Do you want to own TSX dividend stocks that will pay you no matter the market conditions?
If so, you’re certainly looking in a promising pool.
TSX dividend stocks are some of the most reliable dividend payers in the world. Canadian utilities, in particular, have some of the best dividend track records in North America – a few have 50-plus year dividend growth streaks. Canadian financials are also quite reliable in terms of making payments, albeit with occasional disruptions to dividend increases.
In this article, I’ll explore five Canadian dividend stocks that will pay you no matter the market conditions.
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Enbridge
Enbridge (TSX: ENB) is a Canadian company operating in the energy sector. A midstream energy company and utility, it has a 5.6% dividend yield today.
Enbridge is one of North America’s most important energy companies. Its pipeline segment operates the biggest pipeline in North America, spanning 2,840 kilometres. Its utility segment supplies 75% of Ontario’s natural gas. Pipeline projects are notoriously hard to get approved (see e.g. Keystone), which protects Enbridge’s moat. Despite the cyclicality of the overall energy market, Enbridge has paid its dividend reliably for decades, even increasing the payout most years.
Fortis
Fortis Inc (TSX: FTS) is a Canadian utility company. Its stock has a 3.4% dividend yield and a 52-year track record of uninterrupted dividend increases. Fortis’ dividend growth track record is partially because the company operates in a known non-cyclical sector: utilities. Utility companies provide things like heat, light, and water. People usually don’t cut out these services even in severe recessions. So utilities’ revenues tend to be stable. On top of that, Fortis specifically maintains a sensible payout ratio and invests consistently in growth. As a result, it has performed better than most Canadian utilities long term.
CN Railway
The Canadian National Railway (TSX: CNR) is a Canadian transportation stock with a 2.05% dividend yield and 29 consecutive years of dividend increases under its belt. The company is one of two railroads in Canada, which means it faces little competition. The company also operates in the U.S., where there are more competitors, though the competitors are somewhat geographically siloed due to the fixed nature of rail track.
CNR has been doing relatively well lately, with revenue and earnings both growing following a few stagnant years. Trading at about 22 times earnings, it might just be a decent buy today.
TD Bank
The Toronto-Dominion Bank (TSX: TD) is a Canadian bank stock with 15 years of dividend growth under its belt. Despite the freeze on bank dividend hikes enacted by the Bank of Canada enacted in 2020 due to COVID, TD managed to enact its planned dividend hikes in both 2020 and 2021, as there were enough quarters in 2020 and 2021 to enact dividend hikes, despite the ban.
TD has been growing both its revenue and earnings, and performing well in the markets over the last several years. Last year, it performed particularly well, rising over 50% while the broader markets didn’t rise much at all. Despite a recent trim, TD remains one of my largest stock positions. Its yield isn’t high (about 2.8%) but appears likely to rise over time.
Brookfield Asset Management
Brookfield Asset Management (TSX: BAM) is a Canadian asset management company with a 3.8% dividend yield. The company (including the pre-spinoff entity) has a long history of paying and raising its dividend. BAM’s resilience can be seen in the fact that it did not cut its dividend during the 2008–2009 financial crisis, a time when many financial services companies struggled. Brookfield Asset Management was able to survive in that period because it invested prudently and focused on client relationships. It continues to do so today.
