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.
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)) at some point.
Right now, I own six (6). 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 (although I no longer own this stock; sold a few years ago to buy more TD).
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 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.
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.)
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 at this time.)
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 (and we own every one of these):
- 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?