Dividend stocks allow investors to benefit from both capital appreciation and regular dividend payments. However, dividends are never guaranteed, making it important to focus on high-quality companies with durable business models and the ability to generate consistent cash flows. Another key factor to consider is a history of dividend growth, which often reflects a company’s financial strength, earnings stability, and confidence in its long-term prospects.
With that in mind, let’s take a look at three top Canadian companies that have recently announced another round of dividend increases.
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Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) is one of Canada’s largest financial institutions, offering a broad range of banking and financial services across multiple countries. Its diversified revenue base supports stable and reliable cash flows, enabling the bank to maintain an uninterrupted dividend-paying record dating back to 1833. Reflecting its solid financial performance, BNS increased its quarterly dividend by 3.6% to $1.14 per share in May. Over the past decade, the bank has grown its dividend at an annualized rate of 7% and currently offers an attractive forward yield of 3.9%.
Meanwhile, persistent inflationary pressures could prompt central banks to maintain a cautious approach to monetary easing. A higher interest-rate environment would support BNS’s core lending operations by helping preserve healthy net interest margins, thereby driving earnings growth. The bank is also pursuing strategic initiatives to enhance operational efficiency and capital allocation. Recently, it announced plans to acquire the remaining shares of Scotia Group Jamaica Limited that it does not currently own. The transaction is valued at approximately $0.5 billion, with completion expected in the fourth quarter.
In addition, BNS launched a new share repurchase program in April, authorizing the buyback of up to 15 million shares over the next 12 months. Supported by its strong capital position, consistent dividend growth, and shareholder-friendly capital allocation strategy, I believe BNS remains an attractive option for income-focused investors.
Peyto Exploration & Development
Another Canadian company that recently increased its dividend is Peyto Exploration & Development (TSX:PEY), a leading producer of natural gas and natural gas liquids in Alberta’s Deep Basin. Over the past 27 years, the company has expanded its production capacity through a combination of strategic acquisitions and disciplined capital investments, driving strong operational and financial performance. During this period, Peyto has generated impressive average returns, with average ROCE (return on capital employed) and ROE (return on equity) of 17% and 24%, respectively. Reflecting this strength, the company raised its monthly dividend by 9% last month to $0.12 per share, giving the stock an attractive forward yield of 5.7%.
Peyto also stands to benefit from a supportive commodity-price environment. Ongoing geopolitical uncertainty in the Middle East could support elevated natural gas prices, providing a tailwind for the company’s revenue and cash flow. In addition, Peyto ended last year with total proved reserves of 8.7 trillion cubic feet equivalent, or 1.45 billion barrels of oil equivalent, providing a substantial resource base to support long-term production.
The company continues to invest in growth opportunities as well. During the first quarter, Peyto deployed $150.5 million in capital expenditures, which included drilling 23 wells and acquiring interests in 21 additional wells. These investments should strengthen its production profile and support future cash flow growth. Given its high-quality asset base, disciplined capital allocation, and favourable industry backdrop, I believe Peyto is well-positioned to continue rewarding shareholders with attractive dividends.
Toronto-Dominion Bank
Toronto-Dominion Bank (TSX:TD) is one of North America’s leading financial institutions, offering a broad range of banking and financial services across Canada and the United States. Its diversified business model generates stable, recurring cash flows, enabling the bank to maintain an impressive 169-year dividend-paying record. The bank also delivered strong second-quarter results last month, with adjusted earnings per share (EPS) increasing 20.8% year over year. Reflecting its solid financial performance, TD raised its quarterly dividend by 3.7% to $1.12 per share, yielding 2.7% forward.
TD continues to invest in initiatives to drive long-term growth and enhance shareholder value. The bank focuses on deepening client relationships, improving operational efficiency, and modernizing its technology infrastructure and business processes. At the same time, it is leveraging automation, digital capabilities, and AI-driven solutions to streamline operations, lower costs, and boost productivity. These initiatives should strengthen TD’s competitive position and support sustainable earnings growth over the coming years.
Supported by these strategic investments, management expects adjusted EPS to grow at an annualized rate of 7–10% through fiscal 2029. Given its strong market position, healthy growth outlook, and long-standing commitment to returning capital to shareholders, TD appears well-positioned to continue increasing its dividend, making it an ideal choice for income-focused investors.
