Income Investors: These Canadian Dividend Aristocrats Are Raising Payouts Again

Canadian Dividend Aristocrats are a good place to start investigating potential dividend stocks to buy.

Kay Ng

Author Bio Kay graduated from the University of British Columbia with a Bachelor of Science in Computer Science and furthered her studies in financial markets, finance, and financial accounting. She began investing in dividend stocks in 2008, turning an early interest into a lasting passion. Over the years, Kay has refined her investment approach to focus on high-quality businesses, using fundamental analysis and valuation to identify long-term investment opportunities. Her investment research and articles have been featured in The Motley Fool, Sure Dividend, and Seeking Alpha. Outside of investing, Kay enjoys playing the piano, from popular songs learned by ear to challenging classical compositions. Her favourites include Fantaisie-Impromptu by Frédéric Chopin and La Campanella by Franz Liszt. Education Bachelor of Science (BSc) in Computer Science, University of British Columbia Further studies in financial markets, finance, and financial accounting Areas of Expertise Dividend stocks, fundamental analysis, company valuation, quality investing, long-term investing, business fundamentals, and identifying investment opportunities in high-quality companies. Social Media Profiles LinkedIn Favorite Investment Quotes “The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.” — Benjamin Graham “A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.” — Warren Buffett

Published January 8, 2025 8:15 pm EST

The Canadian Dividend Aristocrat list is a good place to start looking for relatively safe long-term investments. The improved safety comes from their having a track record of raising their payouts, which can be a form of regular, steady returns for investors. However, I emphasize again that it’s a good place to start looking because, historically, there have been cases in which dividends were cut from stocks on this list.

So, it is a friendly reminder that investors should always dig deeper into a business to determine whether they should risk investing their hard-earned money.

Here are some of the Canadian Dividend Aristocrats that recently raised their payouts, again. Perhaps, they are a good starting place for investigation.

Canadian dollars in a magnifying glass — Source: Getty Images

Canadian bank stocks

Not surprisingly – and probably one of the favourite places for investors to seek income – a bunch of Canadian bank stocks just raised their payouts in December, as follows:

Royal Bank of Canada hiked its dividend by 4.2%, but its last-12-month (LTM) year-over-year (YOY) increase was 5.6%
Toronto-Dominion Bank (TSX: TD) by 2.9% (LTM YOY increase: 5.4%)
Canadian Imperial Bank of Commerce by 7.8% (LTM YOY increase: 5.2%)
National Bank of Canada (TSX: NA) by 3.6% (LTM YOY increase: 8.1%)
Canadian Western Bank (TSX: CWB) by 2.9% (LTM YOY increase: 6.1%)

This comparison shows that National Bank’s recent dividend growth greatly outperformed the others, followed by Canadian Western Bank. Notably, National Bank is in the process of acquiring Canadian Western Bank with the transaction expected to close in early February. This should make the combined entity stronger and provide synergies.

Out of the group, TD stock seems to offer the best value. As compared to its long-term normal valuation, it trades at a discount of about 12%. The stock has been pressured from lower expected growth in the United States in the near term. Therefore, it also offers a higher dividend yield of almost 5.4%. Long term, income and value investors alike should take a closer look at the stock.

Granite REIT

Other than TD stock, industrial real estate investment trust (REIT), Granite REIT (TSX: GRT.UN) also appears to trade at a discount. Its focus on institutional quality assets in key distribution and e-commerce markets should allow it to continue generating stable and growing rental income.

Recently, its portfolio consisted of 138 income-producing properties with a committed occupancy rate of 94.7%. This portfolio has a weighted average lease term of just under six years, generating steady rental income with a staggered and geographically diversified lease maturity profile. Additionally, it has five development properties that can drive incremental growth.

Its top tenants include Magna International and Amazon, both bestowed A-grade credit ratings. As well, it has a strong financial position with a robust balance sheet that provides financial flexibility for the REIT to pursue fitting opportunities to expand its diversified portfolio.

Granite REIT is one of several Canadian REITs that have a track record of increasing its cash distribution. In fact, it has the longest cash distribution growth streak of about 14 consecutive years. The 10-year growth rate is 4.1%, while its last hike was 3% in December.

At $70.36 per unit at writing, the stock yields 4.8%. Importantly, analysts believe shares trade at an attractive discount of over 20%. Investors should explore if it’s a good fit for their diversified portfolios.