The TSX Composite benchmark has jumped by 23.3% in the last year as investors expect economic growth and corporate earnings to benefit from declining interest rates. While these optimistic expectations are pushing the market higher, persistent inflationary pressures and escalating geopolitical tensions are keeping investors on their toes, which could keep the market volatile in the near term. In such uncertain market conditions, dividend stocks could offer an effective way to generate steady income while providing some downside protection.
In this article, I’ll highlight two top Canadian dividend stocks you could consider doubling up on right now without worrying too much about short-term market fluctuations.
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CI Financial stock
CI Financial (TSX: CIX) has been an outstanding performer in the third quarter in the wealth and asset management space. After rallying by around 28% in the September quarter, CIX stock currently trades at $18.41 per share with a market cap of $2.7 billion. The company distributes its dividend payouts every quarter and offers a 4.3% annualized dividend yield at the current market price.
In the first half of 2024, CI Financial’s total revenue rose 15.4% YoY (year over year) to $1.6 billion. Despite facing challenges due to retail asset management outflows and higher expenses, the company’s earnings in the first six months of the year jumped by 17.3% YoY to $1.76 per share. At the end of the June quarter, CI Financial had total assets of $489 billion, reflecting roughly a 20% increase from a year ago. In fact, its total assets surpassed the $500 billion mark for the first time in July 2024, clearly reflecting the firm’s expanding footprint.
In addition to its record asset growth, CI Financial’s efficient capital management and continued expansion in U.S. wealth management through strategic acquisitions strengthen its long-term financial growth outlook, making this dividend-paying stock attractive to buy now.
Cogeco Communications stock
Cogeco Communications (TSX: CCA) is another top Canadian dividend stock that could be worth doubling up on right now. Shares of this Montréal-based telecommunications company have surged by over 38% so far in the third quarter to currently trade at $71.34 per share with a market cap of $3.3 billion. At this market price, CCA stock has an attractive 4.8% annualized dividend yield.
Cogeco’s key strengths include its consistent revenue growth and focused approach to operational efficiency. In the May 2024 quarter, the telecom firm reported revenue growth of 1.2% YoY to $750.6 million. Its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the quarter also climbed by 4.1% YoY to $ 365.8 million. Similarly, its adjusted quarterly EBITDA margin expanded to 48.7% in the last quarter from 47.4% a year ago.
Although restructuring costs affected its net profit in the latest quarter, Cogeco plans to roll out new services in the U.S. and its expanding Internet subscriber base in Canada, providing the company with a solid foundation for future revenue growth. Given these positive factors, I wouldn’t be surprised if this TSX dividend stock continues to outperform the broader market by a wide margin in the years to come.
