Top Ten 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 50 dividend stocks! Hahaha!).

NAME	TICKER	PRICE (AS OF NOV 23rd 09)	DIV YIELD
Yellow Pages Income Fund	YLO-U	$5.34	18.81%
Penn West Energy Trust	PWT-U	$19.18	15.37%
Enerplus Resources Fund	ERF-U	$24.52	11.02%
ARC Energy Trust	AET-U	$20.38	7.77%
Biovail Corp	BVF	$15.28	6.01%
BCE Inc	BCE	$27.72	5.83%
TELUS Corp	T	$34.88	5.50%
Canadian Imperial Bank of Commerce/Canad	CM	$69.05	5.25%
TransAlta Corp	TA	$21.85	5.22%
Bank of Montreal	BMO	$54.01	5.18%

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%). As you can see, there are at least 2 banks offering a dividend yield over 5%. 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?

From the Top paying dividend stocks, I obviously have a few favourite picks:

- While I don’t really like CIBC (they have a magic touch and tend to get into more trouble than other Canadian banks), I really like BMO. They show a stable portrait and they still have enough money to keep paying their dividend. I would personally choose BMO over CIBC anytime.

- I also prefer Telus over BCE. While BCE deals failed in 2008 (thx to the crisis!), they show no clear orientation to please their clients (I have another post about this topic coming soon). I feel they are still stuck in their monopolistic mindset and can’t find a way to hear their clients. Telus is multiplying their efforts to become a leader in the telecom industry and I think they will achieve their goal.

- I am not too kind on income trusts right now as their corporate structure will change in 2011. This is less than 2 years away and I would rather aim for long term investments.

Funny enough, I found more interesting dividend paying stocks in the bottom 20. So I thought I would do 2 posts and come back tomorrow with the second part of the top dividend stocks in Canada

Disclaimer: I do not own any of those stocks. Remember, I have sold all my stocks to invest in my company! You can trade those stocks through a brokerage account at Questrade.

image source: Kevin Zhengli

• Top 20 Canadian Dividend Stocks
• TSX 60 Dividend Yield and Ex-Dividend Date for February
• Are Canadian Banks Stocks Still Good Investments?
• Canadian Dividend Stocks – Ex-Dividend Date
• Top 10 Dividend Stocks in Canada

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