13 Best Canadian Dividend Stocks for 2023

Mrs. T and I are working toward financial independence by investing in dividend stocks and index ETFs. Our plan is to live off dividends so we are always on the lookout for great dividend stocks to invest in. What are some of the best Canadian dividend stocks?

When it comes to picking dividend stocks, it is important to not just look at the dividend yield alone. Many dividend investors fall into the dividend yield trap by only looking at stocks with high dividend yields. We certainly fell into the trap in the past. It is always important to consider the dividend payout ratio to determine whether the dividend payout is safe or not.

Other factors like dividend growth rate, earning history, company revenue growth, return on equities, and cash flow are also important to monitor.

Total return matters. I’d rather have a dividend portfolio yielding 3% and have my principal growing consistently each year than a dividend portfolio yielding 8% but my principal shrinking each year.

• Check out the Best Canadian Dividend Stocks from the DGI community and see which stocks my fellow dividend bloggers picked out.
• Looking for monthly dividends? I listed all the best Canadian monthly paying dividend stocks.
• Looking for US dividend stocks? Check out the best US dividend stocks.

Per our dividend portfolio, we own quite a number of Canadian dividend stocks. We own more Canadian dividend stocks not because of home bias, it’s mostly due to the added cost of exchanging CAD to USD.

Which stocks made my best Canadian dividend stocks list?

Top 13 Canadian Dividend Stocks

Here are my best 13 Canadian dividend stocks for 2023. These picks are based on total return- a combination of dividend growth and stock price appreciation.

We typically add shares to dividend stocks that we already own whenever there’s a pullback or on a day that the market is down. Having said that, if you plan to hold a stock for decades, it’s more important to be in the market and let your stock grow rather than waiting for the right entry price point. Because the right entry point may never happen.

1. National Bank (NA.TO)

National Bank is the sixth-largest bank in Canada with Quebec contributing 62% of its revenues. While the majority of National Bank’s revenue comes from Quebec, the bank is expanding quickly in the rest of Canada.

As you can see, National Bank has done quite well from a share price point of view. In the last five years, NA leads the way in price appreciation compared to the other big five Canadian banks.

From a dividend payout point of view, National Bank was quite impressive as well. The bank has a 5 year dividend growth rate of 9.7%, leading the rest of its peers.

• Sector: Financial Services
• Dividend Yield: 4.07%
• Dividend Payout Ratio: 39.2%
• PE Ratio: 9.91
• 5 Year Dividend Growth Rate: 9.7%
• Dividend Increase Streak: 13 years

I picked National Bank as one of my best Canadian dividend stocks mostly because it’s a smaller player compared to the Big Five Banks. Being a smaller bank, National Bank can adopt strategies and change quicker than the Big Five Banks. The free commission trade offered by National Bank Direct Broker should help National Bank to attract new customers as well.

I believe National Bank will continue to raise its dividends given the payout ratio is on the low end of the historical payout ratio.

2. Manulife (MFC.TO)

Manulife Financial Corporation is the largest insurance company in Canada and the 28th largest fund manager in the world. Many Canadians use Manulife’s products as it is a Canadian multinational insurance company and financial services provider. Manulife operates outside of Canada as well. In Asia it operates under the same Manulife name; in the US the company primarily operates through its John Hancock Financial division.

• Sector: Financial
• Dividend Yield: 5.33%
• Dividend Payout: 35.2%
• PE Ratio: 6.7
• 5 Year Dividend Growth Rate: 10%
• Dividend Increase Streak: 9 years

Manulife has more than 125 years of experience and serves over 26 million customers. Manulife was one of the first dividend stocks that I purchased when I first started with DIY investing.

Since insurance companies usually do well in a rising interest rates environment, I would expect Manulife to improve its revenues and profitability. The high dividend yield also makes Manulife quite attractive for dividend growth investors.

3. Alimentation Couche-Tard (ATD)

Alimentation Couche-Tard doesn’t have the highest dividend yield but its dividend growth rate over the last ten years has been fantastic. ATD also has had some fantastic revenue growth and strong cash flow. The strong growth is contributed to the 14,000 convenience stores across the globe.

• Sector: Consumer Defensive
• Dividend Yield: 0.90%
• Dividend Payout: 14.9%
• PE Ratio: 16.27
• 5 Year Dividend Growth Rate: 21.2%
• Dividend Increase Streak: 13 years

While the initial dividend yield is extremely low, ATD has been growing its dividends at an impressive rate. For me, I think ATD is a great Canadian dividend stock to hold if you want something defensive and your investment timeline is long.

Alimentation Couche-Tar is planning to add EV charging stations at its convenience store locations in the US, Canada, and Norway. This kind of rollout wouldn’t be possible without a vast network of retail stores.

4. Equitable Group (EQB)

Equitable Group serves a growing number of Canadian through Equitable Bank. Equitable Bank has grown over the years to become the seventh largest independent Schedule I bank by assets in Canada.

EQB offers Canadian the chance to earn high interest rates with their money and not pay fees for everyday banking. Positioning themselves differently than traditional banks, EQB has more than 290,000 customer base in Canada and growing.

• Sector: Financial Services
• Dividend Yield: 2.29%
• Dividend Payout Ratio: 15.2%
• PE Ratio: 6.27
• 5 Year Dividend Growth Rate: 20.6%
• Dividend Increase Streak: 1 year

Equitable Group recently announced that it entered an agreement to purchase Saskatoon-based Concentra Bank for $470M. This is a great method for EQB to continue to grow and expand its customer base.

In recent years, EQB has announced some pretty hefty dividend increases. With the low payout ratio, I expect EQB to continue to raise dividends at an impressive rate.

5. Enbridge (ENB.TO)

Enbridge is one of the leading North American infrastructure companies with a vast network of pipelines. In fact, Enbridge owns an extensive network of about 192,000 miles of natural gas and NGL pipelines across North America and the Gulf of Mexico.

Since our reliance on natural gas and crude oil isn’t going away anytime soon, we will need to continue to rely on Enbridge’s pipelines to transport these valuable assets across North America. Environmental concerns and the inability to build new pipelines mean Enbridge’s existing pipeline network is even more valuable than before.

• Sector: Energy
• Dividend Yield: 6.45%
• Dividend Payout Ratio: 130.9%
• PE Ratio: 18.8
• 5 Year Dividend Growth Rate: 7.3%
• Dividend Increase Streak: 27 years

Enbridge has a history of long term value creation for its shareholders. The Enbridge management expects a 5-7% dividend growth rate moving forward. Given the high yield already, this kind of dividend growth rate is pretty decent.

Since Enbridge operates like a utility company in many ways, investors can’t just look at the payout ratio. To get a more accurate sense of the safety of dividend payouts, investors need to look at Enbridge’s free cash flow and distributable cash flow per share. Both of these numbers look quite solid so I expect Enbridge to continue with its high yield and target dividend growth rate for years to come.

Despite knowing as a pipeline company, transporting natural gas and oil across North America, Enbridge is working to increase its renewable footprint.

For investors looking for income, Enbridge is a great choice. It definitely falls under the high yield low dividend growth category.

6. Brookfield Asset Management (BAM)

Brookfield Asset Management is a leading global alternative asset manager with over $750 billion of assets under management across real estate, infrastructure, renewable power, private equity and credit.

BAM is a newly formed entity as BAM.A (called Brookfield Asset Management as well) did a 4:1 split recently to form Brookfield Corporation and Brookfield Asset Management. Brookfield Corporation (BN) is the parent company while Brookfield Asset Management is one of the child companies.

• Sector: Financial Services
• Dividend Yield: 4.2%
• Dividend Payout Ratio: n/a
• PE Ratio: 14.27
• 5 Year Dividend Growth Rate: n/a
• Dividend Increase Streak: n/a

Please note, since BAM is a newly formed entity, some of the financial parameters are not yet available.

The new Brookfield Asset Management plans to payout 90% of its profits and grow the dividend payout every year, making BAM very attractive for dividend investors. Another thing to note is that the quarterly dividend amount may change due to profit sharing payout nature.

I picked Brookfield Asset Management over Brookfield Corporation because of the higher dividend yield. BAM is more suitable for dividend investors looking for income. If you have a longer investing timeline, you may want to consider Brookfield Corporation (BN) for the long term higher potential capital growth.

7. TD Bank (TD.TO)

Toronto-Dominion Bank is a Canada-based bank, which operates in North America. TD is one of the largest banks in Canada and the 5th largest bank in North America. It is an online financial services firm, with over 14 million online and mobile customers. Its segments include Canadian Retail, U.S. Retail, Wholesale Banking and Corporate.

• Sector: Financial Services
• Dividend Yield: 4.47%
• Dividend Payout Ratio: 40.6%
• PE Ratio: 9.08
• 5 Year Dividend Growth Rate: 8.7%
• Dividend Increase Streak: 12 years

TD doesn’t just generate its income from the Canadian market. In fact, TD gets more than 30% of its net income from the US division which has 1,160 retail locations in the US. Overall, TD has a very large retail presence in North America with more than 2,200 retail locations across the continent.

Do you know people that switch banks regularly? Probably not too many. Because people don’t change banks regularly, TD should continue to benefit from its large client base. Many young adults are TD clients because their parents bank with TD. Once these young adults have kids, it’s very likely they will set their kids up with TD for financial service. Who doesn’t like a perpetual client base?

8. Fortis (FTS.TO)

Fortis is a Canada-based electric and gas utility holding company. The Company’s segments include Regulated Utilities and Non-Regulated Utilities. Fortis serves many different regions, including Arizona, BC, Alberta, New York, Newfoundland, Ontario, PEI, and the Caribbean.

• Sector: Utilities
• Dividend Yield: 4.24%
• Dividend Payout Ratio: 83.7%
• PE ratio: 20.47
• 5 Year Dividend Growth Rate: 6.1%
• Dividend Increase Streak: 49 years

Who doesn’t like the 49 years of dividend increase streak?

Fortis is one of the few Canadian dividend paying stocks that can be called the Canadian dividend aristocrats. With a dividend yield of over 4% and a solid dividend growth history, it’s nearly impossible not to create a dividend portfolio without Fortis in it.

With the streak of over four decades of dividend increases, in addition to the attractive yield, Fortis’ dividend payments can be considered bond-like. Since many Canadians must rely on natural gas or electricity to heat their home during winter, or use natural gas or electricity for cooking purposes, this makes Fortis a very stable stock to own. 

9. Canadian National Railway (CNR.TO)

Canadian National Railway Company has a network of approximately 20,000 route miles of track spans Canada and mid-America, connecting approximately three coasts, including the Atlantic, the Pacific and the Gulf of Mexico and serving the cities and ports of Vancouver, Prince Rupert (British Columbia), Montreal, Halifax, New Orleans, and Mobile (Alabama), and the metropolitan areas of Toronto, Edmonton, Winnipeg, Calgary, Chicago, Memphis, Detroit, Duluth (Minnesota)/Superior (Wisconsin), and Jackson (Mississippi), with connections to all points in North America.

• Sector: Industrials
• Dividend Yield: 1.8%
• Dividend Payout Ratio: 41.6%
• PE Ratio: 21.86
• 5 Year Dividend Growth Rate: 12.2%
• Dividend Increase Streak: 27 years

CNR is a very diversified company. No one particular product line accounted for more than 25% of the total revenues. And the company has one of the lowest operation ratios of all American railway companies that are publicly traded.

Canadian National Railway has a pretty low dividend yield, but the key here is its high dividend growth rate over the years. The company currently has a 20 year dividend growth rate of 16.3%. Needless to say, CNR shareholders get rewarded when holding the stock for the long term.

Although rail is not frequently used for passenger travels here in North America, rail is still one of the most cost-efficient ways for transporting goods. Canadian National Railway’s large rail network will allow the company to provide transportation services in North America and bring profits to shareholders.

As a dividend investor who cares about both dividend growth and capital appreciation, I really like how CNR has consistently outpaced the TSX Composite in the last 5 years.

10. Royal Bank (RY.TO)

Royal Bank is the largest bank in Canada. If we look at Royal Bank’s earnings, 45% came from personal & commercial banking, 24% came from capital markets, 19% came from wealth management, 7% came from insurance, and 5% came from investor & treasury services.

RY serves personal, business, public sector and institutional clients in Canada, the United States and approximately 40 other countries.

Despite being the largest bank in Canada, Royal Bank set out a plan in 2018 to attract new Canadian banking clients. So far they’re on track to meet this target.

• Sector: Financial Services
• Dividend Yield: 3.97%
• Dividend Payout Ratio: 47.7%
• PE Ratio: 12.02
• 5 Year Dividend Growth Rate: 7.3%
• Dividend Increase Streak: 12 years

Royal Bank has been paying dividends since 1870 and has never missed a dividend payment since. Let that sink in! The 150 year of dividend payment streak is pretty darn impressive if you ask me.

11. Granite REIT (GRT.UN)

Granite REIT is a Canadian-based real estate investment trust engaged in the acquisition, development, ownership management of logistics, warehouse and industrial properties in North America and Europe.

• Sector: Industrial REIT
• Dividend Yield: 4.50%
• Dividend Payout Ratio: 8.5% (for REITS, need to look at AFFO payout ratio)
• PE Ratio: 7.52
• 5 Year Dividend Growth Rate: 3.5%
• Dividend Increase Streak: 12 years

GRT.UN’s portfolio consists of 118 investment properties representing almost 51.3 million square feet of leasable area with an occupancy rate of 99.6%. These numbers are very impressive for REITs. I have come to really like Granite REIT for its global footprint with a focus on institutional-quality assets in key distribution and e-commerce markets.

• 5 Best Canadian REITs

As online shopping gets more popular, online retailers like Amazon and Wayfair need to have warehouses in major cities to store merchandise. GRT.UN should benefit from this shopping trend.

12. Telus (T.TO)

Telus is one of the big three Canadian telecommunication companies based in Vancouver BC. The Company provides a range of telecommunications services and products, including wireless and wireline voice and data. Telus has around 11 million subscribers and they have increased its dividend nearly every year since 2002.

• Sector: Communication Services
• Dividend Yield: 5.2%
• Dividend Payout Ratio: 96.8%
• PE Ratio: 18.61
• 5 Year Dividend Growth Rate: 6.6%
• Dividend Increase Streak: 19 years

Since the launch of smartphones and data plans, more and more Canadians are addicted to these smart devices. This addiction has helped Telus to continue making a massive amount of profit. Telus’ board is very shareholder friendly and has declared that they have a goal to continue increasing dividends by 7 to 10% in future years.

Unlike Rogers and BCE which also owns media businesses, Telus has been expanding into the healthcare sector. Telus Health has the potential to be spun off into a separate division, just like Telus International. Recently Telus announced it had come to an agreement to acquire LifeWorks, strengthening Telus Health’s position as a leading global digital health and wellness provider.

Therefore, I believe Telus will continue to reward its shareholders for many years.

13. Canadian Natural Resources (CNQ.TO)

Canadian Natural Resources is a natural gas and heavy crude oil producer that operates primarily in Western Canada.

• Sector: Energy
• Dividend Yield: 4.57%
• Payout Ratio: 33.2%
• PE Ratio: 7.25
• 5 Year Dividend Growth Rate: 23%
• Dividend Increase Streak: 22 years

Why did I pick CNQ over other Canadian energy producers like Suncor or Imperial Oil? It’s because CNQ has shown consistently that it can weather the storm. It managed to keep the same dividend payout throughout the pandemic. In fact, CNQ raised dividends amidst the pandemic. This is a very different approach than what Suncor did.

CNR has been firing on all cylinders lately and I expect this trend to continue in 2023.

13 Best Canadian Dividend Stocks – Final Thoughts

Here you have it, my picks for the best Canadian Dividend Stocks. I picked these stocks from different sectors to help build a diversified dividend portfolio. For the most part, investing in Canadian banks, Canadian utilities, and Canadian telecoms is a very easy and straight forward way of DIY investing and receiving juicy dividends.

Want to learn to construct your own dividend investing portfolio and start investing in dividend paying stocks? I went through several methods on how I shortlist and screen dividend paying stocks. You may also want to take a look at this Canadian Dividend Calendar to see when the Canadian dividend all stars pay out dividends.

• What are Canadian Depositary Receipts (CDRs) – Should you invest in CDRs?

Some of you might wonder if preferred shares have a place in your portfolio. This is a very personal question and totally depends on whether your aim is total return or dividend income. Personally, I think there are too many preferred shares available and it can be very confusing looking at preferred shares from the same company and understanding all the different jargon. Therefore, if you’re considering holding preferred shares in your portfolio, it might be a good idea to utilize one of the best preferred share ETFs in Canada and let the professionals manage it for you.

If you’re reading this post, you are probably managing your own portfolio and may not want to use an ETF and pay the management fee, is there a way to do that? Fortunately, some smart folks created Passiv to do that for you automatically. With Passiv, the tool can put your portfolio on autopilot. You can build your own personalized index, invest, and rebalance all through a click of a button. Passiv can even calculate and execute the trades needed to keep your portfolio balanced. Essentially, Passive makes investing super simple! A community user account is free to sign up for. The elite member account is $99 per year…but it’s free for Questrade clients! Make sure to check out Passiv.

In case you’re curious, for diversification outside of Canada, we hold a handful of US dividend paying stocks. In addition, we utilize one of the low cost ex-Canada ETFs like XAW to diversify our portfolio internationally.

Do you already own dividend stocks and want to create a spreadsheet to track your portfolio? Take a look at my Google Spreadsheet Dividend Portfolio Template.

The dividend-growth lovers over at Million Dollar Journey have their own list of Canada’s best dividend stocks, which focuses heavily on earnings-per-share, and forward earnings-per-share as their main dividend stock valuation metrics. This again, makes intuitive sense from a dividend-growth perspective, as companies that have a lot of free cash flow – plus a history of raising their dividends – should be ideally positioned to keep those dividends growing far into the future.

Is it better to purchase one of these top Canadian dividend stocks, or purchase lesser known Canadian dividend stocks with lower yield and higher dividend growth? This is a personal decision you need to make yourself. Personally, I believe a mix of both.

Note: This blog post represents my opinion and not an advice/recommendation to purchase these stocks. Before you buy any stocks, please consult with a qualified financial planner.