Income-focused investors rejoice whenever their stock holdings announce dividend hikes. In addition to higher payouts, it signals positive growth prospects for the company. Three top-tier Canadian stocks, all reliable passive income providers, bumped their dividends in Q4 2024. If you don’t own the stocks yet, consider buying them in 2025.
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Energy
Canadian Natural Resources (TSX: CNQ) marked 25 consecutive years of dividend increases when it announced a 7% hike on October 7, 2024. At $47.01 per share, the dividend yield is 4.7%. The Board of Directors approved the increase because of the strong financial position and significant, sustainable free cash flow (FCF) generation in Q3 and the first three quarters of 2024.
The $69.3 billion senior crude oil and natural gas producer owns top-tier, long-life, low-decline assets. In the nine months ending September 30, 2024, net earnings declined 11% year-over-year to $5 billion, while cash flow from operating activities climbed 32% to $10 billion from a year ago.
Its CFO, Mark Stainthorpe, said that as of October 31, 2024, the energy major had distributed approximately $6.7 billion to shareholders through share repurchases and growing dividends. Under the adjusted FCF allocation policy, Canadian Natural Resources will allocate 60% and 40% of FCF to shareholder returns and the balance sheet, respectively, until net debt reaches $15 billion.
Communications services
TELUS (TSX: T) slumped for most of 2024 but remains a dividend contender. At $20.08 per share, the trailing one-year price return is -11.8%. However, the dividend offer is a hefty 8% if you invest today. Still, the 5G stock announced a 3.4% dividend increase on November 7, 2024.
The $29.9 billion telecommunications company, Canada’s second-largest, has a dividend policy and dividend growth program. In May 2022, management revealed its intention to target semi-annual dividend increases from 2023 through 2025. While there is no assurance, the Board will assess and determine the viability every quarter.
In Q3 2024, net income increased 87.6% to $257 million compared to Q3 2023. Darren Entwistle, President and CEO of TELUS, said, “Our results demonstrate our ability to deliver sustainable, profitable growth, anchored by our strategic emphasis on margin-accretive customer expansion and globally leading broadband networks.”
He added that industry-leading customer growth (347,000 total) and strong demand led to robust financial results.
Financial services
The Big Five Banks in Canada have dividend track records of more than 100 years. On December 5, 2024, the Canadian Imperial Bank of Commerce (TSX: CM) increased its dividends by 8% from Q3 fiscal 2024. If you invest today ($87.44 per share), you can partake in the 3.2% dividend.
You should have peace of mind investing in Canada’s fifth-largest bank. In Q4 fiscal 2024 (12 months ending October 31, 2024), net income jumped 44% year-over-year to $7.2 billion. “Our bank delivered record financial performance in 2024,” said Victor Dodig, CIBC President and CEO of CIBC. He expects the bank to maintain its robust capital position and strong credit quality in fiscal 2025.
Established dividend payers
Canadian Natural Resources, TELUS, and CIBC are established dividend payers. Their respective businesses will keep investors whole on the dividend payments, including yearly dividend increases.
