First things first, if you are interested in dividend investing, I strongly suggest you to download your free copy of Dividend Investing: How To Build a Never Ending Cash Distributor from The Dividend Guy Blog. I’ve also created a unique resources about Canadian Dividend Stocks.
On the Canadian stock market, we find a lot of great dividend paying companies. Considering the economic context, I would rather invest in a Canadian corporation than any other companies. Since the banking system has proven to be as solid as rock, Canadian stocks have their feet on solid ground enabling them to jump even higher. If you had missed yesterday’s post, you will find the top 10 Canadian dividend stocks. In order to build the top 10 Canadian Dividend Stocks, we used some severe criteria (such as a minimum dividend growth requirement and dividend payout ratio under 70%).
Unfortunately, 10 Canadian dividend stocks might not be enough to build a solid dividend portfolio. In order to find more high quality dividend stocks, I have changed some of my search criteria. Here’s how I have created the best 20 Canadian Dividend Stocks:
- Dividend minimum yield: 3%
- Dividend maximum yield: no maximum
- Dividend payout ratio: under 80%
- P/E ratio: under 20
There are obviously some overlaps with the top 10 but it still gives you more options with softer search criteria. The goal of this list is to include stocks that might be overpriced or having a higher dividend payout ratio due to specific and known situations. This can enlarge your scope and give you more options to include Canadian dividend stocks in your portfolio.
***last edit May 11th 2012***
Ticker Name Price Dividend Yield Payout Ratio PE_RATIO
SCU Second Cup Ltd/The 7.29 8.23 11.17 5.4
CHW Chesswood Group Ltd 7.31 8.21 34.02 13.05
CFX Canfor Pulp Products Inc 12.31 7.15 58.67 12.19
TA TransAlta Corp 16.58 7 66.9 13.93
SPS/A Sportscene Group Inc 8.75 6.86 64.49 10.29
DH Davis & Henderson Corp 19.28 6.43 69.59 11.98
WJX Wajax Corp 50.82 6.38 55.78 13.44
PWT Penn West Petroleum Ltd 17.08 6.32 79.31 12.47
RSI Rogers Sugar Inc 5.55 6.13 73.98 18.5
COS Canadian Oil Sands Ltd 23.05 6.07 46.59 9.64
AD Alaris Royalty Corp 19.5 5.85 51.53 19.9
GNV Genivar Inc 26.5 5.66 78.62 13.87
MIC Genworth MI Canada Inc 20.58 5.64 33.65 6.53
BCE BCE Inc 40 5.43 71.03 12.66
FRC Canyon Services Group Inc 11.4 5.26 0 7.55
PM Prism Medical Ltd 6.05 5.25 47.43 10.8
CF Canaccord Financial Inc 7.67 5.22 19.58 11.45
CET Cathedral Energy Services Ltd 5.92 5.07 32.58 8.97
TCL/B Transcontinental Inc 11.44 5.05 40.1 5.75
CFN Carfinco Financial Group Inc 8.35 5.03 68.99 11.88
The first thing I liked when I pulled out the top 20 dividend paying stocks is that they are all over 3% (which is about the rate for a 5 years certificate of deposits). But what is even more interesting is that dividend income is less taxed than interest income. Therefore, the 3% dividend yield worth a lot more than the 3% from a CD.
Top Canadian Dividend Stocks = Financial Sector
Among the top 20 Canadian Dividend Stocks, you find a lot of financials. It is normal as the financial sector represent more than 20% of the Canadian Stock Market. Canadian Banks are heavily regulated and evolve in a ogopoly. These 2 factors contribute to make them some of the best Canadian Dividend payers on the stock market. Overtime, they have built a reputation of dividend stocks and now most Canadian investors count on banks in their portfolio to bring both capital growth and dividend growth. If you are looking to build a Canadian Dividend portfolio, Canadian banks should be place at the core of your investment account.
There are more to the Top 20 Canadian Dividend Stocks
However, you are also able to find other solid companies paying great dividends. After the 2008 stock market crash, others companies have proven that they are as solid as a rock. Communications and medias seem to be the next big dividend payer in Canada. They actualy evolve in a similar type of market as banks since they don’t have much competitors. Therefore, each of them have their fair share of the market and generate enough cash flow to constantly increase their dividend payouts. This is why they are among the best 20 Canadian Dividend Stocks.
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