10 Best Canadian Dividend Stocks: New Additions For December 2021

10 Best Canadian Dividend Stocks: New Additions For December 2021

The best Canadian dividend stocks are always changing from an entry point perspective. We know that the stock market will grow over time, but on any day, stock prices will fluctuate and provide opportunities to invest.

The opportunities will vary every month and that’s why it’s important to have a systematic approach to understanding which dividend stocks are an opportunity at a point in time.

An opportunity can be for a stock you already own or simply for a new addition to your portfolio.

Top 10 Canadian Dividend Stocks

Here are the top 10 Canadian dividend stocks for this month, see below for the details. This is obviously a snapshot in time at the time of writing, many factors could change the rankings.

One key quality of the selected dividend stocks is the blend of dividend yield and dividend growth. It’s important as high yield dividend stocks can be dangerous.

Here is a quick excerpt on the top 10 dividend growth stocks opportunities identified through the Canadian Dividend Stock Screener.

The monthly top 10 rarely have the same top 10 stocks. Be sure to come back, or better yet, follow the top 10 with the Canadian Dividend Screener.

1. Algonquin Power & Utilities Corp

Algonquin Power & Utilities is a diversified utility company in North America with $10 billion in total assets. The company engages in the generation, transmission, and distribution of water, gas, and electricity to communities across the U.S. 

As a growing renewable energy company, Algonquin Power owns a strong portfolio of long term contracted wind, solar and hydroelectric assets with 1.5 GW of total installed capacity.

The company has more than 50 power generation facilities and 20 utilities across North America. Algonquin’s utility business serves nearly 770,000 customers in twelve states across the U.S., through 1,200 miles of electrical transmission lines and 100 miles of natural gas transmission pipelines.

Key Investment Data

2. Manulife

Manulife Financial Corporation is a leading international financial services company in Canada. The company provides financial advice, insurance, as well as wealth and asset management solutions for individuals, groups, and institutions.

Manulife offers unique product offerings for different markets it serves. The company provides a suite of financial protection and wealth management solutions to meet the current and future needs of individual and group customers. The company also owns reputed brands like Manulife and John Hancock in the USA.

Manulife serves 26 million customers in the USA, Canada, and Asia. With more than 125 years of experience, the company has developed strong customer relations and a deep understanding of their financial needs. Clients look to Manulife for reliable and intelligent financial solutions.

Key Investment Data

3. Alimentation Couche-Tard

Alimentation Couche-Tard is one of the largest Canadian companies and the owner of several Canadian convenience stores. The company also supplies road transportation fuel to approximately 1,300 locations in the U.S. and offers stationary energy and aviation fuel.

As a leading independent convenience store operator, Couche-Tard owns a network of nearly 10,000 convenience stores in 48 states in the U.S., ten provinces in Canada, as well as other countries.

It operates more than 16,000 stores worldwide. By geography, the US is its largest market accounting for 67% of 2018 revenues, followed by Europe (20%) and Canada (13%). The company operates through Couche-Tard and Mac’s brands in Canada and Circle K globally.

Key Investment Data

4. Canadian Tire

Canadian Tire Corporation is a leading retail company in Canada having a presence in the retail, finance and real estate businesses.

The company’s retail and financial services businesses include Canadian Tire, PartSource, Petroleum, SportChek, Mark’s, Helly Hansen, CT REIT, and a Financial Services division. Retail is the larger segment accounting for more than 90% of total revenues, while financial services segment constitutes the remainder. The financial services segment offers credit cards and other financial products.

Canadian Tire is one of Canada’s most shopped general merchandise retailers. The company operates through a huge network of 1700 retail outlets and gas bars. It provides a wide range of products in the automotive, tools & hardware, home & essentials, sports and outdoor living categories.

Canadian Tire also has a 76% interest in CT REIT, a closed end real estate investment trust in Canada, of which it is the primary tenant. Customers trust the Canadian Tire brand for its product quality and leading reputation.

Key Investment Data

5. Canadian Natural Resources

Canadian Natural Resources is a diversified and independent energy producer in the world. It is the largest independent natural gas and heavy crude oil producer in Canada.  It operates a balanced mix of natural gas, light crude oil, heavy crude oil, and oil sands. The company holds some of the best oil sand assets in North America, particularly thermal in situ properties, having tremendous growth potential.

The company’s business can be broadly classified into Exploration and Production (North America, North Sea, offshore Africa), Oil Sands Mining and Upgrading, and Midstream and Refining segments. The Exploration and Production segment is Canadian Natural’s core business, while the other two businesses provide a nice diversification.

Canadian Natural has a balanced mix of natural gas, light crude oil, heavy crude oil, bitumen, and SCO. The company also owns midstream assets consisting of two crude oil pipeline systems and cogeneration plants, which enables the transportation of heavy crude oil in international markets.

Key Investment Data

6. Kirkland Lake Gold

Kirkland Lake Gold Ltd. is a senior gold producer operating in Canada and Australia. Its production profile is anchored by three high-quality operations including, the Macassa Mine and Detour Lake Mine, both located in Northern Ontario, Canada and the Fosterville Mine located in the State of Victoria, Australia.

A key driver of it success continues to be its commitment to exploration, where the company has a solid track record for growing reserves and identifying new areas of high-grade gold mineralization. In support of shareholder returns, it has paid a quarterly dividend since July 2017 and have continually increased the dividend since then. 

Underlying everything is a commitment to sustainable production. Sustainability involves achieving high levels of performance in safety, environmental management and community consultation and support. The company works diligently with all stakeholders to ensure that Kirkland Lake Gold remains a welcome member of the communities in which it operates.

Key Investment Data

7. Industrial Alliance

Industrial Alliance is a leading insurance and wealth management company in Canada. The company manages more than $180 billion in assets and over 4 million client accounts.

It also distributes creditor insurance products, car loan financing, and property & casualty products through a Canada wide distribution network. Industrial Alliance operates through individual insurance (15% of 2018 revenues), individual wealth management (40%), group insurance (18%), group savings and retirement (18%), U.S. operations (5%) and other (4%) divisions.

The company deploys an extensive distribution network, With more than a century old existence, Industrial Alliance has developed the necessary expertise and portfolio of products and solutions to cater to the diverse financial needs of its clients. The company is targeting to grow its EPS by at least 10% annually till 2022.

Key Investment Data

8. National Bank

With an experience of more than 150 years, National Bank is one of the six largest commercial banks in Canada. The bank enjoys leading market share in Quebec which accounts for 58% of its total revenues.

The bank also has a presence in international markets like the US, Europe and other countries. National Bank’s operating units include personal and commercial banking accounting for more than 40% of its income, followed by financial markets (29%), wealth management (20%), and US specialty finance and international (9%).

National Bank offers a wide spectrum of banking and financial products and services, including corporate and investment banking, securities brokerage, insurance, wealth and retirement management. National Bank’s personal and commercial banking segment has a strong presence in central Canada.

Key Investment Data

9. Great West Life

Great-West Lifeco is a financial services company providing life and health insurance, retirement and investment services, asset management and reinsurance businesses.

In addition to providing traditional insurance products, the company also provides certain products on a fee-for-service basis such as segregated funds and mutual funds. Great-West Lifeco is a member of the Power Financial Corporation group of companies. It has over $1.3 trillion in total assets under administration as of December 2017.

Great-West Lifeco operates through Great-West Life, London Life, Canada Life, Irish Life, Great-West Financial and Putnam Investments in Canada, the United States and Europe. In the U.S., Great-West Financial is a leading provider of employer-sponsored retirement savings plans in the public and corporate sectors.

Key Investment Data

10. Stella-Jones

Stella-Jones is a North America’s premier provider of pressure treated wood products. The company enjoys a strong reputation for providing reliable high quality wood products in the North American market. Stella-Jones operates through two business segments, the production and sale of pressure treated wood, and logs and lumber.

The company’s product mix consists of railway ties (30%), residential lumber (25%), utility poles (32%), logs and lumber (8%), and industrial products (5%). The company owns 37 wood treating facilities spread across sixteen U.S. states and five Canadian provinces, and a huge distribution network across North America.

By geography, the US is Stella-Jones’ largest market accounting for nearly 70% of its total sales, while Canada constitutes the remaining 30%. The company also has a small presence in Latin and South American markets.

Key Investment Data

Ranking Methodology

The top 10 stocks identified above are based on a score calculated using a number of financial data points from the companies. In the end, the score is generated from following five key indicators:

• 52-Week Range: Trend over the past 52 weeks. Is the stock pulling back from a 52 week high?
• P/E Ratio: Is the stock price running away from its earnings?
• Revenue Growth: Is the revenue growing? Growing revenue is important. We don’t want to be fooled by share buybacks and cost management only.
• Dividend Yield: Is the yield attractive? Usually could identify a pullback if the yield starts to go up or major trouble if it goes too high.
• Dividend Growth: Uses dividend growth and the Chowder Rule. Is the company capable of growing the dividend consistently?
• Dividend Payout Ratio: Uses historical averages to put today’s ratio in perspective. Is the company able to grow the dividend at the same rate it increases its earnings?

The generated score is meant to assess an entry point opportunity based on historical and today’s numbers. It completely ignores the business quality, the quality of the company is for every investor to assess. My stock selection process breaks down the quantitative and qualitative assessments investors should establish to pull the trigger before buying.

If you are interested in more details, the Canadian Dividend Screener provides many more data points to help make your investment decision.

Dividend growth investing works and you can generate a healthy retirement income but you have to buy individual stocks. If you are not comfortable with holding individual stocks, you can always buy dividend ETFs.

Published at Fri, 03 Dec 2021 08:49:00 -0800