For Canadian income investors, the dream of growing passive income doesn’t have to remain a dream. By investing in top-tier dividend stocks, Canadians can create a steady stream of income that grows year after year. Among these dividend knights, several companies are not only raising their payouts but also trading at attractive valuations. Here are three dividend all-stars worth considering for long-term income generation.
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Restaurant Brands International
Restaurant Brands International (TSX: QSR) is the parent company of Tim Hortons, Burger King, and Popeyes. It is a solid pick for those seeking a reliable income stream. With its robust franchising model, Restaurant Brands enjoys stable cash flows from royalty payments, which reduce operational risks and ensure consistent earnings. The company has demonstrated a track record of delivering dependable dividends, making it a stable pick for income.
Last month, Restaurant Brands announced a solid 6.9% dividend increase, which is a clear signal of its financial health and commitment to rewarding shareholders. At a recent stock price of around $97 per share, the company offers a dividend yield of about 3.7%. Analysts believe the dividend stock is undervalued by approximately 12%, presenting a decent opportunity for long-term investors looking to lock in solid, growing dividends.
Manulife Financial
Manulife (TSX: MFC) is one of Canada’s largest insurance and wealth management firms. It has been on a growth trajectory since late 2023, and it’s showing no signs of slowing down. Despite strong recent performance, analysts estimate the stock trades at a 13% discount, making it a potential bargain at under $43 per share.
Manulife’s diversified business model, which spans life insurance, pensions, and investment management, provides stable cash flow. This diversification ensures that the company can maintain its consistent dividend payments even in fluctuating market conditions. Last month, the company raised its dividend by 10%, further cementing its appeal as a reliable dividend payer. With a dividend yield of around 4.1%, Manulife presents a good option for income investors seeking stability and growth potential.
Manulife’s global presence, particularly its expansion into Asian markets, adds further appeal. This growth opportunity positions the company for long-term success, making it a strong choice for investors focused on sustainable income generation.
goeasy
For those with a higher risk tolerance, goeasy (TSX: GSY) could be a compelling income investment. Its stock price recently dipped to below $148 per share, and analysts estimate that it’s currently trading at a 38% discount, indicating strong potential upside. However, the high discount also suggests the stock has higher uncertainty, so it may be better suited for investors willing to embrace higher risk.
As a leader in non-prime lending in Canada, goeasy has a resilient business model, with consistent cash flows derived from personal loans and leasing operations. The company’s track record of regularly raising dividends adds to its appeal. Just last month, goeasy increased its dividend by nearly 25%, pushing its yield to almost 4%. With its focus on expanding its customer base and navigating economic uncertainty, goeasy presents a growth-oriented option for income investors who can tolerate more risk in exchange for potentially higher returns.
The Foolish investor takeaway
These three Canadian dividend all-stars — Restaurant Brands International, Manulife, and goeasy — are all raising their payouts and trading at good valuations. Whether you’re looking for a reliable, long-term dividend income or are open to taking on more risk for higher potential rewards, these companies are solid considerations for building a diversified income portfolio.
