Our Top 5 Canadian DGI Stocks To Hold Forever
Our Top 5 Canadian DGI Stocks
Got to Love Dividend Growth Investing. Once you buy the stocks, there really isn’t much you need to do if they are great companies. Set them to Drip and forget it. The stocks keep doing their thing and as the dividend growth name implies they raise those payouts every year, It’s a beautiful thing.
Unlike the States, Canada is kind of limited on stocks. We are heavy Utilities, Energy, Financial’s and Basic Materials although our tech game is getting stronger. We do have some great dividend growth stocks though! These are our top 5 Canadian dgi Stocks.
#5 – Telus – Ticker symbol – T
Telus is one of Canada’s leading telecommunications companies. While covid has been devastating to so many businesses Telus continues to increase their earnings and branch to new opportunity’s. Telus Health in particular is one I’m excited about and can easily continue to grow.
Telus isn’t officially a wide moat stock but they have the best customer service ratings in the business. Once you sign up with them, there’s a good chance your sticking with them.
They have raised their dividend the past 16 years and recently raised their dividend at the start of the month by 6.84%, so will be 17 years now.
Their 10 year dividend growth rate is 9% but their 5 year is 8.2%. A solid dividend growth rate followed with 5% starting yield and some capital appreciation to boot. They are targeting a 7-10% dividend growth rate until 2022 for now.
#4 – Td – Ticker symbol – Td
Canada’s second largest bank and one of 2 wide moat banks. (other being Royal) Td has been a great investment for us and I love their US exposure as well. This is a big reason it makes the list vs the other Canadian banks. While the us exposure has hurt the bank recently, news of Biden and vaccine hopes have propelled the stock the last month.
You really can’t go wrong with Canadian Banks as an investment, they have done very well over the long term but dividend growth may be stunted until the economy get more secure. Canada’s banking regulator recently cautioned against lifting restrictions on banks dividend payments and share buybacks incase covid spikes again.
Luckily Td is one of the first banks to announce their raise and boosted theirs 6.8% in February this year before covid blew up and regulators restricted things. So they will be the only bank that could raise theirs in 2020.
Td has raised their dividend the past 9 years and sports a 5 year dividend growth rate of 9.5% but their 3 year sits at 10.2% so we can they have been very shareholder friendly. After their recent run up they still offer a great 4.48% starting yield.
#3 – Enbridge – Ticker symbol – Enb
We all know they dominate the oil and natural gas pipeline space but they will be a major renewable energy player as well. Enbridge has committed 7.8 billion dollars to this space and once these projects are done completion they will generate enough energy to power 946,665 homes!
They are currently one of our largest holdings. I love this stock and in a market full of overpriced stocks, this one is cheap. Why is that? Well we currently aren’t driving/ flying etc as much and the world is transitioning to renewable energy. Investment dollars have jumped ship. But I think this is overdone and we will still be using traditional energy for a long time. The Line 3 replacement is now only one step away from construction and as I stated earlier they will be moving towards more renewable energy projects.
Enbridge is a wide moat stock. It is sooo wide that I can’t ever leave them. They supply the natural gas to heat our water and run that furnace. I can’t call anyone else, they are the only player. Got to love owning stocks that you have to pay monthly.
They have treated me very well from a dgi point of view but the stock price hasn’t. Last month the price was the cheapest its been in 5 years. (I bought more)
Enbridge has raised their dividend for the last 24 years and most likely they will in December yet again. Their 10 year dividend growth is a mouth watering 14.8% but their 3 year has dropped to 11.7%. Still great but I expect that dividend growth rate to slow for a couple years as they pay back some debt. In the meantime if you bought today you would get a staggering 7.84% starting yield.
#2 – Brookfield Renewable Partners – Ticker symbol – Bep.un
Our best performing stock of the portfolio! To say this stock has treated us well would be a understatement. We are up 290% and that doesn’t even include the bepc.un spin off that I sold at around 81 to lower our exposure to them. Clearly a big mistake but brookfield renewable still makes up 6.4% of our entire portfolio.
- Note bepc is the same company but was made to give investors greater flexibility tax wise basically.
As I mentioned earlier the world wants more renewable energy and investment dollars keep heading this way. Who can argue clean energy? This is a space that everyone should have in their portfolio for the long term.
Do I think they are overvalued atm? For sure, but bep operates one of the world’s largest publicly-traded renewable power platforms and people are willing to pay for that exposure.
The company is a global leader in hydroelectric power, which comprises approximately 64% of its portfolio. It is also an experienced global owner and operator of, and investor in, wind, solar, distributed generation, and storage facilities. (Source – Brookfield Renewable Website)
From a dividend growth perspective they have consistently raised their dividend for 10 years and have a 10 year growth rate of 5.1% and they plan on raising their dividend by 5-9%. One of the lower growth rates of the bunch, but what it lacks in dividend growth it has made up in capital appreciation. The stock will forgo a 3 for 2 stock split on dec 11th as well.
#1 – Canadian National Railway – Ticker symbol – CNR
My #1 stock got to be cnr. I absolutely love this company. Wide moat, capital appreciation and great dividend increases. Don’t let that low starting yield scare you off.
CN is a world-class transportation leader and the only transcontinental railway in North America. Our 19,600-mile network spans Canada and Mid-America, connecting three coasts: the Atlantic, the Pacific and the Gulf of Mexico. We offer fully integrated rail and other transportation services, including intermodal, trucking, freight forwarding, warehousing and distribution. (Source – CN website)
Look at those tracks, they have such a massive range and connecting to 3 coasts gives them so much shipping options. Railways are so critical to our economy, they ship a wide range of products and are the most cost effective way to ship something. (besides pipelines) They are not congested by traffic and can pull a tonne of trailers.
In my opinion CNR is one of the safest investments you can make as well. The tracks are already in place, so its unlikely a competitor would or could place lines along them. The capital required to do that would be huge. I have heard electric self driving trucks will take a dent out of railways earnings in the future but I don’t see that happening as the roads would get congested and they just can’t pull as big of a load.
CNR has raised its dividend every year since it’s IPO 25 years ago November 17th 1995. So they currently have a 24 year dividend growth streak. Their 10 year dividend growth sits at 15.6% and their 5 year is even higher at 16.5%. This is a stock you can buy and barely look at, they treat shareholders very well.
This is another stock that seems overvalued at the moment but I will gladly buy more on a dip.
Well that concludes our Our Top 5 Canadian DGI Stocks. These are all stocks I feel you can set it and forget it. With the green energy movement Enbridge is the highest risk of the 5 but I feel the risk reward ratio is too hard to pass up currently. All 5 of these stocks are in our portfolio.
Fortis and Canadian Utilitys deserve a mention for sure as they sport the top 2 longest Canadian dividend growth streaks at 48 years (cu) and 46 years with fortis.
I asked the community on twitter what their top 5 Canadian dgi stocks were. Here are some other company’s mentioned that I didn’t include in my top 5 or mention above.
Canadian Tire, Bell Canada, Toromont Industries, Ccl Industrys, Alimentation Couche-Tard, Emera, Brookfield Asset Management, Brookfield Property Partners, Brookfield Infrastructure Partners, Bank of Nova Scotia, Royal Bank, Algonquin Power, Canadian Pacific Railway, TC Energy, BMO, Capital Power Corp, Go Easy Financial, Exchange Income Corporation, Restaurant Brands International
Clearly a huge range of companies. Personal finance is just that, personal. We all have our favourites.. Which are your Top 5 Canadian DGI Stocks?
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.
Holding all these stocks. Loving BEPC, as it pushed over 103 today. Eagerly awaiting the split! 🙂 TD is my largest holding of the 5.
Nice, Yeah bep and bepc have had quite the run. Kinda wonder when it will slow down but with a split ppl may think its cheap again. Wanted to buy more td at 55 but didnt think the banks would run so much the last 2 weeks… Ahhh well that’s always something out there.
Great Canadian dividend stock list and have been close to buying Telus so many times!!
Telus is great. Everyone talks about the American T with a massive debt load and minor raises each year while our T is making great moves and bumping those dividends a lot more. Come on over! =)
I didn’t see Metro (MRU) listed anywhere. With dividend increases being churned out at over 10% for several years it’s proved itself to be the best of the Canadian grocery chains. This company went through the 2008-09 financial crisis without a problem and the latest bouncing market this year, to show it’s recession proof. People have to shop for their groceries, at least we do.
You are right, this whole covid ordeal has identified essential businesses to buy in the future. Metro and Loblaws may be one of them. We all need our groceries.
Some very stable Canadian dividend payers in that list, I like it!
As a European, I find Canadian dividend stocks a very attractive diversification. A solid alternative to US, and our own companies on our side of the pond. What strikes me is the lack of mention of ATCO. The coverage is very scant and it is seldom referred to. By my reckoning it is a very good addition to any defensive portfolio of stocks. It has achieved quite well regarding for instance Piotroski scoring by my accounts: for 2018 it was 6, for 2019 it was 7 (Piotroski is a score of 0-9, where anything 0-3 is “stay away” and companies with 7-9 do statistically better than index). And seems to have a nice ESG agenda. Would love you hear your take on ATCO!
Its definately great to have international exposure! I’m trying to build our with the use of us stocks and xax etf.
As for atco its a great company as well. Cant mention every great stock but I did mention cu.
Personally I’d rather own cu, fortis, bep or algonquin over atco though. (we do own cu, bep and algonquin)
Cant own them all but atco has a great dividend history as well!
Great list. I totally missed that BEP will do a 3 for 2 stock split. 🙂
Yeah great to hear, my dividend was barely going to drip at these prices. =)
I have only 100 shares of BEP. Too bad didn’t buy more of this and right now it’s so expensive I don’t want to add to it. Missed my chance when it was lower during the pandemic.
Same mistake as you. I also sold my BEPC. It’s in my RRSP account. BEP and BEPC have the same distribution and I feel there is no need to hold BEPC there. Also I feel it’s already overvalued. Looks like every time I sold something it will go up. LOL.
I owe all five of them on your list and I am adding T from time to time in my taxable account. I didn’t have drip there and whenever I have accumulated enough money I will just buy 100 shares of T. I did this again two weeks ago.
BIP is also pretty good. My BPY is still under water but I am sure it will come back. I also should buy more bam.a.
Regarding to banks, I cannot make up my mind which one of RY and TD is better. I have invested in all 5 big banks and NA. But I plan to gradually switch to RY, TD and NA.
100 is better than nothing and you will have like 133 shares in 2 weeks =)
Nice purchase of telus, I’d like to grow our position in them as well. BIP is solid, but I missed the boat there, one day. BPY was a little nerve wrecking but I knew bam would be scooping up shares. Its impressive to see how fast they have rebounded in price lately though. I’m now up on them. I actually keep debating selling all our reits and buying a monthly reit etf. Time will tell.
As for our banks, I hear you. I own 4 but don’t own royal. Selling bmo and na for royal or just selling bmo for more national have been on my mind. Both bmo and national aren’t big enough to drip so I don’t see the point of having 2 small positions. I think I may be better to consolidate.
Good list Rob. I like and own most of these names as well. I think if I had to choose a renewable stock, I might pick Algonquin over BEP, just because the valuation seems more reasonable to me. I might also pick BIP over BEP as a buy and hold forever play, but that’s just a small preference on my part. They are both pretty solid choices.
I’ve wanted to own CNR, but it almost always seems to be too expensive! Someday I am going to just have to bite the bullet and dive in.
Will definitely plan to add to positions in most of these names (ENB was a recent add at $36) once this furnace craziness clears the system.
I just had a furnace guy here as well. Think we are going to replace our air exchanger. Fun times… haha Hope you got your new furnace already the hvac guy was telling me that some are on back orders already.
I feel the exact same about bep. I love it but wouldn’t be a buyer here actually I have thought of buying more algonquin next purchase. So I agree completely.
BIP is another great one but its hard adding another utility when my portfolio is already so utility heavy. CNR is fantastic but is another one that is probably overvalued atm. If the states do lock down for a bit, I think we may see a nice pullback. Id love to add to our position in them if they drop.
My top 5 DGI stocks are FTS, TD, MRU, CNR and T. My honourable mentions are RY, ATD.B, ENB, CTC.A and EMA.
Welcome and thanks for commenting. That is a great list and Metro, Canadian Tire and Emera have been brought up a couple times from others. Covid has taught me that I need to eventually get a position in grocery. When everything is shutting down Grocery is getting all the business.
I also likes MRU a lot. Waiting to add to MRU and CNR as they are pretty expensive atm.
Where would I get started with doing this kind of investing? I really would like to generate extra income and am with RBC but not sure if they do that. Thank you!
Rbc offers direct investing. You would need to call them to setup an account for you.They charge 9.95 per trade. Questtrade you can setup online and also offers free trades. I use both. If you decide to use questrade feel free to use my qt affliate on my dividend portfolio page. We both would get some $ if I recall correctly at no extra charge to you.
Any more questions, feel free to ask. Congrats on getting started, that’s one of the hardest parts. Good luck!
Hello again Rob,
Would it be wise to fill up all the TFSA and RRSP before doing direct investing? I just don’t seem to get that part of the equation…! Thanks for your thoughts.
for simplicity all my canadian stocks are in our tfsas/resps and our us stocks are in our rrsp.
so I opened a tfsa direct investing account. There are advantages to both accounts but the nice things about the tfsa is everything inside it is tax free. All dividends and gains. rrsp you will get a tax return but everything in the future gets taxed. You also cant pull out money from an rrsp without fees if an emergency were to come up.
hope that helps