≡ Menu

The Best Canadian Dividend Stocks 2014 – Dividend Achievers List


Top Canadian Dividend Stocks

After reading Derek Fosters book, my interest in researching strong Canadian dividend paying stocks has increased. I already own quite a few dividend payers in my portfolio, but I thought I would share with you some of the stronger dividend paying stocks around Canada.

One great source of strong dividend companies is Mergent’s Canadian Dividend & Income Achievers List. The Claymore Dividend & Income Achievers ETF (CDZ) replicates the Mergent list. Here is an excerpt from the Claymore site that describes CDZ:

The Claymore CDN Dividend & Income Achievers ETF has been designed to replicate the performance of the Mergent’s Canadian Dividend & Income Achievers Index. Mergent’s Canadian Dividend & Income Achievers Index consists of some of the issuers in Mergent’s Canadian Dividend Achievers (70%) and a group of Income Trusts and real estate investment trust (REITs) (30%). The weighting methodology is modified yield weighted.

Since 1979, Mergent has identified, on a yearly basis, companies with a stream of dividend payment increases, the “Dividend Achievers.” The index seeks to identify and select a diversified group of dividend and distribution paying companies which have consistently increased their annual dividends and payments to shareholders. The index represents a diversified portfolio of leading high yield equity securities in Canada weighted based on yield and quality and selected by Mergent using a rules-based methodology including consistent growth of dividend and distribution payments.

I always find it helpful to take a look at ETF lists to get some stock ideas. If you are not comfortable buying individual stocks, why not buy the ETF itself and own ALL of the strong Canadian dividend paying stocks for a management fee (0.60%)?

Personally, I’m not completely comfortable with income trusts as most of them pay out more in dividends than they earn. Even if they increase their dividends every year, I’m still cautious over them.

If you’re too busy to check out the iShares site for yourself, here is a list of their top holdings (Feb 2014):

Company Symbol
Exchange Income Corp EIF
Bird Construction BDT
AGF Management AGF.B
Enbridge Income Fund ENF
Northern Property REIT NPR.U
Emera EMA
Bell BCE
Wi-LAN WIN
Laurentian Bank LB
Shaw Communications SJR.B
Corus Entertainment CJR.B
Transcanada Corporation TRP
Keyera Corp KEY
Rogers Communications RCI.B
Telus T
IGM Financial IGM
Fortis FTS
Canadian Real Estate Investment Trust REF.U
Gluskin Sheff GS
Genworth MI Canada MIC
Evertz Technologies ET
Bank of Nova Scotia BNS
Toronto Dominion Bank TD
Thompson Reuters TRI
Transcontinental Inc TCL.A
Dorel Industries DII.B
Rogers Communications RCI.B
Major Drilling Group MDI
Ensign Energy Services ESI
Enbridge Inc ENB
Computer Modelling Group CMG
Cineplex CGX
Pason Systems PSI
Canadian Utilities CU

There are quite a few dividend payers in Canada, but the ones listed above have increased their payouts at least once / year for the past 10 years 5 years (thanks Edwin). What I regularly do is keep a watching the dividend payers for dips in their stock price. If you take a look at the list above, it is apparent that a lot of banks seem to currently have lower yields historically speaking.

Also note that it’s best to keep your costs as low as possible when buying stocks, check out my review of Canadian Discount Brokers and a review of Million Dollar Journey Reader Favorite, Questrade.

Interested in doing a little technical analysis on dividend stocks that you are interested in?  Here’s the free trend analysis tool that I use.  Simply enter the stock symbol and they will email you a printed report.

Stay tuned for tomorrows article with a list of strong American dividend paying stocks.

More Canadian Dividend Stocks Investing Info:

Disclaimer: I own some of the stocks listed in this article. The stocks listed in this article are not stock recommendations, buy at your own risk.

If you would like to read more articles like this, you can sign up for free my newsletter service below (we will not spam you).
Otherwise, if you want to receive an email every time I post something new, you can sign up here.  If you are into social media, you can also get MDJ updates via facebook and twitter.

Share and Enjoy

  • Facebook
  • Twitter
  • Delicious
  • LinkedIn
  • StumbleUpon
  • Add to favorites
  • Email
  • RSS

FrugalTrader About the author: FrugalTrader is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

{ 88 comments… add one }

  • JR May 5, 2008, 8:26 pm

    my take as I have said before, is to pick a % profit number and exit.

    Or take out your initial investment and let the profit ride

    All the same Eva, you have good paper profit on this equity, that does not become real profit till you cash it in

  • Robert Hof May 14, 2008, 10:35 am

    What has this become? A stock tip board?

  • Dreos May 17, 2008, 11:30 am

    HTE.UN
    Harvest energy trust $20-$30per share. $0.30 cents dividend per share monthly. The best I’ve found so far.

  • Chinstrap May 17, 2008, 8:44 pm

    HTE.UN is a levered play on crack spreads. Crack spreads are starting to widen again after getting squeezed initially by high crude oil, low refined spreads..

    My 2 cents for what I believe is the typical MDJ reader is SDT.UN, which is a closed end income trust fund run by Sentry Select. It has a diversified portflio run by a reputable manager and owns a lot of the solid trusts. Moreover, it is trading at a discount to its NAV as many closed end trusts do and yielding 12% (paid monthly).

    For those doing SM or don’t have a mortgage, one could put in $100,000 and get paid $1000 a month. Say you borrow at 6%, that costs $500 a month for a net $500 a month payout…

  • Eva Bell May 20, 2008, 5:56 pm

    to Dreos
    Are you kidding?
    Eva-Novice

  • Dreos May 20, 2008, 7:26 pm

    Eva, why would I be kidding? Do you have a better pick for a long term security with dividends better than HTE.UN? If so, please tell.

  • Eva Bell May 20, 2008, 7:52 pm

    Dreos
    for example

    Penwest PWT.UN.TO monthly div $1.31
    Pengrow 0.73
    Active energy AEU.UN.TO 0.36
    Pembina 0.36

    etc and cost less than HTE but I have HTE as well in my portfolio
    Eva_novice

  • Eva Bell May 22, 2008, 3:57 pm

    Hi Dreos,
    and how about all REITS just a few for instance
    SRQ.UN
    MRT.UN
    INN.UN
    REI.UN etc….find complete list with them on web site
    http://www.sitefind.com/links/Public_companies/REITs/index.html

    let me know….
    Eva_novice

  • Dreos May 22, 2008, 9:50 pm

    Hi Eva. I own some REI.UN. I also recently bought SDT.UN. Seems like a good diversified basket of income funds, many are energy and real estate style. Thank you for additional tickers.

  • Cannon_fodder May 22, 2008, 11:52 pm

    I’m looking to put together a basket of 10-12 Canadian dividend achievers for a position of about $25k each.

    Is there a free website that will show me their current yield, dividend paying history (in terms of consecutive quarters with no decreases), rate of dividend paying increases and sector?

    • FrugalTrader FrugalTrader May 23, 2008, 7:00 am

      Hey Cannon, check out the yahoo finance “historical prices”. It will give you the dividend payouts over the past 5-10 years by month. It won’t technically show the yield, but they will show the dividend in addition to the price. Since you are Mr. Calculator, you can pull that info into a spreadsheet to find the yield.
      http://finance.yahoo.com/q/hp?s=RY.TO

  • Cannon_fodder May 23, 2008, 9:03 am

    FT,

    If I’m going to be a lazy investor there has to be an easier way! I know you can the yield from yahoo if you do the detailed quote but I was looking for a one stop shop of all of the above info.

    I think I’ll just start with the dividend achiever’s info and then go find the yields individually. If it is relatively painless, I’ll probably create a spreadsheet that links to the yahoo site for realtime updates.

  • Chinstrap May 23, 2008, 10:20 am

    Sorry to nose into you discussion people but being pure yield gluttons at the expense of not knowing the underlying business is crazy in my opinion.

    Why not go for SXP.UN as it is yielding almost 18%.. That said, it is an envelope manufacturing company that is in secular decline with slow growth. I am comfortable with the risk b/c I believe it dominates the market and has synergies from an acquisition.

    Why not ask your broker for research on REITs, Royalty trusts or whatever instead of using Yahoo! At least you’ll also get P/NAV, payout ratios and not just yields.. If a company is paying out 100%+ payout it’s divvy is not likely sustainable.

  • CAD_Newbie_Investor July 2, 2008, 12:11 am

    Is there any specific advantage of investing in Canadian dividend paying stocks rather than any dividend paying stock?

  • FrugalTrader FrugalTrader July 2, 2008, 6:14 am

    Cad_newbie_investor, Canadian dividends are preferred due to the tax advantage.

    http://www.milliondollarjourney.com/how-investing-taxes-work-part-2-dividends-and-interest.htm

  • Foster Follower December 24, 2008, 5:48 pm

    Following Derek Fosters approach, I invest only in companies with a long, long history of paying and regularly increasing dividends. Unless the company is newly created, a five or even ten year history of paying an increasing dividends is, in my opinion, not a very long record. The longer the better as my interest is in building a portfolio that will equire little to none of my time to manage. That is, I do not wish to buy and sell stock, but instead, only buy and hold while collecting dividends. Also, I look for companies with DRIP and SPP in order to reinvest my dividends and buy addtional shares without paying broker fees which only serve to decrease value. And, I look to buy when prices are low …. usually once a yield is in the 4-5% range, I consider this a good buying opportunity. Usually, I never buy when yield is above 7% as this may indicate a problem with the ability of the company to continue paying dividends. Major banks, excluding National Bank of Canada, are the exception …. the banks are the economc foundation of this nation having paid dividends without interruption since before confederation in some cases. Even in these uncertain times, the banks will continue with dividends because it is in their and the country’s best interest to do so … cut or stop dividends and there would be a run on the banks, and a complete loss in confidence of Canada. Canada, unlike the US, has only 6 major lending institutions, and so, these will be protected no mattter what happens. So, I would buy bank stock at any yield, especially yields above 7%, because this is a bargain. Buy TD, CIBC, Nova Scotia, Royal … regardlessof their respective exposure to the car makers & paryts suppliers, regardlessof their ecxposure to comercial & personal real estate markets, etc. … they are good buys rights now …but buy and hold …do not buy with intention to sell sooner rather than much, much later … buy and then forget about them unless it is to buy more.
    Never hold dividend paying stck in an RRSP because when withdrawn dividends are taxed as employmnt income, whereas ouside an RRSP the tax rate is much, much lower. The exception is foreign dividends which are always taxed the same as regular income, and therefore, it may be beneficial to keep foreign stock in RRSP account.
    Also, look for buying opportunitiesfor dividend stock …. put cash in your non-RRSP account and then wait for the right opportunity … the right opportunity is when the price is down but the fundamentals are still good. Also, only buy into essentials such as banks, food suppliers, utilities / pipelines, etc. However, tryng to time the market is impossible so don’t regret your decision if stock drops after you purchase …. remember that you are in this for the dividends and not the capital gains.
    Also, regarding dividends, stay away from companies with dividends of above 7% as tis indicates that company will likely soon suspend or cut dividends. If you instead buy into a company at good company that has a long, long history of paying dividends as well as increasing dividends over tie, then if you buy at a time when yield is 5%, then it won’t be too many years bfore the yield is up to 10% or more.
    Currently, I hold stock in Enbridge, Algonquin Power, Bank of Nova Scotia, TransCanada Corp., Corby Distillery, Encana, National Bank and Fortis. In the new year, I plan to convert all my GICs to more Canadian dividend paying stock. My goal is a portfolio that will yield an annual income of $30,000 in dividends by the time I am 55….. I am 45 now … at the current Canadian dividend tax rates, this would be the same as earning an employment income of $50,000 per annum. Combined with my employment pension of 10,000, and later Canada Pension, and I will be earning more in retirement than I do now as a work slave… as well, my expenses will be less leaving more disposable income for travel, art, courses, etc. …the things in life that are more rewarding and fun. Derek Foster has it right …. dividends are the way to go … that is, buy and hold stock in companies with a long,long history of paying and regularly increasing dividendsand that are also the makers /suppliers of essentials / staplesin ost everyone’s homes …food, cash, booze, oil, gas, etc…. all those things that we can’t /won’t do without no matter how tough times may get.

  • Foster Advocate December 31, 2008, 12:01 pm

    Hey Foster Follower and Others,

    I too, want to follow Foster’s lead.

    To you and others in this blog, some questions for you:

    1) What financial institution do you suggest I go with to start purchasing my Canadian dividend-paying stocks that have DRIPs and SPPs? I have a TD Waterhouse CDN WebBroker account – should I use that? Will that account allow me to use DRIPs and SPPs?

    My Plan:

    I am considering making my first dividend purchase with Enbridge, BMO, Royal Bank or Fortis.

    I currently have $20K+ in RRSPs and wish to continue those contributions to reduce my taxable income. However, the tax refunds I get, I plan on using to buy dividend-paying stocks in my non-RRSP WebBroker account.
    Slowly, I will transition away from RRSP contributions and into dividend-paying stocks.

    My goal (also) is a dividend-paying stock portfolio that will yield an annual income of >$30,000 when I am 55. I am 35 now.

    Thanks everyone for your input in advance!!!!!!!

  • Maverick January 23, 2009, 11:35 pm

    Hi

    Foster Advocate try http://www.shareowner.com. free dividend reinvestment up to 0.0001 of a share.

    good luck

  • DRIPtileyeDROP March 11, 2009, 1:45 pm

    I, too, follow the Foster regime, however, I wonder how he is holding up presently. Some of the transactions he put in place in his most recent book (e.g. BAC put options) have not faired well. I am assuming he takes it all in stride.

    The important thing with DRIP and SPP is to keep meticulous records. I have been doing this, intermittently, for nearly twenty years and when you wish to sell some of these positions you will be glad that you kept meticulous records.

    Also, if you do not understand Trust Unit organization do not invest in them. 2011 is sooner than you think and, although I am cautiously hopeful that this investment vehicle will not portend disaster for its holders, I would prefer to be invested in going-concern corporations. I will allow that REIT’s will be untouched by the new legislation.

    DRIPtileyeDROP.

  • Canadian Finance April 24, 2009, 3:55 am

    DRIPtileyeDROP,

    I don’t think he’s doing too well. Canadian Capitalist wrote about this recently…

    http://www.canadiancapitalist.com/what-went-wrong-with-the-derek-foster-strategy/

  • Newbie Investor May 15, 2009, 3:50 pm

    Similar to Foster Advocate, looking to execute DRIPs and SPPs. Which institution should be used for accomplishing this goal. Presently have a BMO InvestorLine account. Don’t think this can be done there or should be due to the brokerage fees

  • Eva-Novice July 24, 2009, 7:06 pm

    Bell Aliant Regional Comm. Income Fund BA.UN.TO does somebody know if this is some close funds etc? is it good idea to buy it?
    thank you
    Eva-and still Novice

  • Chris July 28, 2009, 5:53 pm

    My favourite high-yielding Canadian trust units right now are REI.UN and PWT.UN. I see a good amount of discussion of REITs here but how do people about energy trusts?

  • Chinstrap July 29, 2009, 10:09 am

    I like Calloway REIT better than Riocan. Riocan just disappointed on Q1 FFO numbers.. If it comes back enough it might be a buy. It’s just toobig IMO and lower yielding. Calloway is similar but smaller and its assets are anchored 75% by Walmarts and Canadian Tire under LT leases: solid. I started buying at $10 with a 15.5% yield. Now it’s at $14 yielding 11%…

    For a riskier play I also own Chartwell Retirement Res. REIT. Started buing at $4.50 with a 16% yield. now at 5.70 and yielding 12.6%.. still pretty good. but risk on debt refinancing but not until next year..

  • Eva -Novice July 29, 2009, 12:52 pm

    it would be nice if everybody reffering to some stock would list the stock TSX symbol.
    Thanks
    Eva-Novice

  • Canada Deals October 4, 2009, 1:32 am

    Thanks @Chris, I looking into Canadian energy trusts after you mentioned it above. More info http://www.canadianenergytrusts.ca/.

  • Muneer September 24, 2010, 2:37 am

    Foster Follower, the companies you are talking about are the S&P 500 dividend aristocrats. What are dividend aristocrats? They are

    The S&P 500’s Dividend Aristocrats is the most prestigious list of dividend paying stocks in the world that are tracked by S&P 500 Index. The Dividend Aristocrats Index is a list of companies that have consistently grown their dividends for at least 25 consecutive years. The index is so strict that if a company misses even 1 year of growing its dividend, it is eliminated from the Dividend Aristocrats Index.

    * Exxon (XOM) – 27 years
    * Clorox Co (CLX) – 32 years
    * McDonald’s Corp (MCD) – 33 years
    * Wal-Mart Stores (WMT) -35 years
    * Coca-Cola Co (KO) – 47 years
    * Johnson & Johnson (JNJ) – 47 years
    * Procter & Gamble (PG) – 53 years

    When you think about multinational companies, Canada probably isn’t the first country that comes to mind. Instead, we think of McDonald’s, Wal-Mart, Altria (Philip Morris) – the usual suspects riding the scapegoat of globalization. But in fact Canada has its multinationals, too – you might not see them on the average “most wanted” list, but these companies have added incredible value around the world and are among not only Canada’s best, but the best in their respective industries. Even better, they all pay dividends.

  • Aaron December 23, 2010, 8:57 pm

    I was wondering what would be a good plan for my tax free savings account. I am interested in dividend income mostly and was thinking of CDZ and XRE for sure. I will have $15,000 room available next year. Would it be a bad idea to put 50/50 CDZ and XRE? Would that be diversified enough? What do you think would be a better plan? Also I have over $50,000 in streetwise funds with ING Direct and was wondering if it was a bad idea now to keep adding to it. Should I sell and start buying ETF funds instead with the money? I have read some suggestions that the streetwise funds are really for people just starting out with small amounts.

  • Hugh Johnson February 2, 2011, 10:03 pm

    High,

    I’m new to your site, like it very much, very informative.

    Question: Is there a list that shows just Canadian companies that pay dividends and every 2,3 or 5 years pay a special dividend. Trying to locate or
    find if such a list exist.

    Best Regards,

    Hugh Johnson
    Ottawa, ON

  • Steven Zuckerborg February 28, 2011, 4:51 pm

    You have indicated some really high dividend yields however, be careful the companies are not forced to cut their dividends in the near future. Also when a company’s stock price drops a lot, the dividend yield automatically goes higher, so watch for a problem with the underlying operations of the company.

    You should also inspect the dividend payout ratio of most companies, and anything in excess of 80% signals trouble ahead & potential dividend cuts.

    Also have a read at 5 tricks to successful dividend investing at http://www.high-yield-dividend-stocks.com/successful-dividend-investing.html

    These are not really tricks but essential must-dos for any income investor. For example, a sample trick from the article that I like the most is:

    Don’t Chase High Yield Dividend Stocks without Understanding the Business

  • John July 15, 2011, 10:51 pm

    I own Riocan , Innvest and Enbridge all are dividend paying trusts. These trust have gone up and down buy my average dividend has been over 7%.

  • Pabs December 1, 2011, 12:17 am

    I started trading penny stocks in 2002 looking to make what I had lost in the market after the dot.com bubble burst in 2001.Your article is a very smart approach to gaining long term profits. Quality companies which sustain their increase in shareholder value.

  • Brett Lockerbie March 30, 2012, 10:48 am

    Hellooooooo??? Why isn’t BCE even mentioned here? They clearly are one of the best dividend paying stocks out there, much better than Shaw and others that are mentioned in this article. I think the author missed the boat on this one.

  • stono June 21, 2012, 2:50 pm

    not sure if its a good one , you will see that the dividend has gone down over the years..which is not what you want..

  • Rajendra December 7, 2014, 1:54 pm

    Hi, Eva,
    If I have some penny stock and I heard company is closing than I will loose all money I invested ?Or if they selling company to other company than what about our investment?

    Thanks,

  • SST March 20, 2015, 11:57 am

    I recently came across this site with a seemingly wealth of data:
    http://www.dividendgrowthinvestingandretirement.com/canadian-dividend-all-star-list/

    For those not wanting to wade through the spread sheets, here’s a quick break-down of key figures:

    Canadian Dividend All-Stars (65 companies; averages):

    Increase Streak: 11.6 years
    Annual Dividend Growth Rate (10 yr): 15%

    Current Yield: 2.9%
    Standard Deviation: 0.42

    Payout Ratio: 67%
    P/E (TTM): 28

    A popular strategy using these stocks is to hold them within a Smith Manoeuvre account.

    I recently put out a question as to whether or not implementing the Smith Manoeuvre right now would be wise and financial beneficial. The SM guru, Ed Rempel stated, “If the market was hugely overvalued, say P/E over 30…I would be more cautious.” As one can see, the P/E of these All-Star stocks is 28, very near that point of caution.

    However, the average P/E of those companies with increases of 15 years of more is 21, slightly more reasonable, but still much higher than the Canadian market as a whole.

    Perhaps a more useful metric is the dividend growth rate. The current yield is ~3%, roughly the same interest as you would pay in a SM HELOC. Interest rates have historically risen 0.5%/yr (please correct if wrong!), yet the average dividend growth of these All-Stars is 1.5%/yr (simple average).

    As Rempel states, the SM should be a long-term wealth strategy. With dividends growing three times as fast as loan interest, not to mention capital gains (hopefully), the Smith Manoeuvre might be of interest to those with the right attitude.

    (My own caveat is to do more digging into the source of the dividends, especially since 2009. If the source of payouts cannot be sustained, e.g. debt, then I would be exceptionally cautious on the issuer.)

  • SST March 21, 2015, 12:52 pm

    Sometimes, these days, proof-reading is a luxury.
    The figures should read: 0.3%/yr and 15%/yr.

    Thus, starting the SM now, with both rates ~3%, in 25 years the LOC rate might be 10% but your initial dividends will have a 50% yield. Time, and a nice chunky downpayment to kick things off, are your best tools.

    Another reason to go with dividend Achievers/All-Stars et al is to outpace inflation. The long-term (50 year) dividend growth rate of the S&P 500 is ~5.5%; inflation is ~4%. 1.5% of “fat” isn’t too comforting in the real world, especially considering dividends grew faster than inflation only 60% of the time. Ergo, grab what you can, when you can.

Leave a Comment

Pinterest
Email
Print