Researching Canada’s best dividend stocks for 2023
Our process to find stocks with these three ingredients sounds simple, but there was a fair bit of data to go through. We pulled and reviewed a dataset of dividend-paying stocks trading on the TSX and condensed it into a top tier containing the best of the best, as well as a second tier of honourable mentions worthy of further examination. The companies are ranked according to our three criteria.
We applied higher weightings to the first two criteria to reflect their greater importance. The best companies achieved the lowest set of scores. Think of it like golf: the lower the score, the better the performance.
The top-tier companies demonstrate strong qualities for all three criteria, and the second-tier companies are also worth looking at. Companies that didn’t make the cut for either tier fell short on one or two criteria.
Before you log in to your brokerage account, though, here’s a reminder that MoneySense’s “Canada’s best dividend stocks” ranking is based on a purely quantitative analysis of data collected from publicly available stock market information. To ensure broad representation, we included companies that may not have data for a specific field, but those earn no points for that category. And, notably, this ranking does not consider management talent or how economic pressures could weigh on a company’s earnings.
Here’s the breakdown of the three criteria used in our evaluation.
Note: To view all the data in the tables, slide the columns right or left using your fingers or mouse. You can filter or rearrange the rankings by using the search tool or clicking on column headings. You can also download the data to your device in Excel, CSV and PDF formats.
1. Dividend yield and growth
We first identified and ranked companies sporting a history of growing their dividends over the past five years. While current yield is important, ideally we want exposure to companies that have a long-term track record of growing their dividend payouts over those years. This two-pronged approach seeks to identify companies that not only offer attractive yields but are also well positioned to grow their payouts over time. This criteria accounted for 40% of the overall score. Among the top-ranking companies with five-year dividend growth were Winpak (77% dividend growth), Quebecor Inc. (66.9%) and ECN Capital Corp. (57.2%).