We’ve graded the largest, most liquid Canadian dividend stocks based on yield, stability and value. To earn top marks, each company must demonstrate its ability to provide a steady flow of income to investors, at a reasonable price.
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The year 2023 couldn’t have arrived fast enough for Canadian investors, as 2022 was downright nasty for investing. There was nowhere to hide. No safe havens. We know stocks have ups and downs, but bonds are supposed to be reliable and offer stability, especially during rough times. But last year, they behaved almost stock-like, posting once-in-a-generation double-digit losses in 2022. Many Canadian investors expected cryptocurrencies to have their moment in the spotlight. Unfortunately, they were still not ready for prime time. We’ve witnessed how the response to a global pandemic can affect inflation and interest rates, and what it can do to asset prices. What does that mean for Canadian investors looking for stocks that pay?
After coming through what felt like the Red Wedding of 2022, to liken it to a Game of Thrones plot, this year many investors would be inclined to patiently cash out of the markets, but inflation is eroding purchasing power for Canadians, and putting their savings in a basic savings account will put them even further behind. It’s counterintuitive during these times to continue investing in assets that will help protect your purchasing power.
Dividend stocks can provide some level of predictable income to buffer market volatility, but there’s no guarantee. For example, last year, the iShares S&P/TSX Canadian Dividend Aristocrats Index ETF and Vanguard FTSE Canadian High Dividend Yield Index ETF were down 8.09% and 4.3%, respectively. And that’s marginally better than the broader S&P/TSX Composite Index, which posted a 8.5% loss in 2022. It appears more volatility will come in 2023.
The recent aggressive interest rate hikes by central banks around the world (even historically dovish Japan moved the needle upward on interest rates) created inverted yield curves, which typically have been good indicators of impending recessions.
The “people” part of the People’s Republic of China had enough of COVID lockdowns and began questioning how the pandemic was playing out beyond their borders, especially after watching the maskless fans cheer on World Cup matches. (That led to censorship of the stadium stands.) Following widespread protests, China rolled back COVID restrictions in December. The country is now experiencing a health crisis that could have major economic effects globally. While Wall Street and Bay Street analysts are pounding the table for lower interest rates in a bid to stave off the calamity, it’s possible that inflation will remain sticky.
But dividend-paying stocks still have a place in many Canadians’ portfolios. For a critical mass of investors, building exposure to stocks paying increasing dividends over a long period of time is still a solid investment strategy. And paying stocks still have a purpose in 2023.
This year will bring an investing environment Canadians haven’t seen since prior to the “great financial crisis” of 2007/08: options for high-yielding fixed-income investments. With interest rates near zero for most of the past 15 years, options for yield have been extremely limited, forcing investors to take on more risk than they are comfortable with to achieve decent growth in their savings. With interest rates rising, traditional savings vehicles (like guaranteed investment certificates, a.k.a. GICs) have become more palatable. And, after years of leading a lifestyle based on “fear of missing out” (a.k.a. FOMO), Canadian investors can now choose from more investment vehicles that are aligned with their personal risk profiles and value systems.
Dividend-paying stocks are an option if you are seeking a stable stream of income and the potential for capital growth in your portfolio. If you invest in the right dividend-paying stocks, you can get the best of both. However, finding those stocks is the challenge.
One of the misconceptions about dividend stocks is that they are immune to the fluctuations of the broader stock market. The truth is: Far from it. Stocks are stocks are stocks, even ones paying dividends. You’re just as likely to lose money owning a dividend-paying stock as you are owning a non-dividend-paying growth stock.
This list of the best dividend stocks was created by MoneySense editors 16 years ago to help identify dividend-paying Canadian companies well positioned to withstand any shocks, with shares at palatable price points. But even with these promising picks, you can’t let your guard down. You have to do your homework, invest for the long term and expect volatility. (For more on this ranking, including data on yield, dividend growth, stock cash-flow generation, and value of stocks, you can read our detailed methodology.)
We’ve graded the largest, most liquid Canadian dividend stocks based on yield, stability and value. To earn top letter-grade marks, each company had to demonstrate its ability to provide a steady flow of income to investors, at a reasonable price. Rank 1 through 10 are categorized as tier 1 (shown in green below), and 11 through 20 are tier 2 (shown in blue). Rankings were based on data as of November 30, 2022.
To view all the data in the table, slide the columns right or left using your fingers or mouse. You can filter or rearrange the rankings by using the search tool or clicking on column headings. You can also download the data to your device in Excel, CSV and PDF formats.
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What was the base date utilized for your calculations of these rankings? Was it year-end 2022?
This is an important omission from your article. Many thanks
Response from Aman Raina: “Rankings were based on data as of November 30, 2022, as cited in the data tables on the Top 100 dividend stocks in Canada and Methodology pages.”
Really miss the more detailed analysis of the former Dividend All Stars sections
This top 100 list is almost useless. Doesn’t show div yield? Or simple A B C ratings? Old lists prior to 2019 were FAR superior.
yes, where are the dividend %
Or simple A B C ratings?
Looks like math salad. It’s too bad as this used to be a helpful starting point to find quality dividend stocks.
Yes I also miss the letter grades and dividend yields.
I will echo the comments of others, the presentation of the data is terrible. I’m sure there is good work that has been done but it’s been rendered useless by the poor presentation. It’s just a data dump with no analysis. I’ve used the lists for a decade or more and increased my wealth substantially focusing on investment in Grade A stocks. Seems like I will go elsewhere for that information now, end of an era for me.
This report is always done in November, why is it never available until March?? I don’t see any explanation of the stability or dividend ratings??
For details on how we determined the scores, please refer to the methodology page: https://www.moneysense.ca/save/investing/stocks/dividend-all-stars-methodology/
While digging the weighting of the various criteria is provided. The table just provides a score. Additional information should be provided, including:
+ Current Yield,
+ Current annual dividend
+ 1 Year growth in the dividend,
+ 5 year annualised growth in the dividend,
+ Dividend payout ratio,
+ All the other material that was used to determine the score for each security…
Without this additional information the table is almost useless…
For details on how we determined the scores, please refer to the methodology page: https://www.moneysense.ca/save/investing/stocks/dividend-all-stars-methodology/