As the Canadian economy navigates a landscape of improving labour productivity and stable inflation, investors are keeping a close eye on dividend stocks that offer attractive yields. In this context, finding stocks with solid earnings growth and sustainable dividends can be particularly appealing, providing both income and potential resilience in uncertain market conditions.
|
Name |
Dividend Yield |
Dividend Rating |
|
Sun Life Financial (TSX:SLF) |
4.49% |
★★★★★☆ |
|
Russel Metals (TSX:RUS) |
4.33% |
★★★★★☆ |
|
Royal Bank of Canada (TSX:RY) |
3.35% |
★★★★★☆ |
|
Power Corporation of Canada (TSX:POW) |
4.32% |
★★★★★☆ |
|
North West (TSX:NWC) |
3.31% |
★★★★★☆ |
|
National Bank of Canada (TSX:NA) |
3.21% |
★★★★★☆ |
|
Magna International (TSX:MG) |
4.59% |
★★★★★☆ |
|
Canadian Natural Resources (TSX:CNQ) |
5.70% |
★★★★★☆ |
|
Canadian Imperial Bank of Commerce (TSX:CM) |
3.87% |
★★★★★☆ |
|
Bank of Montreal (TSX:BMO) |
4.19% |
★★★★★☆ |
Click here to see the full list of 22 stocks from our Top TSX Dividend Stocks screener.
Below we spotlight a couple of our favorites from our exclusive screener.
Simply Wall St Dividend Rating: ★★★★★☆
Overview: Bank of Montreal offers diversified financial services primarily in North America, with a market cap of CA$112.07 billion.
Operations: Bank of Montreal generates revenue from several key segments, including BMO Capital Markets (CA$6.63 billion), BMO Wealth Management (CA$6.01 billion), U.S. Personal and Commercial Banking (CA$8.29 billion), and Canadian Personal and Commercial Banking (CA$9.77 billion).
Dividend Yield: 4.2%
Bank of Montreal’s dividend payments have been reliable and stable over the past decade, with a current yield of 4.19%. The payout ratio stands at 58.3%, indicating dividends are well-covered by earnings, and this is expected to improve to 51.2% in three years. Despite trading below estimated fair value, its dividend yield is lower than the top quartile in Canada. Recent strategic moves include fixed-income offerings and digital platform enhancements through partnerships like My Financial Progress.
Simply Wall St Dividend Rating: ★★★★★☆
Overview: The North West Company Inc. operates as a retailer of food and everyday products and services in northern Canada, rural Alaska, the South Pacific, and the Caribbean, with a market cap of CA$2.30 billion.
Operations: The North West Company Inc. generates its revenue primarily from its CA$2.60 billion segment focused on the retail of food and everyday products and services across northern Canada, rural Alaska, the South Pacific, and the Caribbean.
Dividend Yield: 3.3%
North West Company offers a stable dividend history with payments increasing over the past decade. The dividend yield of 3.31% is lower than Canada’s top quartile, but dividends are well-covered by earnings and cash flows, with payout ratios of 55.3% and 64.9%, respectively. Recent earnings showed modest growth, while the appointment of Gregg Saretsky to the board may enhance strategic oversight given his extensive corporate experience in aviation sectors.
Simply Wall St Dividend Rating: ★★★★☆☆
Overview: Wajax Corporation operates in Canada, offering industrial products and services, with a market cap of CA$476.23 million.
Operations: Wajax Corporation generates revenue from three main segments: Equipment sales at CA$1.09 billion, Product support at CA$570 million, and Industrial parts and services at CA$650 million.
Dividend Yield: 6.4%
Wajax’s dividend yield is among the top 25% in Canada, but its history of volatile payments over the past decade raises concerns about reliability. Despite this, dividends are well-covered by cash flows with a low cash payout ratio of 23.4%, though earnings coverage is tighter at an 84.7% payout ratio. Recent earnings show a decline in profit margins and net income, impacting financial stability and dividend sustainability.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include TSX:BMO TSX:NWC and TSX:WJX.
This article was originally published by Simply Wall St.
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