In this article, we list and discuss the best dividend stocks in Canada for 2022.
Canadian dividend stocks is an assuring way to grow your wealth and achieve financial independence in the long term.
They are an excellent choice when you’re looking for regular, reliable, and growing income that will enable you to reinvest more money in your portfolio.
Anyone can invest in dividend stocks but not everyone knows how to invest.
This is because it goes beyond having the capital and identifying the best dividend stocks to invest in.
When you’re considering investing in the best Canadian dividend stocks, there are a couple of things you should consider for the best ROI.
In this piece, we cover everything you need to know before investing in dividend stocks to help you make an informed decision on your investment.
20 Best High Dividend Stocks in Canada
Canadian dividend stocks can help you achieve financial freedom. However, finding the right ones with high dividends can be daunting too.
Whether you’re looking to make your first stock investment or make some new investments, you need to understand the best dividend stocks to make the right choice for your portfolio.
Here are the best Canadian dividend stocks for 2022 based on December 2021 data:
20. Alimentation Couche-Tard (ATD.B)
Dividend Yield = 0.87%
Alimentation Couche-Tard is a major Canadian company that owns several convenience stores around the country.
In addition to providing road transportation fuel to nearly 1,300 locations throughout the United States, Alimentation Couche-Tard also provides stationary energy and aviation fuel.
Daily, this company serves more than 9 million consumers around the world with goods and services.
In the United States, Couche-Tard has approximately 10,000 branches across 48 states, with ten branches in Canada and other countries.
Couche-Tard has responded to evolving consumer tastes and desires through almost four decades of practice and has a track record of profitable acquisitions.
19. Canadian National Railway (CNR.TO)
Dividend Yield = 1.66%
Canadian National Railway provides rail and transportation services with one of the lowest operating margins of all publicly listed railroad firms in the United States.
Although with a low dividend yield, the Canadian National Railway dividend growth trend has been reasonably good over the last five years.
It also has a 15.6% dividend growth rate for ten years, a 15.9% dividend growth rate for fifteen years, and a 16% dividend growth rate for 20 years.
Canadian National Railway regularly raises dividends to attract and maintain its shareholders. This way, 10-year stock investment will yield a significant increase in the stock price and high yield.
18. Intact Financial (IFC.TO)
Dividend Yield = 2.21%
Intact Financial is an insurance service provider. It offers home and business insurance products such as personal auto, commercial auto, and personal property.
Over the last few months, the PE ratio has dipped significantly. However, the stock may be slightly overpriced for some dividend investors around a 20 PE ratio.
However, some stocks would remain costly. Based on its historical price changes, the stock price of Intact Financial has been relatively steady since the financial crisis.
Intact Financial has given a 68.27% return over the last five years. Hence, we chose Intact Financial as one of the best Canadian dividend stocks because of its strong stock price appreciation.
17. Brookfield Renewable Corp (BEPC.TO)
Dividend Yield = 2.75%
Brookfield Renewable Corp. is a Canadian company aimed to give investors more flexibility in accessing BEP’s diversified portfolio of high-quality renewable energy assets globally.
Brookfield Renewable Corp is one of the world’s largest renewable energy networks, with a portfolio of 19,00 MW of installed capacity spread throughout Europe, Asia, Latin America and North America.
Despite the economic setbacks in 2020, the stock price of Brookfield Renewable Corp increased by over 45%.
BEPC’s stock has been declining in recent months, making it a decent entry point for investors seeking to add it to their portfolio.
Brookfield Renewable Corp has been steadily increasing its dividend payouts despite the low dividend yield.
Because of the macro renewable energy change and BEPC’s position as a global leader in renewable power platforms, including BEPC in your dividend portfolio will pay off in the long run.
16. National Bank (NA.TO)
Dividend Yield = 3.2%
National Bank is Canada’s sixth-biggest bank. Its main market is Quebec, which accounts for 62% of its sales, but the bank has recently spread to the rest of the country.
Despite being a smaller bank than five big banks, National Bank has expanded by concentrating on wealth management and the capital market.
What’s more noteworthy than its solid organic dividend growth over the last ten years is the fact its stock price has risen steadily over the previous five years.
Accordingly, if you had purchased National Bank five years earlier, the stock price would have increased by more than 110%.
15. Royal Bank (RY.TO)
Dividend Yield = 3.69%
With over 620,000 customers, Royal Bank is Canada’s largest bank with diversified financial services.
The company offers personal and commercial banking, insurance, wealth management, investment services, and products and services for capital markets globally.
In Canada, the United States, and approximately 40 other countries, Royal Bank serves personal, businesses, institutions and public sector clients.
Royal Bank segments include capital market, personal and commercial banking,
Since 1870, Royal Bank has been paying dividends to its shareholders. Also, the company’s dividend payment has been impressive for all these years.
14. Fortis (FTS.TO)
Dividend Yield = 3.8%
Fortis Inc. is a holding company for electric and gas utilities based in Canada. Regulated Utilities and Non-Regulated Utilities are two of the company’s divisions.
Arizona, Alberta, British Columbia, Ontario and New York are just a few places Fortis serves.
Because of its long dividend raise streak and steady generation of sustainable cash flow, we included Fortis as one of the best Canadian dividend stocks.
Fortis dividends can be compared to bond interest in Canada. This is because, besides cooking, several Canadians use electricity or natural gas to heat their homes, making Fortis a reliable stock to invest in.
13. TD Bank (TD.TO)
Dividend Yield = 3.81%
The Toronto-Dominion Bank is the fifth-largest bank in North America and one of Canada’s major banks.
TD Bank is a financial services company that operates online and has over 14 million clients. Its branches include Canada Retail, United States Retail and Corporate Wholesale Banking.
With over 2,300 retail stores across North America, TD has a significant retail reach. It’s no surprise that it has so many branches in Vancouver too.
Individuals, financial institutions, businesses, government, and non-governmental organizations may use the bank for banking, consulting, and discount brokerage services.
12. Algonquin Power & Utilities Corp (AQN.TO)
Dividend Yield = 4.04%
Algonquin Power & Utilities Corp. is a diversified utility and renewal energy corporation in Canada with properties spread across North America.
Through its two operating divisions, Liberty Power and Liberty Utilities, Algonquin largely invests in utility, hydroelectric, solar power plants and wind.
Algonquin Power, a rapidly expanding renewable energy corporation, has a strong portfolio of long-term contracted solar, hydroelectric properties and wind totalling 1.5 GW of installed capacity.
Across North America, the company operates more than 50 power generation facilities and 20 utilities.
It also serves about 770,000 clients across twelve states in the United States.
11. Telus (T.TO)
Dividend Yield = 4.76%
Telus is one of Canada’s top three telecommunications firms, with headquarters in Vancouver, British Columbia.
Wireless and wireline voice and data are among the telecommunications services and products offered by the company.
The company has almost 11 million customers and has nearly doubled its dividend annually since 2002.
Telus has been diversifying its business outside telecommunications by providing telehealth, television services and home security.
Telus should increase the level of service and even attract more customers as its 5G infrastructures come to life.
10. Choice Properties Real Estate Investment Trust (OTC:PPRQF)
Dividend Yield = 5.06%
Choice Property is a Canadian open-ended REIT and unincorporated real estate investment trust. This company focuses on commercial and residential properties.
The company has partnered with Loblaw Companies Limited to build a highly diversified portfolio of leased retail properties.
9. TransAlta Renewables Inc. (OTC:TRSWF)
Dividend Yield = 5.13%
As a Canadian hydroelectric power generation company, TransAlta Renewables Inc. (OTC:TRSWF) is one of the top-performing dividend stocks in the country, with a 5.13% dividend yield.
The company is involved in acquiring renewable power generation instruments for construction or operation. It operates through:
- Canadian Hydro
- Canadian Wind
- Canadian Gas
8. BCE Inc. (NYSE:BCE)
Dividend Yield = 5.55%
As a mass media and telecommunication company, BCE Inc. (NYSE:BCE) offers one of the industry’s highest dividends, 5.55%.
This company offers mobile telephony, digital television, fixed-line, radio broadcasting, Internet and print services.
As of November 4, 2032, BCE Inc. (NYSE:BCE) declared CAD0.875 per share dividend payable to shareholders on January 15,2022.
7. Suncor Energy Inc. (NYSE:SU)
Dividend Yield = 5.56%
As a Calgary-based oil and gas company, Suncor Energy Inc. (NYSE:SU) offers natural gas, crude, petroleum, petrochemical etc. Its 5.56% dividend makes it one of the best dividend stocks in Canada.
The 2022 Suncor Energy Inc. (NYSE:SU)’s guidance aims for capital and cost discipline as well as high operational performance on all assets.
The guidance also backs the preceding announcements on share increase, dividend doubling, etc.
6. Superior Plus Corp. (OTC:SUUIF)
Dividend Yield = 5.57%
As a distillates, propane and other products and services distributor, Superior Plus Corp. (OTC:SUUIF) offers one of the best yields on dividend stocks in Canada, 5.57%.
That said, Superior Plus Corp. (OTC:SUUIF) serves US and Canadians in about 780,000 locations.
On December 9, 2021, the company declared a monthly dividend of CAD0.06 per share payable on January 14, 2022.
5. Capital Power Corporation (OTC:CPXWF)
Dividend Yield = 5.65%
As an Edmonton-based independent power company, Capital Power Corporation (OTC:CPXWF) acquires multi-energy source power generation facilities.
On October 26, the company declared CAD$0.5475 dividends payable to stakeholders on January 31, 2022.
With 5.65% dividend yield, Capital Power Corporation (OTC:CPXWF) is our fifth best dividend stock in Canada.
4. SmartCentres Real Estate Investment Trust (OTC:CWYUF)
Dividend Yield = 5.95%
As one of the top REITs in Canada, SmartCentres Real Estate Investment Trust (OTC:CWYUF) has a 168-property portfolio split across the country.
With a 97.6% occupancy rate and 5.95% dividend yield, SmartCentres Real Estate Investment Trust (OTC:CWYUF) is our fourth best dividend stock in Canada.
3. Pembina Pipeline Corporation (NYSE:PBA)
Dividend Yield = 6.64%
As a transport, ethylene storage, oil and gas company, Pembina Pipeline Corporation (NYSE:PBA) is the third among the best dividend stocks in Canada based on our comparison.
Pembina Pipeline Corporation (NYSE:PBA) has a record of performing beyond beating estimates.
For example, it declared $0.53 per share earnings in the third quarter of 2021. This was far more than the $0.01 for the period under review.
2. Keyera Corp. (OTC:KEYUF)
Dividend Yield = 6.90%
As one of Canada’s biggest oil, gas, storage and transportation companies, Keyera Corp. (OTC:KEYUF) is our second best dividend stock in Canada due to its 6.90% dividend yield.
The company announced CAD0.16 monthly dividend per share on December 10, 2021, payable on January 17, 2022.
1. Enbridge Inc. (NYSE:ENB)
Dividend Yield = 7.23%
As a multinational oil, gas, transportation, and pipeline corporation in Canada, Enbridge Inc.
(NYSE:ENB) is our overall best dividend stock in Canada.
On December 7, 2021, Enbridge Inc. (NYSE:ENB) announced a dividend of C$0.860 per share payable to shareholders on March 1, 2022.
Our Methodology
To determine the best dividend stocks in Canada for 2022, we consider each dividend stock’s 5-year dividend growth rate compared to their current dividend yield.
Our methodology also considers analyst ratings and company fundamentals.
Precaution Before Selecting a Dividend Stock
While no investment is risk-free, stocks have more risk than other investments.
Hence, we don’t recommend investing in any of the above dividend stocks once it doesn’t suit your risk tolerance.
The truth is, there’s no 100% guarantee that all the best dividend stocks in Canada will continue to pay dividends.
You can’t also be sure of their lifespan in the industry.
As a result, most financial advisors recommend investing in a diversified portfolio of ETFs through a robo-advisor, such as Questrade.
Robo-advisors automate the investing process, allowing you to invest hands-free.
This will save you time and the cost of investing as well.
That said, you should avoid 100% stock ETFs because they’re very risky too.
Why Buy Canadian Dividend Stocks?
Before investing your money, you should understand the advantages of investing in dividend stocks and how they can benefit you.
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Income Stream
If you’re looking for a way to create a sustainable income stream, dividend stocks might be the answer.
Investing in dividend stocks is one way to create an income stream that can add up to big numbers over time.
With a steady stream of income, you’ll create an income stream that’s more reliable than interest from bonds or other interest income investments.
Knowing how to pick stocks that grow their dividends creates a passive income stream that gives you funds to do the things you love.
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Inflation Hedge
Inflation is one of the biggest risks you take when saving for the future, but you can counter this risk by investing in dividend stocks.
Dividend stocks provide capital appreciation when the market is on a bull run, unlike fixed-income investments.
Fixed-income assets have a significant drawback in that the income stream does not expand.
For example, in just 24 years, even a 3% inflation rate would have eroded 50% of your money value.
Dividend stocks help to earn income that grows and retains its purchasing power.
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Capital Preservation
One of the biggest reasons people invest in dividend stocks is that they seek capital preservation, especially during recessionary periods.
Companies that pay dividends are more profitable and mature compared to the average companies.
Also, in down markets, dividend stocks normally perform better compared to speculative stocks.
When you have money in the bank, there is no guarantee that it will be safe.
The central bank could decide to inflate prices beyond the rate at which the interest you receive follows.
Hence, inflation not only consumes your interest but your savings as well.
The major step you can take to preserve your capital investment in dividend stocks.
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Compound Returns
Dividend stocks offer compound returns as you reinvest your dividends to purchase more shares.
This is a powerful way to grow your investment over time and get the highest possible returns.
Compounding your return help, you generate wealth at a much faster rate than your traditional savings account will allow.
Investing in dividend stock can provide you with extra returns from multiple angles.
First, your investment grows due to the initial capital gain on your stocks,
Subsequently, it generates additional dividend payments on top of that growth by reinvesting your dividends.
What Makes the Best Canadian Dividend Stocks?
Choosing the stock with the greatest dividend potential can be challenging.
It involves balancing several factors at once and making predictions.
Here are some of the key features of the best Canadian dividend stocks:
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Long-term Earning History
One way to identify the best Canadian dividend stocks is by looking at the companies’ past earnings for at least five years.
This is because companies with room can only sustain sustainable and rising dividends to grow.
A company’s earnings determine whether they can pay dividends or not, as well as the dividend rate.
Also, a company’s ability to deliver continuous dividend payments depends on its earnings’ sustainability.
The best dividend stocks maintain positive and increasing earnings over time.
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Strong Sash Flows
Canadian dividends stocks are viewed as a safe investment.
That’s because they offer investors a reliable source of regular income in exchange for their capital.
However, some companies fail to pay dividends at all. While others often struggle to generate cash flows.
The best Canadian dividend stocks have strong cash flows to meet up to your entitled dividends as at when due.
By looking for dividends from well-established companies with plenty of cash reserves to cover their dividend payments, you’ll avoid disappointment and be confident in your financial security.
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Low Debt-to-Equity Ratios
When looking for the best dividend stocks to invest in, another important factor to consider is the debt-to-equity ratio.
The debt-to-equity ratio is a ratio used in finance to see how much money a company uses for debt instead of its stock investment.
The higher the debt-to-equity ratio, the more risk a company uses to fund its operations, which could lead to increased volatility and problems in future years for the business.
Low debt-to-equity ratios can give you an edge on the competition and put you on the path of higher dividend yields.
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Price Stability
If you have shares that are constantly dropping in price, then this is not a good investment.
It is essential to look for companies that give an attractive dividend yield and provide price stability so that you can remain invested in the company for years to come.
The best dividend stocks have price stability over an extended period of time amidst economic challenges.
This makes it easier for investors to look past the current market volatility and see its long-term potential.
How To Invest in Dividend Stocks in Canada?
Investing in dividend stocks can be a tricky endeavour.
But it doesn’t have to be. The following are the steps you need to take to invest in dividend stocks with limited risk:
Step 1: Find Dividend Stocks
The first step of investing in dividend stocks in Canada is finding a company that pays you dividends and has a strong track record of growing its dividend over time.
Luckily, we’ve already done the hard work for you above by identifying the best Canadian dividend stocks you can invest safely and profitably.
You can now speedily move to the next step.
Step 2: Evaluate the Stock
You shouldn’t invest in stock only because it pays a high dividend or appears on a list of high-dividend-paying firms.
Any stock you intend to add to your portfolio should be thoroughly evaluated.
Take a look at the company’s main competitors.
It might not be a positive indication if the dividend it pays is substantially higher in percentage than its rivals.
It may be a sign that investors have lost faith in the firm.
If this is the case, they could be selling shares, lowering the share price while increasing the dividend rate.
The dividend payout ratio is another crucial factor to consider.
This is the amount of money paid out in dividends as a percentage of the company’s net profits.
It should be no more than the industry’s average dividend yield and definitely not more than 80%.
If it’s higher, it could indicate that the business is sacrificing potential growth to favour current earning.
As a result, it could not be a high-dividend stock for long.
Step 3: Determine How Much You Can Invest
You don’t want to purchase too many stocks that will dent your savings, so you need to know how much you can afford to invest.
You should diversify your investment, as you should for any other type of investment.
Just because a stock pays a 5% dividend doesn’t guarantee that you can profitably invest 30% or 40% of your profit in it.
Dividends are never guaranteed because a company’s fate can change at any time. As a result, diversify your dividend-paying stock portfolio.
Plan to invest in a minimum of 10 individual stocks and up to 20. Spread them out across different sectors so that your portfolio isn’t too dependent on a single sector.
In general, you can invest a percentage of your portfolio in each stock.
For example, if you intend to invest in ten stocks, each should account for approximately 10% of your total portfolio.
Reduce the percentage for any stock that poses an additional risk.
A more than 4% or 5% dividend could indicate that the company’s prospects are shaky, and the stock price is about to drop.
You’ll want to invest a smaller portion of your money in that company.
Step 4: Purchase the Stock
Upon determining how much you want to invest, the next step is to invest.
It is possible to buy stock via a direct stock purchase plan (DSPP), even though it is not common.
DSPs are not available at every company, but they’re more popular at larger, more developed companies.
They allow you to buy stock directly from the company, usually without paying any fees.
Most preferably, you’ll want to buy dividend stocks from well-known brokerage firms that don’t charge transaction fees.
Although you can miss out on any DSPP offers, a brokerage account gives you the benefit of managing all your dividend stocks on one platform.
It will be easier for you to purchase, sell, and track your positions due to this.
Bonus Step: Track Your Dividends
Never presume that dividends will last indefinitely! A company’s dividend may be reduced or even eliminated.
Even if a corporation has paid dividends for decades, there’s no guarantee there won’t be a negative shift at some point in the future.
Dividend reductions are announced publicly by companies.
However, in today’s information-overloaded world, you may miss the announcement.
That’s why you can double-check your dividends every time they come in.
This comprises both the sum of the dividend payment and the dividend yield percentage of the main purchase price.
How to Calculate Dividend Yield?
The dividend yield is an estimate of your expected return from a stock investment.
When the dividend is not lowered or increased when a stock drops, the yield will increase.
On the other hand, it will drop when the stock price goes up.
A dividend yield that goes up when a stock drops is an unusually high yield for the time period it takes to decrease in value.
By calculating the dividend yield, you can compare different stocks and determine the best.
Thankfully, it is simple to calculate the dividend yield. All you need is to apply the following formula:
Dividend yield = annual dividend of a share/market value of a share
The dividend amount is what a company pays in dividends each year, while market value refers to a company’s current share or stock price.
You can also use a dividend yield calculator to determine the dividend yield of your stock investment accurately.
Bottom Line
Dividend stocks are one of the most popular investments today. They provide an extremely consistent source of income and can produce compound returns which creates significant wealth for investors who stay invested for a long period of time.
Dividend stocks add stability to your investment portfolio. They help you in achieving long-term financial goals and act as a hedge against inflation.
It doesn’t matter what your background or how many years of experience you have in trading stocks.
If you don’t know what a company is making, as well as how much cash it’s producing per quarter and where it’s investing that money, you can easily throw money away.
Now that we learn the game rules investing in dividend stocks in Canada should be easy and done with limited risk.
What next? Let us know on the comment box which of the above best Canadian dividend stocks is suitable for your investment portfolio.
Hi, I'm Adeola Adegoke. I am a licensed Insurance Broker in Manitoba, and I hold a master’s degree in Mathematical Sciences (with a major in Financial Modeling) from the African Institute for Mathematical Sciences (AIMS), Tanzania.
Also, I have a second master's degree in Statistics from the University of Regina, and I am currently pursuing my Ph.D. in Statistics at the University of Manitoba.
The primary purpose of Money Reverie is to help everyday Canadians make better financial decisions by providing up-to-date financial news and information, reports, product reviews, and government programs.
