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Looking to boost your passive income in 2025? Three leading TSX-listed dividend stocks – Canadian Natural Resources (TSX:CNQ), Suncor Energy (TSX:SU), and Canadian Tire (TSX:CTC.A) – have announced dividend increases for the coming year, offering dividend investors attractive opportunities to enhance their investment income in 2025.
For income-oriented investors, careful cash flow planning is essential, particularly when timing dividend eligibility. Understanding ex-dividend dates and payout schedules becomes crucial for optimizing investment returns. Here’s a detailed look at these upcoming dividend increases and what they mean for investors.
Suncor raises dividends for 2025
Integrated oil giant Suncor Energy continues to rebuild its reputation among income investors after its pandemic-era dividend cut. On November 12, the company demonstrated its financial strength by announcing a 4.6% increase in its quarterly dividend to $0.57 per share, beginning with the December payout. The new dividend translates to an attractive yield of 4.1% for 2025.
The company’s dividend recovery since 2020 has been remarkable, with payouts increasing by 171% from pandemic levels. The current dividend now exceeds pre-pandemic levels by 22.6% and appears highly sustainable with a conservative 35% earnings payout rate.
Combined with aggressive share repurchases that removed 12.5% of outstanding shares from the market, Suncor’s dividend has helped boost total returns from 76% to 99% over the past three years.
The company’s operational performance has been equally impressive, with oil production and refinery productivity reaching record levels in the third quarter of 2024. Backed by strong oil prices and successful cost-cutting initiatives, Suncor has achieved a healthy 15% return on equity, highlighting the company’s strength across the entire crude oil value chain. This integrated business model provides stability and resilience through various market conditions.
Canadian Natural Resources extends impressive dividend growth streak
Following its strategic acquisition of Chevron’s Alberta assets in October, Canadian Natural Resources announced a 7% dividend increase for January 2025. Investors need to mark their calendars, as they must hold CNQ stock by December 13 this year to qualify for the enhanced payout, which offers a projected yield of 4.8%.
CNQ stock’s remarkable 25-year track record of consecutive dividend increases remains well-supported by robust earnings and substantial free cash flow. The company’s competitive advantage lies in its low-cost, low-decline assets, which could generate distributable cash flows for more than three decades at current production levels.
Canadian Natural Resources’ operational strength, combined with management’s commitment to shareholder-friendly policies, has delivered impressive long-term returns – with dividends transforming a 149% capital gain into a substantial 285% total return over the past decade.
Growing dividends will remain a significant source of investor returns for Canadian Natural Resources stock in 2025 and beyond, more so if oil prices continue to comply.
Canadian Tire maintains dividend growth despite economic headwinds
In a demonstration of financial resilience, consumer cyclical stock Canadian Tire recently announced its 15th consecutive annual dividend increase, despite operating in a challenging economic environment. The specialty retailer raised its quarterly dividend by 1.4% to $1.775 per share for the first quarter of 2025, payable March 1, 2025, to shareholders of record by January 31, 2025.
At current share prices around $154, the dividend yields an attractive 4.6%. The payout appears sustainable, supported by a reasonable 60% earnings payout rate and growing free cash flow generation. The company has successfully navigated consumer market challenges through enhanced membership offerings and value propositions, maintaining strong customer relationships despite economic pressures.
Canadian Tire’s ability to generate positive earnings and growing free cash flow throughout 2024, despite an increasingly cautious consumer environment, underscores the company’s operational resilience. Management maintains a cautiously optimistic outlook as expectations of lower Canadian interest rates in the coming year could help alleviate consumer pressure and support retail spending.
Investor takeaway
For income-focused investors, Canadian Tire stock, Suncor stock, and Canadian Natural Resources stock’s recent dividend raises present compelling opportunities to enhance portfolio yields while maintaining exposure to well-established Canadian businesses with proven track records of shareholder returns. The combination of growing dividends and strong underlying business fundamentals makes these stocks worthy your consideration for income-oriented portfolios heading into 2025.
