The good news for dividend investors looking at the Canadian market is that there are plenty of top-tier dividend stocks to choose from in this key market. And while most investors may look to other markets around the world for their preferred dividend exposure (or other asset classes like bonds, for that matter), I think there are some unique opportunities in the Canadian market worth exploring.
In this article, I’m going to dive into three of my top picks in this space. For dividend investors seeking companies with solid balance sheets and dividend growth potential over the long term, here are three top Canadian names I’d recommend looking into right now.
Source: Getty Images
Fortis
Utilities giant Fortis (TSX: FTS) remains one of my top dividend picks for long-term investors in any market.
Of course, this is a much better-known company in Canada. But as far as the utilities sector as a whole is concerned, I’d put Fortis right up there next to some of the leading global players in this space, for a few reasons.
First, Fortis’s five-decade-long track record of hiking its dividend gives ample reason for investors to consider adding exposure to this name. Indeed, those seeking exposure to companies that pay dividends that can keep up with the rate of inflation (which has been increasing of late) ought to consider companies with such impressive growth rates.
Additionally, I think the key factor many dividend investors would do well to consider with the likes of Fortis and other large utility players is the underlying growth trends supporting these companies’ balance sheets. As demand for electricity and related utility services surges, and artificial intelligence demand continues to grow, investors stand to benefit not only from Fortis’s 3.6% dividend yield but also its capital appreciation-related upside over time.
Whitecap Resources
Another company I’ve recently been focused on as a leading dividend stock worth considering is Whitecap Resources (TSX: WCP).
Shares of the monthly dividend-paying stock have performed moderately well, with WCP stock up around 6% over the course of the past year. That said, this company’s 7% dividend yield (again, paid monthly) remains among the best in the Canadian energy sector. Supported by robust demand for energy and expectations that the overall oil and gas sector could continue to grow in the decades to come, this is a stock that has the kind of regulatory and political backdrop investors may want to consider, at least for those with a time horizon of three years or so.
Toronto-Dominion Bank
Last, but certainly not least on this list of dividend stocks investors should consider right now, is Canadian banking giant Toronto-Dominion Bank (TSX: TD).
Like most of its peers, the volatility we’ve seen in TD stock has abated significantly. Indeed, since the tariff-related dip which hit most stocks in April, TD stock has done nothing but soar as dividend and long-term growth investors alike piled into this name.
Such a bullish view makes sense in the context of investors looking to take advantage of discounts on high-quality blue-chip names. TD’s dividend yield of 4% is right around the sector average. But in terms of quality among its large Canadian banking peers, I’ve long thought TD deserves a premium.
As more investors look for stability and long-term total returns, I think TD will be a top Canadian stock that is likely to outperform over the long run.
