5 TSX Dividend Stocks With Solid Yields Built for Steady Cash Flow in Any Market

Find out how to earn passive income through dividend-paying stocks. Explore top choices for reliable returns and growth.

Puja Tayal

Author Bio

Puja Tayal grew up in a small-business family where dinner conversations often centred on working capital and savings. Her early experiences with investing, particularly during the 2008 financial crisis, shaped her approach to understanding markets and evaluating investment opportunities. She began her career at a mutual fund company before moving into investor education and financial writing for asset and wealth management firms. Before joining The Motley Fool, Puja wrote for Market Realist, where she extensively covered the semiconductor industry. Her published work has also appeared in The Indian Express. Puja believes every stock has a story that can help investors understand its potential returns. She combines business analysis with different investing approaches to help investors make informed decisions and align their portfolios with their long-term financial goals. Outside of finance, Puja enjoys long drives, catching up with friends, watching superhero and science-fiction movies, and managing her family portfolio. She also has a keen interest in artificial intelligence and its potential to reshape the world.

Education

Bachelor's degree in Accounting and Finance, University of Mumbai (2007)
CFA Level I

Areas of Expertise

Qualitative company analysis, management strategy, risk assessment, long-term investing, portfolio diversification and rebalancing, dividend reinvestment, cyclical growth opportunities, compounding strategies, growth stocks, and dividend stocks.

Social Media Profiles

Favorite Investment Quote

"Risk comes from not knowing what you're doing." — Warren Buffett

Published July 6, 7:00 pm EDT

Many people delay investing as they don’t want to part ways with liquid cash for a longer term. Or they may not invest because they don’t know which stock to buy. Stock market investing comes with risk, but low-risk, regular dividend-paying stocks can put your fears at ease. You don’t have to stay away from your money for long, and while you are invested, you can get a 5–8% annual return in quarterly or monthly payments.

A plant grows from coins. — Source: Getty Images

TSX dividend stocks that give steady cash flows in any market

Here are five strong dividend stocks across sectors and market caps that give steady cash flow and also grow your money over time.

Dividend stocks for growing payouts

In the banking sector, Royal Bank of Canada (TSX: RY), one of the Big Six, is a large-cap stock to buy and hold. It has a long history of paying dividends and growing them in most years. If we start from 2000, RBC has grown dividends in 24 of the last 26 years.

RBC’s business is equally divided between Banking and Wealth Management. It has personal and commercial banking business in Canada and the United States. When interest rates rise, the banking business delivers strong returns as it earns more interest on mortgages and attracts more deposits. When interest rates fall, stock markets do well, and its wealth management business delivers strong earnings, balancing the bottom line. This helps RBC sustain and grow dividends.

In the telecom sector, Cogeco Communications (TSX: CCA) is a mid-cap stock that has grown its dividends in 15 of the last 16 years of dividend-paying history, with a dividend cut in 2014. It is not a market leader in its sector, but its business model of leasing mobile network from incumbents reduces its capital expenditure requirement. It pays 30% of free cash flow as dividends, which gives it ample flexibility to sustain and grow dividends even in a weak business environment.

In the energy sector, Canada Natural Resources (TSX: CNQ) is another large-cap stock that is a market leader in oil and gas reserves. It has grown dividends in all 25 years of its dividend payments. Its strength is its low cost per barrel and Canada’s efficient energy infrastructure, which makes its oil and gas available to the United States. Canada is now expanding the export of its oil and gas to Asian and European markets. This will allow CNQ to continue growing its dividends in the years to come.

Dividend stocks for monthly payouts

The above three stocks pay quarterly dividends, but real estate stocks pay monthly dividends.

SmartCentres REIT (TSX: SRU.UN) is the largest retail REIT in Canada, and its strength is its largest tenant, Walmart. Grocers are sticky and attract other retail stores. Most of its stores are open-air stores at intersections. SmartCentres is converting land around these stores to city centres by building residential, commercial, and storage units. With 14% of its portfolio under development, the REIT will give you a diversified rental income from mixed-use facilities in the future, reducing concentration risk around retail. The REIT has a 23-year dividend-paying history and should be bought for its 6% yield. Do not expect dividend growth as capital is being allocated for property development.

CT REIT (TSX: CRT.UN) is a mid-cap REIT but is a business arm of the large-cap retailer, Canadian Tire. The REIT has a 13-year dividend-paying history and has grown its dividend by 3% on average. Its strength is the way the trust structure is designed. When Canadian Tire wants to build or acquire a new store, CT REIT has the first right of refusal. So any new store it acquires or builds already has the occupancy determined. Moreover, Canadian Tire pays development costs upfront to the REIT, reducing the need for large capital expenditure. With no brokerage or marketing costs and long-term leases with Canadian Tire, under which rent increases by 1.5% annually, the REIT pays regular dividends in every market.

Investor takeaway

You can accumulate all five stocks over the years by investing in them whenever you have money. These recommendations remove the confusion of stock picking.