Some of my favourite Canadian dividend paying stocks

Some of my favourite Canadian dividend paying stocks

There are quite a few dividend payers in Canada but I believe you shouldn’t strive to own them all.

Why on earth would I say that?

While dividend payments are great dividend payments AND dividend increases (hopefully every year) are even better.   

Thanks to another recent reader question about Canadian stocks to buy and hold – I figured I’d share some of my favourite Canadian dividend paying stocks from key sectors across our Canadian economy.  These companies not only pay dividends but many of them tend to increase them every year – including 2018.

Banks

We’ve owned all seven (7) major Canadian banks across various accounts (non-registered, Tax Free Savings Accounts (TFSAs), and Registered Retirement Savings Plans (RRSPs)) for many years now.  We own them because these companies have provided tidy total returns and if the past is any remote predictor of future results, Canadian banks will continue to pay dividends for the foreseeable future.

Many Canadian banks have been paying dividends for well over 100 years.  Here are the dividend histories sorted by market capitalization:

  • Royal Bank (RY) – paid dividends since 1870. (Increased dividend already in 2018.)
  • TD (TD) – paid dividends since 1857. (Increased dividend by almost 12% in 2018.)
  • Bank of Nova Scotia (BNS) – paid dividends since 1832.  (Increased dividend already in 2018.)
  • Bank of Montreal (BMO) – paid dividends since 1829.
  • CIBC (CM) – paid dividends since 1868. (Increased dividend already in 2018.)
  • National Bank (NA) – paid dividends since 1980.
  • Laurentian Bank (LB) – paid dividends since 1886.

Unless these companies cut their dividend we will continue to own these stocks going forward.

Of note, historically, along with lifecos and other financial companies, the financial sector tends to make up between 30-40% of the total Canadian stock market index.  So, as Canadian banks perform (or don’t perform) so goes the Canadian index to some degree.

Pipelines

Pipelines are like toll roads specific to the energy sector – once the goods come out the Canadian ground they have to be transported somewhere, somehow.  Like toll roads, inflationary costs can be passed on to the consumer.  Instead of taking this lying down I figured I should be an owner of what I consume.  Enbridge (ENB) was actually one of my first dividend stocks.  It remains in our portfolio today along with these other dividend pipeline stocks:

  • Enbridge – paid dividends since 1953.
  • TransCanada Corporation (TRP) – paid dividends “since the late 1960s” as per their Investor Relations team in an email to me. (Increased dividend by over 10% in 2018.)
  • Pembina Pipeline (PPL) – paid dividends since it was a trust, since 1997.
  • Inter Pipeline (IPL) – like Pembina, paid dividends since it was a trust, since 1997.

Telecommunications

Ah yes – “Robellus” – the moniker assigned to the biggest telecommunications companies in Canada:  Rogers (RCI.B), Bell (BCE), and Telus (T).  We own all these companies since I figure if you can’t beat them, you might as well join them.

  • Rogers (RCI.B) – paid dividends since 2003.
  • Bell Canada Enterprises (BCE) – paid dividends since 1880 (formal records date back to 1949). (Increased dividend by almost 6% in 2018.)
  • Telus (T) – paid dividends since 1999.

Like pipelines, inflationary costs can be passed on to the consumer.  We have home internet with Rogers and my cell phone is with Koodo (Telus).  I figure over time if I have enough company stock of each I can use the dividend income from Rogers and Telus to pay for both bills every month.  (I’m about halfway to this goal actually.)

Energy

Unless you’ve been living under a rock for the past few years you should know by now that our country’s valuable oil and gas energy sector can be very cyclical and rather volatile.  Even as the wild oil price roller-coaster continues I remain invested in only a couple of Canada’s big energy companies – for dividend income (but also for the hope of longer-term capital gains.)  Buyer beware in this sector with any of these companies.

  • Suncor (SU) – paid dividends since 1992. (Increased dividend by over 12% in 2018.)
  • Canadian Natural Resources (CNQ) – paid dividends since 2001 (and has increased their dividend every year for the past 17 years including a whopping 22% increase in 2018). (I don’t own this company yet but I’m considering it.)

Utilities

Like other sector ETFs, instead of holding any utility Exchange Traded Funds (ETFs) (that charge us modest money management fees) we decided to simply hold the top-stocks in such funds directly.   Over the years we’ve been building the utility sector of our portfolio and this will continue down the road as well.  Here are the dividend histories of some popular utility companies.

  • Canadian Utilities (CU) – paid dividends since 1950. Of note, CU has increased their dividend for an unprecedented 46 straight years in Canada.  Only Fortis is working on a similar dividend-increase streak.  (Increased dividend by 10% in 2018.)
  • Fortis (FTS) – paid dividends since 1972. Fortis has increased their dividend for 44 straight years.
  • Emera (EMA) – paid dividends since 1992.
  • Algonquin Power (AQN) – paid dividends since 2009.
  • Brookfield Renewable Energy (BEP.UN) – paid dividends since 2003. (Increased dividend already by 5% in 2018.)

So there you have it – a deeper look into the dividend histories of many popular Canadian dividend paying stocks including many of the ones I own.  I’ve certainly left out a number of other solid Canadian dividend payers (including more stocks that I own from the U.S. in particular) but these are some of my favourites from our True North, Strong and Free!

These Canadian companies, almost regardless of stock market performance including this year, continue to pay us quarter after quarter almost like clockwork.  As you can see above, they often increase those dividend payments each year.  Keep those raises coming!

Disclosure:  None of these stocks are recommendations for purchase.  I am however stating based on the shareholder-friendly histories of these companies, if you’re going to buy-and-hold Canadian stocks that have paid dividends for decades, in some cases generations, this could be a starting point for your research.  I own most of these companies above.  I have no intention of selling any of these companies at this time. 

What do you make of my list?  What companies would you include as stellar dividend payers and growers in Canada?

My name is Mark Seed and I'm the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, we're inching closer to our ultimate goal - owning a 7-figure investment portfolio for semi-retirement. We're almost there! Subscribe and join the journey. Learn how I'm getting there and how you can get there too!

138 Responses to "Some of my favourite Canadian dividend paying stocks"

  1. Excellent list Mark!

    FYI: BEP.UN has paid distributions since 2003, not 2011 as you show. I’m surprised you chose BEP.UN over Brookfield Infrastructure Partners (BIP.UN). Its the top performer and dividend grower of the Brookfield spinoffs. I own both plus Brookfield Property Partners (BPY.UN). They all have good global diversity.

    Reply
      1. Mark, I own BIP.UN, BEP.UN and BPY.UN in my RRSP. Good yields, good DGRs, good diversity of assets, well managed. IMO one can’t go wrong with Brookfield companies for a buy and hold portfolio in a registered account.

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        1. I am also firmly a Brookfield fan. Major holdings in BAM.A, BEP.UN, BIP.UN and very large holding in BPY.UN. IMO these are basically small diversified mutual funds. If I didn’t already have too much of BPY I’d seriously be considering buying some more.

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          1. Hummm, I’ll keep watching BPY.UN. Seems to be a fan of some wealthy followers/readers here. 🙂 Anything around $26 or so is good for me. Would be nice to buy 100 shares.

        2. It would be nice to get BPY.UN DRIPping inside my RRSP. Price hasn’t gone far in 5 years but the rising dividends will be nice.
          Stock price for BPY.UN was under $24 in May 2013. Under $27 now.

          I’m DRIPping BIP.UN and BEP.UN x2 each every quarter.

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          1. BPY.UN has great properties so the potential is there for when the public sentiment changes. In the meantime their dividend growth is greater than most REITs so you get paid well to wait.

          2. Fair point. I like to get paid 🙂 Will consider my RRSP for that one. BPY.UN is/remains an interlisted stock no? I recall it also pays dividends in USD like other Brookfield companies.

          3. Interesting post on Brookfield. The posts here caused me to have a relook at some of the exchange & tax issue raised. We own several hundred shares of each BPY.UN and BIP.UN both in each of our TFSA’s held at RBCDI. At one point I held BPY on the US side of TFSA and had it exchanged for BIP.un when I decided I wasn’t going to use the US cash for years in that acct.

            Thought I’d post my experience.

            For BIP my withholding tax amounts were .53 (53 cents CDN) for all of 2017.
            For BPY withholding tax amounts were 0. (zero) for 2017.
            The broker is responsible for doing these tax withholdings. So unless they are making a long term mistake this is basically a non issue re investing in a TFSA.
            According to Brookfield the exchange conversions are done at BOC exchange rate on the record date. However I did not know if RBC is also charging something on the conversion. When I called RBC the advisor was unable to confirm if there is a conversion charge but he thought so. I am expecting a call back with this information. It got me thinking is the conversion done by Brookfield (hence their statement about the currency exchange rate on the RECORD date a month or so before payout) or at the broker? I think Brookfield. In the meantime I have researched the BOC USD exchange rates for the record dates and checked the conversions using the US Brookfield distribution quarterly payout amounts vs. the equivalent CDN $ prices shown on my statement. The CDN rates used for my dividend payouts are exactly BOC rates so there is no fee/penalty to converting to .un (CDN version) other than the variability of the currency exchange which one also has holding it on the US side. Started to post all details but too much work!!!

            To make a long story short according to my calculations there is no currency exchange fee from my broker as Bernie suggested (but I have yet to hear directly from them) and the withholding taxes are negligible to nil on these 2 investments. YMMV

          1. Bonnie, a TFSA would be fine too but I wouldn’t recommend a non-registered account. BIP.UN, BEP.UN and BPY.UN distributions are taxed as interest income, no dividend tax credit either.

          2. The challenge with Brookfield stocks inside a TFSA is they pay dividends in USD. So, you need to hold those U.S. stocks inside a US $$ TFSA. Otherwise, you are going to get dinged on CDN-US $$ conversions if you keep the stocks inside the CDN-side.

          3. Mark, so does that mean you hold your Brookfields in USD$ inside your RRSP? (In other words, youd invest in BPY instead of BPY.UN)? just only asking as I hadn’t thought of that before. Thanks.

          4. Correct. Why not hold the interlisted version? Otherwise you might be getting charged foreign exchange fees from CDN to USD $$. I would be curious to know what others do.

          5. I’m not understanding here Mark. There are no foreign exchange fees on dividends. I keep all of my holdings in $CDN currency in my accounts, always have. IMO it’s better to own the Canadian version of any interlisted stock. Why pay the exchange fees to buy when you don’t have to.

          6. Are you sure? Depending upon who you bank with, CDN stocks that pay dividends in USD will get converted but there will be a charge for this. Some brokers take a cut.
            https://www.theglobeandmail.com/globe-investor/inside-the-market/the-allure-of-us-denominated-dividends-for-canadian-listed-firms/article32733063/

            “Encana, for instance, declares its dividends in U.S. dollars, but notes on its website that, “Dividends payable to shareholders [including individuals or intermediary accounts] with a ‘registered’ address in Canada shall be converted into and paid in Canadian funds at the rate quoted for Canadian funds by the Bank of Canada at noon on the Record Date.”

          7. I hold BPY.UN. From what I understand, the dividend is declared in $US and paid in $C. According to the website non-US holders “shall receive quarterly cash distributions in the Canadian dollar equivalent, based on the Bank of Canada exchange rate on the record date.”

          8. I intend to hold BPY.UN and then move it as an interlisted stock to my USD $ RRSP side (to therefore hold BPY) since those dividends are paid in USD.

          9. That seems smart to me, hold Brookfield assets inside RRSP. Yes, that’s good – you can get the spot rate but not all brokerages are created equal. I recall some brokerages will charge a small conversion fee on USD to CDN dividends if you keep CDN stocks that pay USD dividends inside the CDN $$ side of your account. BMO and some others might be the “good guys” on this. TD, not so much.

          10. Mark, I’ve been with BMO InvestorLine since 2007. I’ve always kept my funds in $Cdn including foreign stocks. I’ve yet to be charged conversion fees on dividends. My Brookfield’s BIP.UN, BEP.UN and BPY.UN are held in my RRSP, now RRIF so I have no personal experience with holding them in a TFSA. However, I have communicated with others who do hold these in their TFSA. They haven’t had any of the fees/taxes issues you mention. I don’t see a problem with holding $USD dividend paying Canadian stocks in an RRSP, RRIF or TFSA but $USD dividend paying U.S. stocks should only be kept in an RRSP or RRIF to avoid withholding taxes.

          11. Totally agree Bernie – I don’t see a problem with holding $USD dividend paying Canadian stocks in an RRSP, RRIF or TFSA but $USD dividend paying U.S. stocks should only be kept in an RRSP or RRIF to avoid withholding taxes.

            I’m just saying some brokerages ‘take a small cut’ (not BMO) if they convert USD to CDN $$ for dividend payments for investors. Again, BMO doesn’t do this.

            I keep only U.S. stocks or U.S. ETFs inside my USD $$ RRSP.

          12. Mark, see my post above re Brookfield interlisted currency, tax and account type factors.

            One error in my post- I exchanged BPY for BPY.un and not BIP.un.

  2. I am wondering that you do not include any low yield high growth stocks, for example, CNR, MRU and ATD.B. Do you have any rule with yield?

    Reply
    1. I own a small portion of CNR but not the others. My bias is for higher yielding and dividend growing stocks but I have nothing against consumer discretionary or industrial sectors. Do you own those stocks May?

      Reply
    1. Fair questions! I’ve historically focused on stocks yielding more than 3 or 4%. So, yes, somewhat of a yield rule. That said, I do intend to buy more CDN dividend payers like these that can grow their dividends over time. If you don’t intend to sell stocks often – higher yield and growing dividends is better – thoughts?

      Reply
      1. As I do not plan to retire right away, I do not set a yield rule. These kind of company may yield not much right now, but the yield increases quite fast. While it took bmo more than 10 years to double its dividend, cnr only less than 5 years. So in 10 years time, It’s possible I got better total return with cnr. At the time of retire, I might switch cnr to bmo then if I start to need the dividend for expense and my portfolio do not generate enough income.

        Another reason is diversification. Higher yield stocks are too concentrated in few sectors.

        Reply
        1. May,

          “These kind of company may yield not much right now, but the yield increases quite fast.”

          I believe you meant to say the dividend increases quite fast, not the yield, unless you’re referring to your yield on cost (YOC). In most cases when the dividend yield increases quickly its brought on by a falling stock price.

          Reply
          1. Sorry May, didn’t mean to correct you in particular. Just wanted to clarify things for some of the new dividend investors. I’ve noticed there often is confusion with the word “yield” as it can mean several different things.

        2. I have a 10-year timeline to “retire” or at least semi-retire as well. I look forward to comparing notes 🙂

          Fair point in Canada, many higher yield stocks are concentrated in just a few sectors but I have confidence in those sectors. People aren’t going to stop banking in Canada – we love debt!!!

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      2. Forgot to mention that I am in the process to sell low yield high growth stocks in rrsp and buy back in non registered account. I figure in the case total return is the same, I end up better with low yield high growth stocks in non registered account.

        Reply
        1. I think lower-yield and higher growth stock non-reg. makes sense, reduce the tax burden or at least defer the capital gains burden until you sell right? If I buy some SAP (don’t own yet), more CNR, etc. I will likely put in non-reg. since a) TFSA and RRSP are maxed and b) for those low-yield reasons.

          Thoughts?

          Reply
          1. Yes, exactly for tax optimization. I get less dividend now with higher tax rate, and I can choose to realize capital gain when my tax rate is lower. With less tax bleeding, hopefully I end up with more money in the account 10 years later.

            I also looking at the etfs that did not pay any distribution and would like to buy the us/international indexed ones in my non registered account for tax defer growth. I figure there will be a part of my non registered account not touched maybe for first ten years as I plan to exhaust our RRSP accounts first. If I look at 20 years time frame, I think it would be worth it. But I did not pull the trigger yet, Canadian dollar already slipped so much.

            Tax planning will be a heavy task for us if we retire before the kids go to university. I never imagined I could get Child benefit from the government. But inspired from the early retirement article you mentioned in last weekend reading blog, maybe it is possible to get some. We pay lots of tax every year and hardly get any back due to higher family income. It would be nice if we could get some.

            Who knows, maybe I will continue to work until 70 years old. Working life provides a structured life style for me and it’s actually good for people like me who has no self-control. LOL.

        1. I’m in the same boat, if you can handle the volatility of high yielding dividend stocks you can do very well buying during corrections. Which brings up a point, why no REITs? There are many that (currently( north of 6%) But as mentioned they are very volatile. Artis for example dropped 25% during the last correction. ENF now has a yield approaching 10% all due to a price decline

          Reply
    1. I agree Gary. I like and have no problem owning the pipes but Canadian oil/gas companies are falling out of favour with the ‘green” sector.

      Reply
      1. I’ve limited my direct oil and gas exposure in my portfolio. As you can see though, I do own many pipelines. Do you think those dividends from ENB, IPL, PPL, TRP are at risk? Certainly the Boards of those companies don’t think so!

        Reply
    2. ENF is one of those that DRIP at a price discount (98%). Whilst it doesn’t make or break the decision to invest in it, I’m happy to take the discount every month.

      Reply
      1. Agreed. Not yet DRIPping for me yet but in another month I should have another $3k to invest and I can likely get another 120 shares of ENF to start my synthetic DRIP.

        Reply
  3. Hi Mark,

    Great list! I own all the stocks you’ve highlighted except for ENB, PPl, IPL, and BEP.UN. Hopefully over time I’ll own them when they become undervalued.

    It’s important to note, though these are great companies to own over the long-term they should only be bought when they are undervalued. A stock is undervalued when it’s “Current Dividend Yield” is higher than it’s “Average Dividend Yield”. Basically two formula’s to remember:

    If “Current Dividend Yield” > “Average Dividend Yield” then stock is undervalued
    If “Current Dividend Yield” < "Average Dividend Yield" then stock is overvalued

    I wish I knew this years ago, early in my investing career I paid too much for some stocks. 🙁

    cheers,
    Kanwal

    Reply
    1. Sorry I should clarify my statement “Hopefully over time I’ll own them when they become undervalued.”
      What I meant to say was, “Hopefully over time I’ll own them when it comes time for me to buy, and they’ll be undervalued then”.

      Agreed a few of these are undervalued right now. But I won’t be buying them right now, because I’m pretty much fully invested and am holding some cash for better opportunities.

      For me undervalue is one factor to consider, I also look a company’s:
      – payout ratio
      – debt level
      – P/E
      – EPS growth over the last 10yrs or more
      – dividend growth over the last 10yrs or more
      – P/B
      – S&P credit rating
      – is the company recession proof?
      – does the company have a low-cost durable (lasting) competitive advantage?

      Reply
      1. Excellent points. That’s good data to consider but as we all know the future is always very cloudy. My favourite is: “is the company recession proof?” This is critical.

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    2. I know what you meant 🙂 I personally look for around 52-week lows and rising cash flows or EPS. That combination is good and if the holding period is in many years, as in decades, then buying now might not be a poor time at all.

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    3. The problem is you never know what holds for the future. I bought ENB and enf around its 52 weeks low last year and also averaged down when it went lower, but it broke the five years low after that. I am in deep water now.

      And for some of the stocks, like ry, it’s not likely I will be able to get it at 52 weeks low, so better just buy it in a pull back.

      Reply
    1. Mike, undervalued will get you more dividends per dollar of investment. That said, if you’re buying for the long term or adding to an existing position the stock price isn’t as critical.

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    2. I’m the same as you Mike. I try and buy around 52-week lows but really, if your holding period is decades, then buying now is likely as decent a price as any. Just my thoughts. The best time to invest was usually yesterday!

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  4. I might not consider EIF to be a “stellar” performer but we still have a fairly large holding of it now. I was prevented from buying this stock when it first came out but I did hold their debentures for years. I’ve only held their stock since 2015 when I retired.

    Reply
      1. Ya, all my market investing is done in registered accounts. Both RRSPs have stock (1250/799) and all the CDs have matured so none of those remain. This is another stock that has the discounted DRIP (97%).

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    1. Perhaps because many of these utilities and pipelines have significant debt and are more negatively exposed to interest rates. Markets are forward looking and seem to be indicating belief there will be future rate hikes – maybe more than we think.

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    2. Mike, stock prices are mainly driven by sentiment. Even the fear of future interest rate increases will create negative sentiment and trigger momentum selling. The best investors are the ones who filter out the noise (news), hold long term and buy good companies when prices are cheap.

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        1. There are no real tariff wars yet. So far its all talk and little action. Regardless, there’s no reason to fiddle with ones portfolio over something that won’t be an issue after common sense prevails and/or regimes get replaced. If you have good blue chip companies in a diversified portfolio and in no need to add new money sit back, relax and enjoy life. Turn BNN off.

          Reply
          1. I agree. I’m not really fiddling with anything…only looking at what I can buy more of as my savings to investments increases my cash position with time. Don’t really watch BNN – it is entertaining at time though!

  5. I’ve often suggested that 15 Canadian stocks would be all one needs to get good diversification (with the exception of the US) and your list provides just that. They include 12 of my 13 and you’ve mentioned BIP so these are the ones we’ve got all our investments in. I’d suggest for those who feel they need broader international holdings to add 5 US stocks in their RRSP. 20 stocks to buy, add too when the prices drop, reinvest the dividends, hold and let them compound over time. No fees, no re-balancing, no group of holdings you wouldn’t want to buy in the first place and a growing income. What could be simpler.

    Reply
    1. I think your recipe is a very good one cannew. I just don’t (yet) feel comfortable owning just 13 or 15 or so stocks. I figure 30 CDN is good for me + 10 US and then some low-cost ETFs for diversification (and growth). As long as you are meeting your objectives – that’s all that matters. You’ve likely exceeded your expectations!

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  6. I better restate what I’ve said in the past or get blasted. I suggested that one would be better Concentrating on a select group of Solid DG stocks. I don’t feel you need to own every sector and Energy or cyclical stocks are ones we no longer hold. But Marks list does provide a fairly good diversified selection and its ones we’re sticking with. Sometimes holding too much of a good thing is good.

    Reply