There are a number of top Canadian dividend stocks that investors are broadly correct in looking to add to their portfolios right now. Indeed, the Canadian stock market has flown under the radar to a large degree, at least from the perspective of a global investor. As such, many top Canadian dividend stocks may have valuation multiples that are lower than the global benchmarks, with higher-than-average yields.
The following three stocks I’m going to discuss in this piece are ones I think fit such a narrative. So, for investors looking for yields that can provide meaningful income from stocks that have the potential to continue to move higher over the long term, these are the companies I think are worth a closer look.
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Enbridge
Pipeline giant Enbridge (TSX: ENB) has been one of my top dividend stock picks in Canada for a long time.
There’s good reason for this. The company’s impressive 6.1% dividend yield continues to put Enbridge on the radar screens of most yield-seekers. And it’s hard to argue that there are better, or more stable, dividend-generating stocks in the market at this company’s size (a market capitalization of more than $130 billion at the time of writing).
Of course, Enbridge is a company that does carry a substantial amount of debt, tied to its capital-intensive business model. But with hopes rising that new pipelines could be approved in Canada for the first time in a long time, this is a stock I think could have some big upside from here.
If anything, I’d expect Enbridge’s yield to come down from here. This is therefore a stock I think is worth buying at these levels right now.
Sun Life Financial
Moving into the world of insurance giants, Sun Life Financial (TSX: SLF) is among the top players in Canada I think is worth looking at.
That’s partly because the company isn’t purely a play on the Canadian insurance market. Rather, Sun Life has grown its global business, with many analysts thinking the company’s international revenue and earnings could far surpass its existing domestic business in a few years’ time.
And with rock-solid fundamentals (including a payout ratio of around 60%), I’d wager a bet that the company’s current dividend yield around 3.9% is safe.
This is a company which provides exposure to long-term trends, and one I think should continue to provide robust total returns over the long term, as its chart above shows.
Bank of Nova Scotia
Last, but certainly not least, we have Bank of Nova Scotia (TSX: BNS).
Scotiabank is one of Canada’s five largest banks, enjoying a piece of what’s become a very profitable oligopoly for the main players in the Canadian market.
Like many of its peers, Scotiabank has continued to build up its global presence, investing in a number of operations in Latin America. These markets, most of which grow much faster than the more mature Canadian and U.S. markets, can provide added upside during bull markets.
And for investors worried about the next downturn, Canada’s very stable banking industry can provide some ballast. Thus, there’s good reason to believe that this company’s current 5.8% dividend yield is worth locking in right now.
