While high interest rates were strong headwinds for stocks in 2023, Canadian dividend stocks did well. Some market analysts believe more investors will lean towards dividend-paying companies this year with the Bank of Canada’s impending rate cuts.
If you’re investing for passive income, five TSX dividend stocks are the top buys in March 2024.
Largest company
Royal Bank of Canada (TSX:RY), Canada’s largest company by market capitalization, is a no-brainer buy. The $189.9 billion bank will likely sit on the throne for a long time. At $134.34 per share (+1.3% year to date), you partake in the 4.11% dividend yield and gain peace of mind.
Dividend safety and power are never doubted, as RBC has paid dividends since 1870. Despite the 52.82% year-over-year increase in provision for credit losses in the first quarter (Q1) fiscal 2024 versus the Q1 fiscal 2023, net income rose 14% to $3.6 billion compared to the same period last year. At the quarter’s end, RBC announced a 3% dividend hike.
$100 billion club
Only two TSX energy stocks are in the $100 billion club, and Canadian Natural Resources (TSX:CNQ) is number one with $106.4 billion. At $99.36 per share, current investors enjoy a market-beating year-to-date gain of 15.68% on top of the 3.87% dividend yield.
This oil and gas exploration and production company is a Dividend Aristocrat, owing to 24 consecutive years of dividend increases. In Q4 2023, net earnings climbed 72.8% to $2.62 billion versus Q4 2022. Because of multiple production records and robust free cash flow (FCF), the board approved a 5% increase in the quarterly dividend.
Its chief financial officer, Mark Stainthorpe, said the company achieved its $10 billion net debt level target in Q4 2023. He added that under the FCF allocation policy, CNQ will aim to return 100% to shareholders through dividends and share buybacks.
Cash cow
Telco giant BCE (TSX:BCE) is a cash cow. At $46.31 per share, the $42.25 billion communications company pays a hefty 8.62% dividend yield. On February 8, 2024, after reporting solid results in Q4 and throughout 2023, management announced a 3.1% increase in the annual common share dividend.
In Q4 2023, net earnings declined 23.3% to $435 million versus Q4 2022, although FCF jumped 242.8% year over year to $1.29 billion due to lower capital expenditures. BCE plans to reduce capital expenditures by over $1 billion over the next two years.
Dividend and growth stock
I will include Brookfield Infrastructure Partners (TSX:BIP.UN) in my buy list. The $18.2 billion company operates vital businesses globally, including data, midstream, transport, and utilities. Besides the 5.58% dividend yield, market analysts see a 32% upside potential, from $39.44 per share to $52.07 in one year.
Enduring business
Rogers Sugar (TSX:RSI) is fifth on my list because of its enduring business. The $679.2 million company provides sugar and maple products in Canada, the U.S., Europe, and other international markets. At only $5.31 per share, the dividend offer is 6.78%. An expansion project is underway, and production capacity will increase by 20% soon.
Solid investment portfolio
The five dividend stocks can form a formidable portfolio. All of them will deliver consistent passive-income streams for years.
