I think we’re about to enter a period of time in which investors who focus on true blue chip stocks will outperform. I’m talking about companies with established historical track records of performance, and valuations and balance sheets that are both stable and due for improvement.
The good news is that there are plenty of such stocks in the Canadian market to choose from. I’m going to select from a broad list of top TSX dividend stocks right now. This article is aimed at investors with a long investing time horizon, though I think these stocks are likely to outperform over near- and medium-term timeframes as well.
Here’s why these three companies could turn out to be some of the best bets the TSX has to offer for long-term investors.
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Whitecap Resources
Whitecap Resources (TSX:WCP) is a top mid-tier Canadian energy producer I think is relatively overlooked in this current environment.
Unlike its larger-cap peers, Whitecap’s size offers investors an advantage, in my view. The company has continued to scale its operations, both in terms of production and earnings growth over time. In fact, over the past year, Whitecap’s top-line revenue has surged from $891 million in Q3 2024 to $1.7 billion this past quarter. That’s a near doubling for a company in the energy sector – a move that’s generally unheard of.
With surging free cash flow and a manageable debt load, Whitecap’s upside from here remains robust. And with a forward price-earnings multiple of less than 10 times, it’s hard to find this mix of growth and value in the market today. That’s to say nothing of the company’s impressive 6.2% dividend yield.
Rogers Communications
In the world of large-cap Canadian telecom stocks, Rogers Communications (TSX:RCI.B) is perhaps the top player I continue to think provides investors with excellent value.
Rogers’ impressive move over the past few months is one I’ve been noting is probably a buying opportunity. That call has been correct, with this share price appreciation once again driving Rogers’ dividend yield back below 4%.
With a current dividend yield of 3.6% at the time of writing, that’s still very attractive for investors looking for not only passive income (and growing dividend income over time), but some capital appreciation as well.
Driven by rock-solid cash flows from cellular plans, Rogers should have plenty of room to grow its dividend as the company continues to ramp up efficiency initiatives, which should drive higher margins over time.
Killam Apartment REIT
For investors looking to ramp up their real estate exposure, I’ve long thought Killam Apartment REIT (TSX:KMP.UN) is a great way to go.
This fund focuses on residential real estate in key Canadian markets. What I’ve liked specifically about this company is its ability to grow cash flow per unit in a challenging rate environment, which has clearly impacted the company’s stock.
The thing is, compared to other similar REITs in the market, Killam’s performance isn’t an outlier. In other words, there’s a bearish macro narrative building around companies like Killam in the residential real estate market.
I do think we could be due for a few years of pain ahead. The question investors have to ask at this point is whether these headwinds are already fully priced into Killam’s stock price. I think they are. This stock looks like a buy to me.
