakes in Royal Bank of Canada (NYSE:RY), up from 12 in the previous quarter. The collective value of these stakes is over $56.2 million. Israel Englander and Ken Griffin were some of the company’s major stakeholders in Q3 2022.
8. The Toronto-Dominion Bank (NYSE:TD)
Dividend Yield as of November 28: 3.91%
The Toronto-Dominion Bank (NYSE:TD) is a Toronto-based multinational banking and financial services company. In fiscal Q3 2022, the company reported revenue of C$11.6 billion, up from 8.3% in the same period last year. Its net income for the quarter came in at $3.2 billion and retail net income amounted to $2.2 billion.
The Toronto-Dominion Bank (NYSE:TD) has been raising its dividends consistently for the past eight years, which makes it one of the best dividend stocks on our list. The company pays a quarterly dividend of C$0.89 per share and has a dividend yield of 3.91%, as of November 28.
National Bank maintained a Sector Perform rating on The Toronto-Dominion Bank (NYSE:TD) in November with a $103 price target.
The number of hedge funds tracked by Insider Monkey owning stakes in The Toronto-Dominion Bank (NYSE:TD) grew to 22 in Q3 2022, from 19 in the previous quarter. The collective value of these stakes is nearly $200 million.
7. Canadian Natural Resources Limited (NYSE:CNQ)
Dividend Yield as of November 28: 4.14%
Canadian Natural Resources Limited (NYSE:CNQ) is a Calgary-based oil and natural gas company that specializes in crude oil. In the third quarter of 2022, the company reported an operating cash flow of C$6.1 billion, and its free cash flow after dividend payments amounted to over C$1.7 billion. Moreover, it paid approximately $2.5 billion in dividends during the quarter, which makes it one of the best dividend stocks on our list.
On November 13, Canadian Natural Resources Limited (NYSE:CNQ) declared a 13% hike in its quarterly dividend to C$0.85 per share. This was the company’s 23rd consecutive year of dividend growth. The stock’s dividend yield on November 28 came in at 4.14%.
Goldman Sachs upgraded Canadian Natural Resources Limited (NYSE:CNQ) to Buy with a C$69 price target as the firm sees an attractive valuation for the stock. The firm also appreciated the company’s operational performance.
Canadian Natural Resources Limited (NYSE:CNQ) was a popular buy among hedge funds in Q3 2022, as 41 funds owned stakes in the company, up from 33 in the previous quarter. These stakes are collectively valued at over $2 billion. Yacktman Asset Management was the company’s leading stakeholder in Q3.
6. Pembina Pipeline Corporation (NYSE:PBA)
Dividend Yield as of November 28: 5.50%
Pembina Pipeline Corporation (NYSE:PBA) is a pipeline transport company that specializes in the delivery of oil and natural gas. The company is one of the best dividend stocks on our list as it pays monthly dividends to shareholders. It has been raising its dividends consistently for the past six years. It currently pays a quarterly dividend of C$0.2715 per share for a dividend yield of 5.50%, as of November 28.
In addition to some of the best dividend stocks like General Mills, Inc. (NYSE:GIS), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP), Pembina Pipeline Corporation (NYSE:PBA) is another good option for dividend portfolios.
In November, National Bank raised its price target on Pembina Pipeline Corporation (NYSE:PBA) to C$46 with a Sector Perform rating on the shares.
At the end of Q3 2022, 17 hedge funds tracked by Insider Monkey owned stakes in Pembina Pipeline Corporation (NYSE:PBA), up from 14 in the previous quarter. The collective value of these stakes is over $81 million.
ClearBridge Investments mentioned Pembina Pipeline Corporation (NYSE:PBA) in its Q1 2022 investor letter. Here is what the firm has to say:
“On a regional basis, the U.S. and Canada were the top contributors to quarterly performance. Pembina Pipeline, which provides transportation and midstream services for the energy industry in North America, was also up on greater LNG demand. The hiring of Scott Burrows as permanent CEO and Jaret Sprott as COO and reaffirmation of its corporate strategy also boosted investor sentiment. On an individual stock basis, the largest contributors to absolute returns in the quarter includes Pembina Pipeline.”
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Disclosure. None. 11 Best Canadian Dividend Stocks To Buy Now is originally published on Insider Monkey.