10 High-Growth Canadian Dividend Stocks to Invest In

In this article, we discuss 10 high-growth Canadian dividend stocks to invest in.

The recent collapse of Silicon Valley Bank (SVB) also caused Canadian stocks to plunge, with the country’s main stock index falling by 0.9% on March 13 as global investors dumped riskier investments. In 2022, the S&P/TSX Composite Index outperformed its American counterpart, falling by 8.5% as of December 30, 2022, compared with a much harsher 19% drop in the S&P 500.

Even with this outperformance, analysts are expecting the Canadian economy to contract this year. According to a report by Deloitte, a US recession will take down Canadian economic growth for three consecutive quarters, with an expected overall contraction of 0.9%. However, this recession will be relatively mild in comparison with the previous market downturns, the professional services company noted. This current stock market’s condition has called for investment in dividend equities because they can generate stable income for investors.

According to a report by RBC Global Asset Management, dividends have represented 30% of the total return from the Canadian equity market. The report also mentioned that dividends accounted for 39% of the market’s total return over the last 10 years. In the current environment, it is imperative to gauge the performance of dividend stocks relative to inflation. The report by the same capital market company highlighted that the S&P/TSX Dividends delivered an annual average return of 7.9% in the last 20 years, widely outpacing inflation which returned at an annual average rate of 2.2%.

Overall, dividend stocks in Canada have shown a strong performance in comparison to their peers. Especially companies that have raised their dividends for a significant period remained big winners. Another report published by RBC revealed that dividend growers delivered a compound annual return of 10.8% from 1986 to 2022, compared with a 9.1% return from the dividend-payers. During this period, the S&P/TSX Composite Index returned 6.2%, falling behind dividend growers by a wide margin. The report has additionally mentioned that dividend growers have displayed less volatility of 13.3% during this period, compared with a 23.4% volatility of non-dividend stocks. To enhance and diversify their portfolios, investors are advised to expand their investments in different regions. For this, readers can have a look at the 11 Most Profitable Canadian Stocks.

While famous US dividend stocks like General Mills, Inc. (NYSE:GIS), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) have grabbed investors’ attention, Canadian dividend stocks are also reliable investment options for income investors. In this article, we will discuss high-growth Canadian dividend stocks to invest in.

Photo by Nicholas Cappello on Unsplash

Our Methodology:

For this list, we selected Canadian dividend stocks that have been paying dividends for at least ten years. From those companies, we shortlisted stocks that have a 5-year average annual dividend growth rate above 6%. The stocks are ranked in ascending order of their dividend growth rates.

10 High-Growth Canadian Dividend Stocks to Invest In

10. Enbridge Inc. (NYSE:ENB)

5-Year Average Annual Dividend Growth Rate: 6.3%

Dividend Yield as of March 15: 7.32%

Enbridge Inc. (NYSE:ENB) is a Canadian multinational pipeline and energy company that operates pipelines throughout Canada and the US. In the fourth quarter of 2022, the company reported revenue of $10 billion, which showed a 2.40% growth from the same period last year. In FY22, it generated over $11.2 billion in operating cash flow, up from $9.3 billion in 2021.

Enbridge Inc. (NYSE:ENB) is one of the high-growth Canadian dividend stocks on our list as the company has raised its payouts at an annual average rate of 6.3%. Overall, the company has been paying regular dividends to shareholders for 67 years. It currently offers a quarterly dividend of $0.8875 per share and has a dividend yield of 7.32%, as of March 15. The company can be added to dividend portfolios alongside some American dividend stocks like General Mills, Inc. (NYSE:GIS), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP).

In January, National Bank raised its price target on Enbridge Inc. (NYSE:ENB) to C$56 and maintained a Sector Perform rating on the shares, highlighting the company’s overall performance.

At the end of Q4 2022, 21 hedge funds tracked by Insider Monkey reported having stakes in Enbridge Inc. (NYSE:ENB), compared with 24 in the previous quarter. These stakes have a total value of over $2.6 billion. Among these hedge funds, GQG Partners was the company’s leading stakeholder in Q4.

9. Royal Bank of Canada (NYSE:RY)

5-Year Average Annual Dividend Growth Rate: 6.6%

Dividend Yield as of March 15: 4.14%

Royal Bank of Canada (NYSE:RY) is a Toronto-based multinational financial services company and one of the largest banks in the country. In February, Desjardins raised its price target on the stock to C$147 and maintained a Buy rating on the shares, highlighting the company’s outperformance.

On March 1, Royal Bank of Canada (NYSE:RY) declared a quarterly dividend of C$1.32 per share, which fell in line with its previous dividend. The company has raised its dividends consistently since 2012, which makes it one of the high-growth Canadian dividend stocks. Moreover, its 5-year average annual dividend growth rate stands at 6.6%. The stock has a dividend yield of 4.14%, as of March 15.

In fiscal Q1 2023, Royal Bank of Canada (NYSE:RY) reported revenue of C$15.09 billion, up 15.5% growth from the same period last year. The company paid nearly $1.8 billion in dividends to shareholders during the quarter.

The number of hedge funds tracked by Insider Monkey owning stakes in Royal Bank of Canada (NYSE:RY) grew to 17 in Q4 2022, from 14 in the previous quarter. The collective value of these stakes is over $147.2 million.

8. TELUS Corporation (NYSE:TU)

5-Year Average Annual Dividend Growth Rate: 6.7%

Dividend Yield as of March 15: 5.29%

TELUS Corporation (NYSE:TU) is a telecommunications company, based in Vancouver, Canada. The company provides a wide range of related services and products to its consumers. The company has had a run of paying regular dividends to shareholders since 2004 and has raised its payouts at an annual average rate of 6.7% in the past five years. The company offers a quarterly dividend of C$0.3511 per share and has a dividend yield of 5.29%, as recorded on March 15.

Following the company’s recent quarterly earnings, JPMorgan maintained an Overweight rating on the shares with a C$33 price target.

In the fourth quarter of 2022, TELUS Corporation (NYSE:TU) reported revenue of C$5 billion, which was up by 4% from the same period last year. The company’s free cash flow grew by 64% in FY22 to $1.3 billion, which shows that the company’s cash position is strong.

At the end of December 2022, 17 hedge funds in Insider Monkey’s database owned stakes in TELUS Corporation (NYSE:TU), worth over $255 million collectively. With over 3.5 million shares, Schonfeld Strategic Advisors was the company’s leading stakeholder in Q4.

7. The Toronto-Dominion Bank (NYSE:TD)

5-Year Average Annual Dividend Growth Rate: 7.98%

Dividend Yield as of March 15: 4.86%

The Toronto-Dominion Bank (NYSE:TD) is a multinational banking and financial services company that offers a wide range of banking services to its consumers. Scotiabank upgraded the stock to Outperform in March with a C$104 price target, appreciating the company’s earnings.

The Toronto-Dominion Bank (NYSE:TD), one of the high-growth Canadian dividend stocks on our list, has been raising its dividends consistently for the past eight years. Its 5-year average dividend growth rate stands at 7.98%. The company currently offers a quarterly dividend of C$0.96 per share for a dividend yield of 4.86%, as of March 15.

In fiscal Q1 2023, The Toronto-Dominion Bank (NYSE:TD) reported revenue of C$13 billion, which showed a 16% growth from the same period last year. The company’s net income for the quarter came in at over C$1.58 billion.

At the end of the December quarter of 2022, 17 hedge funds in Insider Monkey’s database reported owning stakes in The Toronto-Dominion Bank (NYSE:TD), compared with 22 in the previous quarter. These stakes have a consolidated value of over $185.6 million.

6. Sun Life Financial Inc. (NYSE:SLF)

5-Year Average Annual Dividend Growth Rate: 9.19%

Dividend Yield as of March 15: 4.74%

Another high-growth Canadian dividend stock on our list is Sun Life Financial Inc. (NYSE:SLF), which is a financial services company in Canada. The company mainly specializes in insurance-centric services for its consumers. The company currently pays a quarterly dividend of C$0.72 per share and has a dividend yield of 4.74%, as of March 15. It has grown its payouts at an annual average rate of 9.19% in the past five years.

General Mills, Inc. (NYSE:GIS), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) are some other popular dividend stocks that are grabbing investors’ attention.

In the fourth quarter of 2022, Sun Life Financial Inc. (NYSE:SLF) posted an EPS of C$1.69, which beat Street estimates by C$0.16. At the end of December 2022, the company had approximately $423 million available in cash and cash equivalents. In FY22, it returned over $1.6 billion to shareholders in dividends.

In February, Barclays raised its price target on Sun Life Financial Inc. (NYSE:SLF) to C$76 with an Overweight rating on the shares.

As of the close of Q4 2022, 9 hedge funds tracked by Insider Monkey reported having stakes in Sun Life Financial Inc. (NYSE:SLF), with a total value of over $225.4 million.

5. Manulife Financial Corporation (NYSE:MFC)

5-Year Average Annual Dividend Growth Rate: 9.62%
Dividend Yield as of March 15: 5.96%

Manulife Financial Corporation (NYSE:MFC) is a Toronto-based multinational insurance company that also provides financial services to its consumers. on February 15, the company declared an 11% hike in its quarterly dividend to C$0.365 per share. This marked the company’s tenth consecutive year of dividend growth, which places it as one of the high-growth Canadian dividend stocks on our list. In the past five years, it has raised its payouts at an annual average rate of 9.62%. As of March 15, the stock has a dividend yield of 5.96%.

In February, Barclays raised its price target on Manulife Financial Corporation (NYSE:MFC) to C$31 and maintained an Overweight rating on the shares.

At the end of Q4 2022, Manulife Financial Corporation (NYSE:MFC) was a part of 10 hedge fund portfolios, according to Insider Monkey’s database. The stakes owned by these hedge funds have a total value of over $118.4 million.

Harding Loevner mentioned Manulife Financial Corporation (NYSE:MFC) in its Q2 2022 investor letter. Here is what the firm has to say:

“Manulife Financial Corporation (NYSE:MFC), the Canadian life insurer operating primarily in North America and Asia, is a new holding. Manulife offers a full suite of life insurance products as well as retirement and wealth management services. While the wealth management and retirement products appeal to the aging populations of the Western world, long-term life insurance products address the needs of the growing number of middle-class families in places like China and southeast Asia. COVID-19-induced lockdowns in China brought the shares down to a significant discount to our estimate of long-term value. The holding now serves as a nice diversifier to our Asia-centered insurers AIA and Ping An.”

4. Canadian National Railway Company (NYSE:CNI)

5-Year Average Annual Dividend Growth Rate: 11.2%
Dividend Yield as of March 15: 1.99%

Canadian National Railway Company (NYSE:CNI) is a transport company that provides services in trucking and rail shipping. In January, BMO Capital maintained an Outperform rating on the stock with a C$180 price target, appreciating the company’s earnings.

Canadian National Railway Company (NYSE:CNI) currently pays a quarterly dividend of C$0.79 per share, raising it by 7.8% on January 24. Through this increase, the company took its dividend growth streak to 23 years, coming through as one of the high-growth Canadian dividend stocks on our list. The stock’s dividend yield on March 15 came in at 1.99%.

As of the close of Q4 2022, 41 hedge funds tracked by Insider Monkey held stakes in Canadian National Railway Company (NYSE:CNI), worth over $13 billion collectively.

3. Imperial Oil Limited (NYSE:IMO)

5-Year Average Annual Dividend Growth Rate: 18.8%
Dividend Yield as of March 15: 2.86%

Imperial Oil Limited (NYSE:IMO) is a Canadian petroleum refineries company, which is the subsidiary of America’s oil company, ExxonMobil. The company is one of the best high-growth dividend stocks on our list as it has raised its payouts for consecutive 28 years. Moreover, the company has rewarded shareholders with regular dividends for over 100 years. It currently pays a quarterly dividend of C$0.44 per share and has a dividend yield of 2.86%. In the past five years, the company has raised its payouts at an annual average rate of 18.8%.

Raymond James raised its price target on Imperial Oil Limited (NYSE:IMO) to C$74 in February with a Market Perform rating on the shares.

The number of hedge funds tracked by Insider Monkey owning stakes in Imperial Oil Limited (NYSE:IMO) grew to 23 in Q4 2022, from 19 in the previous quarter, as per Insider Monkey’s database. These stakes have a consolidated value of over $164.6 million.

2. Canadian Natural Resources Limited (NYSE:CNQ)

5-Year Average Annual Dividend Growth Rate: 22.6%
Dividend Yield as of March 15: 5.22%

Canadian Natural Resources Limited (NYSE:CNQ) is an oil and natural gas company that mainly specializes in crude oil. On March 2, the company raised its quarterly dividend by 6% to C$0.90. This was the company’s 24th consecutive year of dividend growth. Its 5-year average annual dividend growth rate stands at 22.6%, which makes it one of the high-growth Canadian dividend stocks on our list. The stock has a dividend yield of 5.22%, as of March 15.

In January, Stifel initiated its coverage on Canadian Natural Resources Limited (NYSE:CNQ) with a Buy rating and a C$97 price target. The firm sees significant value in oil and gas equities even during an inflationary environment.

At the end of Q4 2022, 41 hedge funds tracked by Insider Monkey reported having stakes in Canadian Natural Resources Limited (NYSE:CNQ), the same as in the previous quarter. These stakes have a total value of over $1.8 billion.

1. Agnico Eagle Mines Limited (NYSE:AEM)

5-Year Average Annual Dividend Growth Rate: 30.6%
Dividend Yield as of March 15: 3.32%

Agnico Eagle Mines Limited (NYSE:AEM) tops our list of high-growth Canadian dividend stocks. The company is mainly engaged in the mining and exploration of gold and other commodities. It has been paying regular dividends to shareholders since 1983 and has raised its payouts at an annual average rate of 30.6% in the past five years. The company currently pays a quarterly dividend of $0.40 per share and has a dividend yield of 3.32%, as of March 15.

At the end of December 2022, 41 hedge funds tracked by Insider Monkey owned stakes in Agnico Eagle Mines Limited (NYSE:AEM), up from 39 in the previous quarter. These stakes have a total value of over $613.7 million.

Old West Management mentioned Agnico Eagle Mines Limited (NYSE:AEM) in its Q4 2022 investor letter:

“Agnico Eagle Mines Limited (NYSE:AEM) is the third largest gold miner in the world with mines in Canada, Australia, Finland, and Mexico. Although we have long respected the company, we became shareholders when they acquired our portfolio holding, Kirkland Lake Gold. Agnico chairman Sean Boyd is one of the most respected executives in the mining industry. He was appointed CEO in 1998 and was recently appointed Executive Chairman. Boyd is a large shareholder and perfectly fits our owner/manager role. This year the company is projected to make nearly $1 billion in net income on $5.8 billion in revenue with $758 million of free cash flow. Net income has been growing 15% per year for several years. Agnico has a fortress balance sheet with $1.3 billion of long term debt, which is only 2 times EBITDA, and $820 million cash in the bank. The stock trades at $55 per share, which is 26 times earnings with a 2.9% dividend yield.”

You can also take a look at 10 Best Stocks to Buy for the Next 10 Years and 15 Under-the-Radar High Dividend Stocks to Buy

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Disclosure. None. 10 High-Growth Canadian Dividend Stocks to Invest In is originally published on Insider Monkey.