As the Canadian economy navigates a period of rate cuts by the Bank of Canada, aimed at supporting growth amid rising inflation and a softening labor market, investors are increasingly looking towards dividend stocks for stability and income. In this environment, selecting dividend stocks with strong fundamentals can offer a reliable income stream while potentially mitigating some of the risks associated with economic uncertainties.
|
Name |
Dividend Yield |
Dividend Rating |
|
Sun Life Financial (TSX:SLF) |
4.32% |
★★★★★☆ |
|
Russel Metals (TSX:RUS) |
4.13% |
★★★★★☆ |
|
Royal Bank of Canada (TSX:RY) |
3.23% |
★★★★★☆ |
|
Rogers Sugar (TSX:RSI) |
5.63% |
★★★★☆☆ |
|
Power Corporation of Canada (TSX:POW) |
4.24% |
★★★★★☆ |
|
North West (TSX:NWC) |
3.16% |
★★★★★☆ |
|
National Bank of Canada (TSX:NA) |
3.11% |
★★★★★☆ |
|
Magna International (TSX:MG) |
4.21% |
★★★★★☆ |
|
Canadian Imperial Bank of Commerce (TSX:CM) |
3.83% |
★★★★★☆ |
|
Bank of Montreal (TSX:BMO) |
4.11% |
★★★★★☆ |
Click here to see the full list of 21 stocks from our Top TSX Dividend Stocks screener.
Let’s take a closer look at a couple of our picks from the screened companies.
Simply Wall St Dividend Rating: ★★★★☆☆
Overview: Peyto Exploration & Development Corp. operates in the exploration, development, and production of natural gas, oil, and natural gas liquids in Alberta’s deep basin with a market cap of CA$3.82 billion.
Operations: Peyto Exploration & Development Corp.’s revenue primarily stems from its oil and gas exploration and production activities, generating CA$968.18 million.
Dividend Yield: 6.9%
Peyto Exploration & Development offers a dividend yield of 6.94%, placing it in the top 25% of Canadian dividend payers. However, its dividends are not well covered by free cash flow, with a high cash payout ratio of 95.8%. Despite earnings growth and good relative value, the company’s dividends have been volatile over the past decade. Recent earnings reports show increased revenue and net income, yet significant insider selling raises concerns about future stability.
Simply Wall St Dividend Rating: ★★★★★☆
Overview: Power Corporation of Canada is an international management and holding company offering financial services across North America, Europe, and Asia, with a market capitalization of CA$36.87 billion.
Operations: Power Corporation of Canada’s revenue segments include CA$3.63 billion from IGM, CA$36.14 billion from Lifeco, and CA$2.64 billion from Alternative Asset Investment Platforms.
Dividend Yield: 4.2%
Power Corporation of Canada recently affirmed a quarterly dividend of C$0.6125 per share, supported by stable earnings and a low cash payout ratio of 34.5%. The company’s dividends have grown steadily over the past decade with minimal volatility, although its 4.24% yield is lower than the top Canadian dividend payers. Trading at nearly 30% below estimated fair value, it offers good relative value despite recent insider selling and ongoing share buybacks totaling C$136 million.
Simply Wall St Dividend Rating: ★★★★☆☆
Overview: Rogers Sugar Inc. is involved in the refining, packaging, marketing, and distribution of sugar, maple, and related products across Canada, the United States, Europe, and internationally with a market cap of CA$818.65 million.
Operations: Rogers Sugar Inc.’s revenue is derived from two main segments: CA$1.04 billion from sugar and CA$259.71 million from maple products.
Dividend Yield: 5.6%
Rogers Sugar Inc. offers a stable dividend yield of 5.63%, though it falls short of the top Canadian payers. Despite no growth in dividends over the past decade and significant insider selling recently, its payout ratios suggest sustainability, with earnings covering 66.5% and cash flows 44%. The company’s financial position is burdened by high debt levels, yet recent earnings growth of 47.2% and consistent sales outlook bolster its dividend reliability amidst market challenges.
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Investigate our full lineup of 21 Top TSX Dividend Stocks right here.
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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:PEY TSX:POW and TSX:RSI.
This article was originally published by Simply Wall St.
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