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.
So my fellow Canadian stock pickers, are you wondering what your next buy will be? I recently completed some research among the best dividend paying stocks on the TSX and pulled out the top 10 Canadian dividend stocks (I must say it helps a lot to have a friend working on a trading desk… a few seconds after having sent the email, I received the top 10 dividend stocks! Hahaha!).
In order to find the top 10 Canadian dividend stocks, I had to define important criteria for the selection of my stocks:
– Dividend minimum yield: 3% (so I ignore low dividend yield stocks)
– Dividend maximum yield: 7% (so I ignore abnormalities )
– Dividend payout ratio: under 70% (so I make sure that dividends will be paid consistently)
– Dividend growth: minimum of 5% annualized growth over 5 years
– P/E ratio: under 15
With these criteria, I know I will be able to find the best 10 Canadian Dividend Stocks of the moment. This list will be now updated quarterly and showed on the side bar in the must read section. We will be updating this list quarterly so some of the best canadian dividend stocks may not be there in a few months. Make sure to bookmark this page and take a look quartlerly.
***last edit May 11th 2012***
Ticker Name Price Dividend Yield Payout Ratio PE_RATIO EQY_DPS_NET_5YR_GROWTH
RCI/B Rogers Communications Inc 36.68 4.31 49.01 12.43 65.52
KMP Killam Properties Inc 13.48 4.3 36.23 10.06 44.02
CSU Constellation Software Inc/Canada 95.19 4.16 26.97 12.98 41.18
PSI Pason Systems Inc 13.81 2.9 36.1 12.67 24.9
CTY Calian Technologies Ltd 20.85 4.99 56.69 11.78 22.48
CJR/B Corus Entertainment Inc 24.46 3.92 45.32 13.44 15.8
TCL/A Transcontinental Inc 11.77 4.93 40.1 5.91 15.72
LB Laurentian Bank of Canada 44.42 4.05 33.69 8.92 8.45
ADW/A Andrew Peller Ltd 10.19 3.53 43.12 10.19 8.14
POW Power Corp of Canada 27.25 4.26 52.67 11.8 7.99
I have seen many investors buying dividend stocks over the past few months as they realized that most of those companies are very solid and will continue to pay their dividends. The 2008 crash gave us the great opportunity to buy some of the best companies at a fraction of their value. Even though the Canadian stock market gained more than 40% since March 2009, there is still a lot of room for stock appreciation. Another solid indicator is the high dividend yield offered by this top 10.
For example, bank dividends are usually only high enough to cover inflation (from 2 to 3%). But right now, most of them offer a dividend yield over 3% (and closed to 4%!). In the middle of the crisis (back in December-January), you could have bought banks giving 15% dividend yield. Wasn’t it the right time to buy back then?
If you want to take a look at the trend of the top 10 Canadian Dividend Stocks, you can use this free trend analysis tool:
Trend analysis is an investing tool showing you the trend (according to the moving average) of any Canadian stocks. You can track the progession of the top 10 Canadian Dividend Stocks and try to buy them when they cross their moving average and shows a uptrend.
If you are looking to open a brokerage account, I suggest you use Questrade. It is the cheapest broker in Canada so it’s perfect to buy a few shares of each of those top 10 Canadian Dividend Stocks:
image source: Kevin Zhengli
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