Top Canadian Dividend Stocks – Is There Anything Good Besides Banks?

If you are Canadian and you are looking to invest in dividend stocks, I am ready to bet my first born (not really!) that you have Canadian banks in your portfolio. Why? Because Canadian Banks have several awesome qualities any dividend investor is looking for:

– They are leaders in their industry (they are actually part of the most solid banks in the world).

– They are steady dividend payers (they can’t qualify as dividend aristocrats, but they are still pretty solid).

– They show steady revenue and profit growth.

– Competition is protected and legislated by strict government laws (which improve their chances of having steady financial results!).

– They pay more than 3% in dividends (and are now starting to increase their dividends again since 2008!).

And on top of that, some of them (think about National Bank: NA) are reporting great growth for what is considered a “mature” market.

But is there anything else to buy in Canada for dividend investors?

Oohhh… that’s a good question! I am also a big fan of Canadian banks…. But this is far from being enough if you want to build a solid investment portfolio.

Then you have 2 choices… high dividend yield stocks or solid companies with lower dividend yields?

If you take option #1, I suggest you take a look at the high yield Canadian dividend stocks list over at What is Dividend. The list was created by looking at the highest dividend yield stocks on the Canadian market with no other criteria. In other words, it is to be used at your own risk ;-). However, I would take a closer look at the first stock on the list: CFX: Canfor Pulp Products. The stock is literally on fire and pays high dividends. On the other hand, I haven’t looked at their financials yet so I could not write much about it… I was just surprised when I looked at it this morning. First National: FN could be interesting as well as they work in the Canadian mortgage industry (all right, almost like a bank ;-0 ).

Option #2 look among the best Canadian Dividend Stocks

I maintain 2 lists over @ The Financial Blogger:

Top 10 Canadian Dividend Stocks

Top 20 Canadian Dividend Stocks

The difference between the 2 lists is the criteria. The top 10 is way more selective since it includes dividend growth over 5 years along with a dividend payout ratio under 60%. But since following 10 stocks is sometimes not enough, I have decided to add a second list quarterly with different criteria. My favorites among them? Here they are:

NPR – Northern Property Real Estate Investment Trust

I have already mentioned that Canadian REITs could be a great investment in your portfolio. Well, one of the strongest Canadian Dividend Stocks is Northern Property Real Estate Investment Trust. Strong with a P/E ratio under 12 (which has become rare on the Canadian market), NPR is ranked second in the Top 10 Canadian Dividend Stocks according to my list. The current dividend yield is 5.36% with a dividend payout ratio of 57%

SJR – Shaw Communications

As I mentioned in my article about sector investing, I am a strong believer of choosing the right industry before choosing the right stock. Anything that touches the internet and telecommunication these days will grow in my opinion. Technologies have never evolved so fast and all distributors will greatly benefit from it. The current dividend yield is 4.78% and dividend payout ratio of 69.85%

POW – Power Corp

I like Power Corp as it is a very well diversified financial corporation. Under its umbrella, let’s just mention Investors Group, Great West and London Life. I have worked in a partnership with this company and I can attest to the strength of their upper management. This certainly one of the most steady dividend stocks in Canada. The current dividend yield is 4.09% and dividend payout ratio of 61.32%

T – Telus

With employers opening up to home offices and communications across their multiple offices, I think that Telus can play an interesting role in managing telecommunication for companies. Along with that, the cell phone market seems unstoppable with the multiple gadgets we find on the market (iPhone, wifi tablets, BlackBerries, etc.). The current dividend yield is 4.28% and dividend payout ratio of 62.09%

Have a look at the 2 lists, tell me which are your favourite Canadian Dividend
Stocks for 2011?

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  1. Traciatim says

    I’ve always wondered if a simple filter could produce a decent return and a nice simple way to find dividend payers. For instance, grab a list of all Canadian dividend payers and run it through two separate filters:

    1) Grab all companies that have a yield that is within 1 standard deviation above average.

    2) Grab all companies that have their payout ratio 1 standard deviation below average.

    3) Cross Reference these lists and buy the companies that are on both lists.

    I’m not sure if I’m using the standard deviation correctly, but wouldn’t that give you two lists of about 34% of all dividend payers and then cut that down to get lower payout ratios.

    Is there any software that can do filters like this or at least if you found the filter manually to back test the results?

  2. Think Dividends says

    You have no clue what you are talking about when it comes to REITs.

    P/E ratio is 100% meaningless.

    It’s all about Price/FFO, Price/AFFO and Price/NAV.

    You won’t find any of these metrics on G&M, Yahoo or Google Finance.

  3. Mike says


    Not sure there is a software for that but it would be interesting to have one and see how those stocks did overtime…

    @ Think Dividends,
    You are right, Price/FFO and Price/AFFO are better indicators than P/E ratio for REITs. Wrote this post too fast. my bad!

  4. says

    Mike, personally, a yield of about 4% or better worries me a bit. If someone is willing to pay me over 4% when interest rates are at about zero, I’m going to wonder like heck if they know something I don’t know. Is there a yield you would consider too high, or that would set your alarm bells off?

  5. Mike says

    @Sigma Swan,
    Since 2008, I think we are in the middle of a unique investing opportunity. Historically, Canadian Banks always paid a dividend covering the inflation (between 2 to 3%). Now, some of them are paying 4% dividend yield but they still show a low P/E ratio and a low dividend payout ratio. On top of that, they show positive revenue growth. This is why I don’t think that 4% is too much right now.

    I’m starting to be more cautious when the dividend yield comes close to 5%.

  6. Dabcan says

    Can for does not pay 18%, that chart is old, and was even wrong when originally published. I believe they pay around 8% right now, quite a big difference.

  7. Mike says


    you are right, I think there was a problem when we pulled out our results from Excel. I’ll look into it and update all dividend list this week.



  8. Cubanpete says

    Well DGI is a great company in Brampton and it’s paying right now over 12% you should check it out


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