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.
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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.
