Beyond the Big Banks: Lesser-Known Canadian Stocks Offering Attractive Yields

Canadian bank stocks are a great portfolio holder, but there are other stocks investors should also consider if looking for strong dividend income.

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Canadian bank stocks are some of the best buys that Canadians can get for dividends. These banks have a long history of payouts, as well as making it through some of the toughest economic times.

Canadian banks have gone through depression, recessions, and now a pandemic and come out the other side. The oligopoly can sometimes mean higher prices for clients, but it also means more safety when storing their cash in these banks.

That security also comes with the ability to raise dividends again and again. However, that can leave some investors overlooking other areas offering attractive yields. Which is why if you have enough invested in Canadian bank stocks, these are others to consider.

Nexus Industrial

A great option for those seeking high dividend yields and secure income is Nexus Industrial REIT (TSX:NXR.UN). Nexus real estate investment trust (REIT) invests in industrial properties, as the name suggests. Yet the company has seen shares drop dramatically in this time of higher interest rates.

The thing is, we need industrial properties. These are the properties that support our ecommerce and purchasing habits. They ship, store, and assemble all the products we want. And more of these properties remain in high demand.

So with a dividend yield at 8.67%, Nexus stock is a great option over Canadian bank stocks. In fact, with shares down 25% and trading at 4.3 times earnings, it’s one I would certainly consider picking up on the TSX today.

Brookfield Renewable

Another great option for future funds is Brookfield Renewable Partners LP (TSX:BEP.UN). BEP stock offers growth in several ways. The company has a solid future thanks to its investment in diversified renewable energy assets. While the company has been purchasing these assets, it’s also forming partnerships.

Of course, there has been growing interest in this market, and BEP stock should be a huge part of it. Yet, shares are down after some less-than-stellar earnings. However, much of this came down to higher interest rates, higher costs, and foreign currency exchange losses.

So if you’re looking for some cash to come back your way, BEP stock could be a strong option. Especially as it offers a dividend yield trading at 5.41%, with shares still down 11% in the last year.


Finally, Transcontinental (TSX:TCL.A) is another strong option if you’re over Canadian bank stocks. The company recently surged past earnings estimates, leading to a share climb after its most recent earnings report. The packaging company should continue to see more sales and usage increase as well, especially during the holiday season.

Yet even after a climb of 4%, the company still remains undervalued trading at 9.7 times earnings. The question is, after five years of seeing shares sink lower and lower, is the stock finally starting to turn around?

In my opinion, it looks to be the case. Which is why now is a great time to consider its dividend yield of 7.99% as of writing. Currently, shares are up 5% in the last month, but still down 27% year to date, offering a massive deal for today’s investor – one perhaps the Canadian bank stocks cannot keep up with.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in Brookfield Renewable Partners. The Motley Fool recommends Brookfield Renewable Partners, Nexus Industrial REIT, and Transcontinental. The Motley Fool has a disclosure policy.

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