What are the Best Dividend Stocks in Canada?

Some — but not all — stocks pay dividends, which are payments made to shareholders. As an investor, you can take these payments in cash to use as income, or you can spend them on more stocks and bonds to grow your portfolio. If your investment strategy calls for dividend securities, you’re probably wanting to fill your portfolio with stocks that pay the highest dividends.

A word of warning about picking stocks

All investing comes with some risk, but picking stocks is especially risky. We don’t endorse any one stock because there’s no guarantee that any of these stocks will continue to pay dividends. In fact, there’s no guarantee that these companies won’t go out of business tomorrow. We simply can’t predict the future, no matter how steady a past has been. However, there is some evidence that dividend-paying stocks can offer more resiliency than other stocks, and many investors like receiving regular distributions.

As promised: the best dividend stocks in Canada

As talented as many folks may be, no one can tell you the best dividend stocks for you to buy. But what we can do is tell you the Canadian stocks that pay out the highest dividends (as of December 2021). Along with paying well, these stocks also have a history of dividend stability and a little growth. One piece of advice? Buy them through a commission-free trading platform so you don’t waste all of that money on fees.

1. Enbridge Inc. (ENB.TO)

• Dividend yield: 6.25%

• Market cap: $105 billion

• Industry: energy

Energy is a relatively stable industry, so it’s useful to include in your portfolio. Enbridge Inc. is the largest energy infrastructure company in North America, serving 3.7 million customers in Canada and the United States. It operates through five segments:

1. Liquids Pipelines operates oil, gas, and refined products pipelines and terminals.

2. Gas Transmission and Midstream owns natural gas utility operations that serve residential, commercial, and industrial customers in Ontario, Quebec, and New Brunswick.

3. Gas Distribution is involved in gas utility operations in Ontario, Quebec, and New Brunswick.

4. Green Power and Transmission operates renewable energy assets (wind, solar, geothermal, and waste heat recovery facilities) and transmission facilities in Alberta, Ontario, and Quebec and in several parts of the U.S.

5. Energy Services provides energy marketing services, transportation, storage, supply management, and product exchange services; crude oil, natural gas, NGL, and power marketing services; and physical commodity marketing and logistical services to refiners, producers, and others.

2. TransAlta Renewables Inc. (RNW.TO)

• Dividend yield: 5.99%

• Market cap: $4.1 billion

• Industry: renewable energy

TransAlta Renewables Inc. is a renewable energy company and subsidiary of TransAlta Corporation. It develops, owns, and operates renewable power generation facilities and assets, including 21 wind farms, 13 hydroelectric plants, seven natural gas plants, a solar facility, and natural gas pipelines in British Columbia, Alberta, Ontario, Quebec, New Brunswick, and a few U.S. states. It is one of the largest generators of wind power in Canada. Many of its facilities have a long history of positive performance.

3. Canadian Imperial Bank of Commerce (CM.TO)

• Dividend yield: 5.76%

• Market cap: $48 billion

• Industry: banking

The 150-year-old Canadian Imperial Bank of Commerce is a diversified financial institution that offers many financial products to the personal and business sectors. That includes chequing, savings, and business accounts; loans and lines of credit for homeowners, entrepreneurs, and students; and credit cards and investment services. They serve clients all over the world through four business units: Canadian Personal and Small Business Banking, Canadian Commercial Banking and Wealth Management, U.S. Commercial Banking and Wealth Management, and Capital Markets.

4. Keyera Corp. (KEY.TO)

• Dividend yield: 5.58%

• Market cap: $7.4 billion

• Industry: energy

Keyera Corp. transports, stores, and markets natural gas liquids and iso-octane in Canada and the U.S. It operates a network of 4,000-plus kilometers of pipelines and 17 natural gas processing plants located on the western side of the Western Canada Sedimentary Basin, provides natural gas gathering and processing services, markets natural gas liquids (such as propane, butane, condensate, sulphur, and iso-octane), and offers processing services through its network of underground caverns, fractionation facilities, rail and truck terminals, and pipelines. The company was formerly known as Keyera Facilities Income Fund.

5. Capital Power Corporation (CPX.TO)

• Dividend yield: 5.5%

• Market cap: $3.7 billion

• Industry: utilities

Capital Power Corporation develops, acquires, owns, and operates power generation facilities throughout Canada and the U.S. The electricity they sell comes from various sources, such as landfill gas, natural gas, waste heat, coal, wind, solar, and solid fuels. It owns an impressive 5,100 megawatts of power generation capacity.

6. BCE Inc. (BCE.TO)

• Dividend yield: 5.23%

• Market cap: $55 billion

• Industry: communication services

BCE Inc. is a vertically integrated telecommunications and media company that provides wireless and wired internet and TV services to residential, business, and wholesale customers in Canada. It operates in three segments:

1. Bell Wireless offers wireless data and voice communications. It also sells smartphones and tablets, mobile internet hubs, Wi-Fi devices, and smart devices.

2. Bell Wireline provides internet access, telephone services, and other communications products. It also sells home security, monitoring, satellite TV, connectivity services, and other wireline-related products.

3. Bell Media is the media arm that offers TV, streaming services, digital media, sports and event production, radio broadcasting, advertising, and broadcasting. It owns hundreds of media assets (TV and radio stations, streaming services, websites, etc.).

7. Power Financial Corporation (PWF.TO)

• Dividend yield: 5.14%

• Market cap: $23 billion

• Industry: insurance

Power Financial Corporation offers financial services throughout Canada, the U.S., Europe, and Asia. It sells a wide line of products, including life, disability, critical illness, and health insurance products; retirement accounts, wealth savings, and income products; employer-sponsored defined contribution plans, reinsurance products, and wealth management services; and, as they say in informercials, so much more. It sells its products through a distribution network of third-party financial advisors, consultants, and independent financial advisors.

8. Great-West Lifeco Inc. (GWO.TO)

• Dividend yield: 4.95%

• Market cap: $31 billion

• Industry: insurance

Great-West Lifeco Inc. is a financial services holding company that engages in life and health insurance, asset management, investment and retirement savings, and reinsurance businesses across Canada, the U.S., and Europe. They have a large portfolio of products for businesses, individuals, families, and organizations under various brand names, such as Great-West Life, London Life, Canada Life, the Freedom 55 Financial, the Irish Life, the Great-West Financial, the Empower Retirement, Putnam Investments, and PanAgora. It distributes products through a network of advisors, brokers, dealers, agencies, financial institutions, consultants, financial planners, employee benefit consultants, and banks.

9. Power Corporation of Canada (POW.TO)

• Dividend yield: 4.84%

• Market cap: $13 billion

• Industry: insurance

Power Corporation of Canada is a diversified international management and holding company with its feet in financial services, asset management, sustainable energy, and other sectors. Like the other insurance companies on this list, Power Corporation offers life, disability, and illness insurance; reinsurance products, retirement products, annuities, securities, and mortgage products; wealth management services; and other financial products.

Additionally, Power Corporation generates renewable energy through solar and wind facilities, manufactures LED lighting solutions and zero-emission vehicles, and operates equity investment funds. It also holds interests in a variety of other businesses.

10. Exco Technologies Limited (XTC.TO)

• Dividend yield: 4.5%

• Market cap: $329 million

• Industry: manufacturing

Exco Technologies Limited is a manufacturing firm that designs, develops, and builds dies, molds, components, and consumable equipment for the die-cast, extrusion, and automotive industries. It has 15 strategic manufacturing locations in seven countries that function through three business groups: Automotive Solutions, Extrusion Tooling Solutions, and Die Cast Solutions.

11. Emera Incorporated (EMA.TO)

• Dividend yield: 4.42%

• Market cap: $13 billion

• Industry: utilities

Emera Incorporated and its subsidiaries generate, transmit, and distribute electricity to its region of commercial, residential, and industrial customers. They’re also involved in marketing and trading energy products, as well as gas transmission and other energy services to Canada and the U.S. through a pipeline in New Brunswick.

12. National Bank of Canada (NA.TO)

• Dividend yield: 3.89%

• Market cap: $24 billion

• Industry: banking

National Bank of Canada provides financial services and products to commercial, corporate, retail, and institutional clients all over the world through its network of 495 branches and 1,480 banking machines. It operates through four segments:

1. Personal and Commercial offers personal banking services, mortgage loans, home equity credit, payment solutions, consumer credit, insurance, investment products, and commercial banking solutions.

2. Wealth Management offers a suite of products through internal and third-party distribution networks, such as trust services, banking services, investment solutions, loans, and wealth advisory services.

3. Financial Markets sells risk management services and products, equity underwriting, and advisory services.

4. U.S. Specialty Finance and International offers specialty finance expertise and some products, especially for activities in emerging markets.

13. Methanex Corporation (MX.TO)

• Dividend yield: 3.69%

• Market cap: $3.8 billion

• Industry: chemicals

Methanex Corporation is the largest producer and supplier of methanol in the world, thanks to its low-cost natural gas feedstock and long-term natural gas contracts. It operates through a network of six production facilities, 11 global offices, and 17 distribution terminals and facilities. It owns the largest collection of methanol equipment assets, including ocean tankers, barges, railways, trucks, and pipelines. It produces and supplies methanol in North America, the Asia Pacific, Europe, and South America, and also purchases and resells methanol produced by other companies

14. Canadian Natural Resources Limited (CNQ.TO)

• Dividend yield: 3.58%

• Market cap: $50 billion

• Industry: energy

Canadian Natural Resources Limited is a gas and oil exploration and production company. They find, develop, produce, and market crude oil, natural gas, and natural gas liquids. They offer synthetic crude oil light and medium crude oil, bitumen (thermal oil), primary heavy crude oil, and Pelican Lake heavy crude oil. They have a vast portfolio of assets spread across North America, the UK North Sea, and Offshore Africa. This company was formerly known as AEX Minerals Corporation, but changed its name to Canadian Natural Resources Limited in December 1975.

Before you go, a word of warning: research your stocks well

Buying stocks can be overwhelming, especially if you don’t know the market well. It’s important to take stock research seriously or you might end up jumping into bad deals. You’ll have to review company financial reports, study the company’s industry, and examine its leadership to decide if you think a particular company is a good buy. Or you could save yourself the hassle and use a robo-advisor like Wealthsimple to build a custom portfolio based on your financial goals.