Dividend growth stocks are a type of stock that can provide investors with both income and potential for long-term capital appreciation. These stocks are issued by companies that have a history of increasing their dividend payments to shareholders over time, which can provide investors with a reliable and growing source of income.
Dividend growth stocks are particularly popular among income-seeking investors who are looking for reliable sources of income, such as retirees and other long-term investors.
Dividend growth stocks can offer a range of benefits to investors. First and foremost, they can provide a reliable and growing source of income. Companies that are able to increase their dividends over time often have stable and predictable cash flows, which can help to provide investors with a consistent stream of income.
In addition, dividend growth stocks can offer potential for long-term capital appreciation, as companies that are able to grow their earnings and dividends over time often see their stock price rise as well.
Investors who are interested in dividend growth stocks should conduct their own research and analysis to identify companies that have a history of consistent dividend growth and strong financial fundamentals.
Factors such as a company’s competitive position, growth prospects, and financial health should all be considered when evaluating dividend growth stocks. By investing in a diversified portfolio of dividend growth stocks, investors can potentially generate both income and capital appreciation over the long term.
What Are Dividend Growth Stocks?
Dividend growth stocks are stocks of companies that have a history of increasing their dividend payments to shareholders on a consistent basis. These stocks are popular among income-seeking investors who are looking for reliable sources of dividend income, as well as investors who are looking for long-term growth potential.
Dividend growth stocks are typically companies that have strong financial fundamentals, a competitive position in their industry, and a track record of consistent earnings growth. These companies are able to pay and increase dividends to shareholders because they have a stable and predictable cash flow, and are able to grow their earnings over time.
Investing in dividend growth stocks can provide investors with a number of benefits. First and foremost, these stocks can provide a reliable and growing source of income. They can also offer the potential for capital appreciation, as companies that are able to grow their earnings and dividends over time often see their stock price rise as well. In addition, dividend growth stocks can help investors to build a diversified portfolio that includes companies from a range of different sectors and industries.
It’s important to note that not all dividend-paying stocks are considered dividend growth stocks. Some companies may pay a high dividend yield but have a history of inconsistent or no dividend growth, while others may pay a low dividend yield but have a strong track record of consistent dividend growth. Investors should consider a range of factors, including a company’s financial health, competitive position, and growth prospects, before investing in dividend growth stocks.
Top 20 Canadian Dividend Growth Stocks
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Royal Bank of Canada (RY.TO) – Dividend Yield: 3.4%, YOY Dividend Growth: 3.9%. Royal Bank of Canada is one of Canada’s largest banks and offers a range of financial services to individuals and businesses. The company has a strong history of consistent dividend growth and has increased its dividend every year for the past 10 years. Its stock growth rate over the past 5 years has been around 9% CAGR.
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Toronto-Dominion Bank (TD.TO) – Dividend Yield: 3.6%, YOY Dividend Growth: 7.0%. Toronto-Dominion Bank is another of Canada’s largest banks, offering a range of financial services to individuals and businesses. The company has a strong track record of dividend growth, with a history of increasing its dividend every year for the past 10 years. Its stock growth rate over the past 5 years has been around 8% CAGR.
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Enbridge Inc. (ENB.TO) – Dividend Yield: 6.9%, YOY Dividend Growth: 3.1%. Enbridge is a leading North American energy infrastructure company that operates pipelines, natural gas utilities, and renewable energy facilities. The company has a history of consistent dividend growth and has increased its dividend every year for the past 26 years. Its stock growth rate over the past 5 years has been around 1% CAGR.
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Canadian National Railway (CNR.TO) – Dividend Yield: 1.9%, YOY Dividend Growth: 7.1%. Canadian National Railway is one of Canada’s largest railway companies, operating a network of tracks and terminals across North America. The company has a history of consistent dividend growth and has increased its dividend every year for the past 24 years. Its stock growth rate over the past 5 years has been around 10% CAGR.
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Canadian Pacific Railway (CP.TO) – Dividend Yield: 0.9%, YOY Dividend Growth: N/A. Canadian Pacific Railway is another of Canada’s largest railway companies, operating a network of tracks and terminals across North America. The company has a history of consistent dividend growth and has increased its dividend every year for the past 6 years. Its stock growth rate over the past 5 years has been around 14% CAGR.
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Brookfield Asset Management Inc. (BAM-A.TO) – Dividend Yield: 1.1%, YOY Dividend Growth: 12.0%. Brookfield Asset Management is a global alternative asset manager that invests in real estate, infrastructure, renewable power, and private equity. The company has a history of consistent dividend growth and has increased its dividend every year for the past 11 years. Its stock growth rate over the past 5 years has been around 16% CAGR.
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Bank of Nova Scotia (BNS.TO) – Dividend Yield: 4.6%, YOY Dividend Growth: 2.7%. Bank of Nova Scotia is one of Canada’s largest banks and offers a range of financial services to individuals and businesses. The company has a history of consistent dividend growth and has increased its dividend every year for the past 10 years. Its stock growth rate over the past 5 years has been around 6% CAGR.
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Pembina Pipeline Corporation (PPL.TO) – Dividend Yield: 6.6%, YOY Dividend Growth: 2.7%. Pembina Pipeline is a leading North American energy infrastructure company that operates pipelines, natural gas utilities, and midstream assets. The company has a history of consistent dividend growth and has increased its dividend every year for the past 10 years. Its stock growth rate over the past 5 years has been around 4% CAGR.
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TransCanada Corporation (TRP.TO) – Dividend Yield: 5.0%, YOY Dividend Growth: 7.4%. TransCanada is a leading North American energy infrastructure company that operates pipelines, natural gas storage facilities, and power generation plants. The company has a history of consistent dividend growth and has increased its dividend every year for the past 22 years. Its stock growth rate over the past 5 years has been around 6% CAGR.
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Telus Corporation (T.TO) – Dividend Yield: 4.5%, YOY Dividend Growth: 7.2%. Telus is one of Canada’s largest telecommunications companies, offering mobile, internet, and television services to customers across the country. The company has a history of consistent dividend growth and has increased its dividend every year for the past 17 years. Its stock growth rate over the past 5 years has been around 8% CAGR.
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Fortis Inc. (FTS.TO) – Dividend Yield: 3.7%, YOY Dividend Growth: 5.9%. Fortis is a North American utility company that operates regulated electric and gas utilities in Canada, the US, and the Caribbean. The company has a history of consistent dividend growth and has increased its dividend every year for the past 48 years. Its stock growth rate over the past 5 years has been around 6% CAGR.
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Canadian Utilities Limited (CU.TO) – Dividend Yield: 5.2%, YOY Dividend Growth: 5.5%. Canadian Utilities is a diversified energy infrastructure company that operates electric and gas utilities, pipelines, and energy storage facilities in Canada and Australia. The company has a history of consistent dividend growth and has increased its dividend every year for the past 49 years. Its stock growth rate over the past 5 years has been around 5% CAGR.
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Emera Inc. (EMA.TO) – Dividend Yield: 4.3%, YOY Dividend Growth: 2.2%. Emera is a North American utility company that operates regulated electric and gas utilities in Canada, the US, and the Caribbean. The company has a history of consistent dividend growth and has increased its dividend every year for the past 14 years. Its stock growth rate over the past 5 years has been around 6% CAGR.
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Intact Financial Corporation (IFC.TO) – Dividend Yield: 2.5%, YOY Dividend Growth: 5.5%. Intact Financial is a Canadian property and casualty insurance company that offers a range of insurance products to individuals and businesses. The company has a history of consistent dividend growth and has increased its dividend every year for the past 16 years. Its stock growth rate over the past 5 years has been around 15% CAGR.
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National Bank of Canada (NA.TO) – Dividend Yield: 3.7%, YOY Dividend Growth: 6.3%. National Bank of Canada is one of Canada’s largest banks and offers a range of financial services to individuals and businesses. The company has a history of consistent dividend growth and has increased its dividend every year for the past 11 years. Its stock growth rate over the past 5 years has been around 7% CAGR.
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CIBC (CM.TO) – Dividend Yield: 4.5%, YOY Dividend Growth: 5.5%. CIBC is one of Canada’s largest banks and offers a range of financial services to individuals and businesses. The company has a history of consistent dividend growth and has increased its dividend every year for the past 9 years. Its stock growth rate over the past 5 years has been around 4% CAGR.
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Canadian Pacific Railway Limited (CP.TO) – Dividend Yield: 0.8%, YOY Dividend Growth: 15.6%. Canadian Pacific Railway is a Canadian transportation company that operates a network of railways across Canada and the US. The company has a history of consistent dividend growth and has increased its dividend every year for the past 7 years. Its stock growth rate over the past 5 years has been around 15% CAGR.
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Bank of Montreal (BMO.TO) – Dividend Yield: 3.6%, YOY Dividend Growth: 6.5%. Bank of Montreal is one of Canada’s largest banks and offers a range of financial services to individuals and businesses. The company has a history of consistent dividend growth and has increased its dividend every year for the past 9 years. Its stock growth rate over the past 5 years has been around 4% CAGR.
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Canadian Natural Resources Limited (CNQ.TO) – Dividend Yield: 4.4%, YOY Dividend Growth: 11.5%. Canadian Natural Resources is a Canadian oil and gas exploration and production company that operates a diverse portfolio of assets in Canada, the UK North Sea, and Offshore Africa. The company has a history of consistent dividend growth and has increased its dividend every year for the past 21 years. Its stock growth rate over the past 5 years has been around -6% CAGR.
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Brookfield Asset Management Inc. (BAM.A.TO) – Dividend Yield: 1.0%, YOY Dividend Growth: 11.1%. Brookfield Asset Management is a global alternative asset manager that specializes in real estate, renewable power, infrastructure, and private equity. The company has a history of consistent dividend growth and has increased its dividend every year for the past 10 years. Its stock growth rate over the past 5 years has been around 15% CAGR.
Final Words
In conclusion, Canadian dividend growth stocks are popular among investors seeking income and long-term growth. These stocks have a strong history of increasing dividends year-over-year, providing investors with a steady and reliable income. The 20 Canadian dividend growth stocks we discussed offer a diverse range of industries and sectors, providing investors with options to suit their individual investment goals and risk tolerance.
It’s important to note that while dividend growth stocks can offer attractive returns, they still carry risks and should be part of a diversified investment portfolio. It’s always advisable to do your own research and consult with a financial advisor before making any investment decisions.