• Login

    • 10 Top Canadian Dividend Aristocrats for September 2023 

    If you are in search of stable investments with consistent dividends, look no further than the list of Canadian Dividend Aristocrat stocks. These companies generate a steady cash flow, allowing them to increase their dividends each year. While these stocks may not offer substantial stock price growth, they provide a reliable income source for investors.

    In this article, we will discuss the top 10 Canadian dividend aristocrat stocks for September 2023.

    What Are Dividend Aristocrats?

    In Canada, the term “dividend aristocrat” has slightly different criteria compared to the United States. While in the US, a company must have raised its dividend for 25 consecutive years to be considered a dividend aristocrat, in Canada, the threshold is only five years.

    Here are the specific requirements to be a Canadian dividend aristocrat:

    • Be listed on the Toronto Stock Exchange.
    • Be a constituent of the S&P Global BMI.
    • The company must have increased dividends for at least five years, with the flexibility to maintain the same dividend for a maximum of two consecutive years.
    • The float-adjusted market capitalization must be greater than $300 million.
    While the Canadian criteria might seem less stringent than the US standards, it’s essential to remember that a five-year history of dividend growth may not guarantee future growth.

    Top Canadian Dividend Aristocrats

    1. Royal Bank of Canada (RY.TO)

    • Market Capitalization: $168.97 billion
    • 52-week trading range: $116.75 – $140.18
    • Dividend Yield: 4.46%
    • 1-Year Return: -3.24%
    • P/E Ratio: 11.95
    Royal Bank of Canada, or RBC, is a household name for Canadian investors. As the largest consumer bank in Canada and the 9th largest investment bank globally, RBC boasts nearly 1,200 branches and over 15 million Canadian customers. RBC has raised its dividend for 13 consecutive years and has not reduced its dividend payout for 32 years, making it a top Canadian dividend aristocrat stock.

    2. Toronto-Dominion Bank (TD.TO)

    • Market Capitalization: $146.87 billion
    • 52-week trading range: $76.32 – $94.05
    • Dividend Yield: 4.78%
    • 1-Year Return: -6.69%
    • P/E Ratio: 10.40
    Following closely is the Toronto-Dominion Bank, or TD, Canada’s second-largest consumer bank. TD has over 1,060 branches in Canada and over 14 million customers nationwide. With a generous dividend yield of 4.78% and a 5-year dividend CAGR of 9.0%, TD demonstrates resilience even during challenging times like the COVID-19 pandemic.

    3. Canadian Natural Resources (CNQ.TO)

    • Market Capitalization: $90.31 billion
    • 52-week trading range: $61.23 – $84.25
    • Dividend Yield: 4.35%
    • 1-Year Return: +9.83%
    • P/E Ratio: 12.20
    Canadian Natural Resources is one of Canada’s largest oil and gas companies, primarily operating in Western Canada and the prairies. With diversified energy assets worldwide, CNQ has raised its quarterly dividend for 23 consecutive years, boasting an impressive dividend CAGR of 21% over that period.

    4. Fortis Inc (FTS.TO)

    • Market Capitalization: $25.99 billion
    • 52-week trading range: $48.45 – $62.00
    • Dividend Yield: 4.23%
    • 1-Year Return: 4.23%
    • P/E Ratio: 18.07
    Fortis, a utility company headquartered in St. John’s, Newfoundland, operates across Canada, the US, the Caribbean, and Central America. Despite its smaller market capitalization, Fortis has an exceptional record of raising its quarterly dividend for 49 consecutive years, projecting continued annual dividend growth through 2027.

    5. BCE Inc (BCE.TO)

    • Market Capitalization: $51.38 billion
    • 52-week trading range: $54.62 – $65.66
    • Dividend Yield: 6.87%
    • 1-Year Return: -12.84%
    • P/E Ratio: 22.37
    BCE Inc., known as Bell Canada, is a major telecommunications company in Canada, serving over 10 million mobile customers, approximately 1 in 4 Canadians. Bell has raised its quarterly dividend for the past 14 years, with a CAGR of about 5.21% during that period.

    6. Enbridge Inc (ENB.TO)

    • Market Capitalization: $94.72 billion
    • 52-week trading range: $46.14 – $57.59
    • Dividend Yield: 7.58%
    • 1-Year Return: -18.04%
    • P/E Ratio: 25.05
    Enbridge, Canada’s largest oil pipeline company, transports the majority of Canadian crude oil exported to other nations. It operates over 38,000 kilometers of natural gas pipelines from Canada to the Gulf of Mexico. Enbridge has consistently raised its dividend for 28 consecutive years and has delivered an annual total shareholder return (TSR) of about 12% since 2002.

    7. Alimentation Couche-Tard Inc (ATD.TO)

    • Market Capitalization: $69.62 billion
    • 52-week trading range: $54.12 – $71.88
    • Dividend Yield: 0.79%
    • 1-Year Return: +25.42%
    • P/E Ratio: 17.22
    Alimentation Couche-Tard is a multinational convenience store operator with over 14,400 stores in 24 countries. Despite a lower dividend yield, ATD has shown remarkable dividend growth, with a CAGR of 26.6% since 2013. Additionally, it has outperformed other stocks on the list with a 1-year return of +25.42%.

    8. National Bank of Canada (NA.TO)

    • Market Capitalization: $33.17 billion
    • 52-week trading range: $82.16 – $104.83
    • Dividend Yield: 4.16%
    • 1-Year Return: +9.93%
    • P/E Ratio: 10.57
    The National Bank of Canada is often overlooked as the sixth-largest commercial bank in Canada. With branches across most Provinces and Territories, it serves over 2.5 million customers. National Bank has consistently raised its dividend for over a decade, with a 10-year dividend CAGR of about 9.4%.

    9. Canadian National Railway Company (CNR.TO)

    • Market Capitalization: $100.29 billion
    • 52-week trading range: $144.71 – $175.39
    • Dividend Yield: 2.07%
    • 1-Year Return: -4.25%
    • P/E Ratio: 19.60
    Canadian National Railway is the largest railway company in Canada, operating nationwide and in the United States. CNR has raised its dividend every year since its IPO in 1995 and maintains a dividend payout ratio below 40%. With substantial free cash flow reported in 2022, CNR is poised to continue raising its dividend.

    10. Canadian Apartment Properties Reit

    • Market Capitalization: $8.097 billion
    • 52-week trading range: $39.08 – $52.98
    • Dividend Yield: 3.03%
    • 1-Year Return: +5.71%
    • P/E Ratio: 55.06
    Canadian Apartment Properties REIT owns over 65,000 units in Canada and Europe, with an occupancy rate exceeding 95%. REITs are renowned for their dividend-paying capability, and CAR-UN has raised its distribution each year since 2011, even during periods of uncertainty in the Canadian residential real estate market.

    Pros of Investing in Dividend Aristocrats

    Investing in dividend aristocrat stocks offers several advantages:

    • Dividend Growth: Dividend aristocrats tend to increase their dividends over time, providing a growing income stream.
    • Stability: These companies are often mature and generate ample free cash flow, enhancing stability.
    • DRIP System: Dividend reinvestment plans (DRIPs) can be used to accumulate additional shares, facilitating steady portfolio growth.
    • Resilience: During market volatility, dividend aristocrats typically outperform growth stocks.

    Cons of Investing in Dividend Aristocrats

    However, there are also some drawbacks to consider:

    • Limited Stock Price Growth: Dividend aristocrats may not experience significant stock price appreciation over time.
    • Dividend Risk: Dividends can be reduced or eliminated, as seen during the COVID-19 pandemic. Relying solely on dividends for portfolio growth may not be prudent.
    • Short History: A five-year dividend growth history may not be sufficient to predict future dividend growth for Canadian stocks.

    How To Buy Canadian Dividend Aristocrat Stocks in 2023

    To invest in Canadian dividend aristocrat stocks in 2023, consider using discount brokerages like Questrade or Wealthsimple, which offer low-cost commissions, allowing you to maximize your returns on each trade.

    Should You Invest in Canadian Dividend Aristocrats?

    Whether or not to invest in Canadian dividend aristocrats depends on your risk tolerance, investment goals, and horizon. Younger investors focused on long-term capital appreciation might find better opportunities in high-growth stocks. In contrast, older investors seeking stability and income in retirement can rely on dividend aristocrat stocks to protect their capital.

    Canadian Dividend Aristocrats ETFs

    For those who prefer a diversified approach, consider investing in an exchange-traded fund (ETF) that tracks Canadian dividend aristocrat stocks. The iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (CDZ.TO) closely follows this index, holding 90 Canadian dividend aristocrat stocks and offering a monthly distribution yield of 4.04%. The management expense ratio (MER) for CDZ is 0.66%.

    Methodology

    When selecting Canadian dividend aristocrat stocks, it’s essential to consider their track record of dividend growth, total shareholder returns, and payout ratio. It’s advisable not to chase high dividend yields, as consistent dividend growth over time is more valuable.

    FAQs

    1. Who pays the best dividends in Canada?

    Canada’s oil pipeline companies like Enbridge, Pembina, and TC Energy stand out for their high dividend yields, backed by strong cash flow and a history of dividend growth.

    2. Who is the Canadian dividend king?

    Canadian Utilities (CU.TO) is the sole Canadian company classified as a Dividend King, having raised its dividend every year for 50 consecutive years. Fortis (FTS.TO) will join this elite category if it raises its dividend in 2024.

    3. Which Canadian stocks pay high monthly dividends?

    Many Canadian REIT stocks, including Canadian Apartments REIT (CAR-UN.TO), Allied Properties REIT (AP-UN.TO), and Granite REIT (GRT-UN.TO), pay high monthly dividends.

    4. What is the longest-reigning dividend aristocrat stock in Canada?

    Canadian Utilities (CU.TO) holds the record as the longest-reigning dividend aristocrat stock in Canada, having raised its dividend every year for 50 years as of 2023.

    Search
    Table of Contents

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    Follow Us
    Facebook-f Twitter Youtube Pinterest Instagram
    Quick Links
    Personal Finance
    © 2023 My Finances Guru. All Rights Reserved. Techytrion Softwares

    The content provided on Myfinancesguru.com is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.