21st June 2024

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Business Industry and Financial

Exploring Three TSX Dividend Stocks Including National Bank of Canada

Over the past year, the Canadian market has shown robust growth with a 13% increase, despite a recent flat performance over the last week. In this context, dividend stocks like National Bank of Canada can be appealing for their potential to provide investors with steady income streams in addition to capital appreciation opportunities.

Top 10 Dividend Stocks In Canada

Name Dividend Yield Dividend Rating
Bank of Nova Scotia (TSX:BNS) 6.51% ★★★★★★
Whitecap Resources (TSX:WCP) 7.02% ★★★★★★
Power Corporation of Canada (TSX:POW) 5.64% ★★★★★☆
Enghouse Systems (TSX:ENGH) 3.56% ★★★★★☆
Secure Energy Services (TSX:SES) 3.51% ★★★★★☆
Boston Pizza Royalties Income Fund (TSX:BPF.UN) 8.61% ★★★★★☆
Russel Metals (TSX:RUS) 4.38% ★★★★★☆
Canadian Natural Resources (TSX:CNQ) 4.07% ★★★★★☆
Royal Bank of Canada (TSX:RY) 3.81% ★★★★★☆
Sun Life Financial (TSX:SLF) 4.66% ★★★★★☆

Click here to see the full list of 31 stocks from our Top TSX Dividend Stocks screener.

Underneath we present a selection of stocks filtered out by our screen.

Simply Wall St Dividend Rating: ★★★★★☆

Overview: National Bank of Canada offers financial services to a diverse clientele, including individuals, businesses, and governmental bodies both in Canada and globally, with a market capitalization of approximately CA$39.22 billion.

Operations: National Bank of Canada generates revenue through its Wealth Management segment (CA$2.54 billion), Personal and Commercial banking (CA$4.32 billion), Financial Markets excluding USSF&I (CA$2.66 billion), and U.S. Specialty Finance and International operations (CA$1.10 billion).

Dividend Yield: 3.7%

National Bank of Canada offers a stable and reliable dividend, maintaining a payout for over a decade with recent dividends well-covered by earnings, showing a 42.5% payout ratio. Despite trading at 33.4% below its estimated fair value and having a lower yield (3.72%) compared to the top Canadian dividend payers, it has demonstrated consistent growth in dividend payments. Revenue forecasts suggest an 8.69% annual increase, supporting future dividend sustainability with an anticipated payout ratio of 46.2% in three years.

TSX:NA Dividend History as at May 2024
TSX:NA Dividend History as at May 2024

Simply Wall St Dividend Rating: ★★★★★☆

Overview: Royal Bank of Canada is a diversified financial services company with global operations and a market capitalization of approximately CA$204.36 billion.

Operations: Royal Bank of Canada generates revenue through several key segments: Personal & Commercial Banking (CA$20.56 billion), Wealth Management (CA$17.25 billion), Capital Markets (CA$10.19 billion), and Insurance (CA$5.88 billion).

Dividend Yield: 3.8%

Royal Bank of Canada provides a stable dividend, with payments increasing over the past decade and a payout ratio at 50.1%, indicating that dividends are well-covered by earnings. Despite its lower yield of 3.81% compared to higher market averages, RBC’s dividends are projected to remain sustainable with similar coverage expected in three years (50.6%). The bank’s recent trading price is 26.7% below its estimated fair value, potentially offering an attractive entry point for investors considering long-term income generation through dividends.

TSX:RY Dividend History as at May 2024
TSX:RY Dividend History as at May 2024

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Suncor Energy Inc. is an integrated energy company with operations across Canada, the United States, and internationally, boasting a market capitalization of approximately CA$72.05 billion.

Operations: Suncor Energy Inc.’s revenue is primarily derived from its Oil Sands segment, which generated CA$23.76 billion, and its Refining and Marketing segment, contributing CA$31.51 billion, with an additional CA$2.17 billion from Exploration and Production.

Dividend Yield: 3.9%

Suncor Energy has shown robust production growth, with oil sands production increasing significantly from the previous year. Despite a lower net income in Q1 2024 compared to the same period last year, the company maintains a quarterly dividend of CA$0.545 per share. However, its dividend yield of 3.93% is below the top tier in Canada’s market and has experienced volatility over the past decade. The dividends are reasonably covered by both earnings and cash flow with a payout ratio of 35.2%, suggesting sustainability despite past fluctuations.

TSX:SU Dividend History as at May 2024
TSX:SU Dividend History as at May 2024

Taking Advantage

Curious About Other Options?

This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.
It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

Valuation is complex, but we’re helping make it simple.

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