Canada's Best Dividend Stocks 2019: This Year's All-Stars

Dividend All-Stars 2019

Canada’s big banks and insurance companies are always strong dividend plays, but other firms passed the test this year too. See the All-Star list

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The All-Star leaders

The big banks are often strong performers—this year is no exception. Three of the big six banks got As this year. They include the Bank of Nova Scotia (BNS), which sports a one-year dividend-per-share growth rate of 7.9% and offers a yield of 4.4%. The second is CIBC (CM), which offers a 4.4% yield and a one-year divided-per-share growth rate of 4.7%. TD Bank (TD) is the third A-grader. It pays a 3.4% yield and has the strongest momentum of the three banks with a five-year return of 106%. As it happens, both CIBC and TD picked up top marks last year.

Despite recent interest rate hikes by the Bank of Canada, the three banks pay higher yields to investors in the form of dividends than they offer on their “high interest” savings accounts. But you should be aware that dividend income isn’t as safe as a savings account. It may falter in a serious economic downturn.

The five remaining A-graders are insurance firms and three of them also got top marks last year. The returnees include Great-West Life (GWO) and Sun Life Financial (SLF), which provide yields of 4.9% and 3.7%, respectively. Insurance-heavy conglomerate Power Corporation of Canada (POW) also got top markets last year. It pays a hefty 5.4% dividend yield and trades for less than book value. The company owns stakes in Power Financial, Great-West Life, and IGM Financial.

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The first new insurance firm to the A-list this year is Genworth MI Canada (MIC). It provides mortgage insurance and pays a 4.3% yield while trading at 8 times earnings. Mind you, the company’s stock could suffer in the event of a real estate crash.

The last member of the A-list is Industrial Alliance Insurance (IAG), which offers life and health insurance to Canadians. Its stock trades at just over book value and pays a 3.2% dividend yield.

The MoneySense A-Team

★ ★ ★ ★ ★
Bank of Nova Scotia (BNS)
CIBC (CM)
Genworth MI Canada (MIC)
Great-West Lifeco (GWO)
Industrial Alliance Insurance (IAG)
Power Corp (POW)
Sun Life Financial (SLF)
TD Bank (TD)
★ ★ ★ ★ ★

* View the full table to see all of the underlying data


Solid prospects

Just a step behind, the B-list starts with the Royal Bank of Canada (RY) and National Bank (NA), which both happen to yield 3.8%. National Bank is a returning B-grader while Royal Bank is the biggest bank in the land and the largest Canadian dividend stock based on its market capitalization of $150 billion.

Speaking of the market, stock exchange provider TMX Group made it into the B-list this year with a dividend yield of 2.7% and a five-year return of 109%, which is the best of the bunch.

Insurance continued to be a theme with Power Corp’s subsidiary Power Financial (PWF) picking up a B-grade. The firm pays a hefty 5.7% dividend yield but has a lacklustre record with a five-year total return of just 18%.

Conglomerate E-L Financial (ELF) made the B-list again this year. It mainly owns Empire Life and offers a paltry 0.6% yield, which may cause some dividend investors to turn their noses up at it. But it is a bargain because it trades at just 7 times earnings and 0.6 times book value.

In an eclectic mix, auto-parts firm Magna (MG) and oil giant Suncor Energy (SU) picked up B-grades both this year and last. The former offers a 2.5% yield while the latter a 2.9% yield. Magna trades a relatively low 8 times earnings while Suncor at a much loftier 19 times earnings. (Magna pays its dividend in U.S. dollars.)

Electric utility Fortis (FTS) made the B-grade again and pays a 4.1% yield. While the stock is a little on the expensive side at 18 times earnings, it has grown its dividend-per-share by 6.3% over the last 12 months.

Grocery store operator Metro (MRU) picked up a B. It provides a 1.8% yield, has grown its dividend-per-share by 10.8% over the last year, and trades at just 5 times earnings. Last, but not least, West Fraser Timber (WFT) trades at 7 times earnings, pays a relatively paltry 1.1% yield. But its dividend-per-share jumped 81.8% over the last year.

The MoneySense B-Team

★ ★ ★ ★
E-L Financial (ELF)
Fortis (FTS)
Magna International (MG)
Metro (MRU)
National Bank of Canada (NA)
Power Financial (PWF)
Royal Bank of Canada (RY)
Suncor Energy (SU)
TMX Group (X)
West Fraser Timber (WFT)
★ ★ ★ ★

* View the full table to see all of the underlying data