Dividend-paying stocks that combine healthy balance sheets with hefty yields can provide investors with steady incomes, cushion against market downturns, and grow investments at a healthy clip.
In January 2024, the top-performing dividend-payers included Tricon Residential TCN, Leon's Furniture LNF, and Fairfax Financial Holdings FFH.
To find the month's top 10 income-focused stocks, we screened the Morningstar Canada Index—which measures the performance of Canada's broad regional markets, targeting the top 97% of stocks by market capitalization—for companies with a forward dividend yield of at least 1%, excluding real estate investment trusts.
The Best-Performing Canadian Dividend Stocks of January 2024
- Tricon Residential TCN
- Leon's Furniture LNF
- Fairfax Financial Holdings FFH
- CI Financial CIX
- Secure Energy Services SES
- Peyto Exploration & Development PEY
- Pet Valu PET
- Altus Group AIF
- Parkland PKI
- Mullen Group MTL
How Have Dividend Stocks Performed Over the Past Year?
In the 12 months leading up to January 31, the Morningstar Canada Dividend Growth Index, which tracks the performance of Canadian stocks with a history of uninterrupted dividend growth and the capacity to sustain that growth, rose 8.0%. The Morningstar Canada Dividend Yield Focus Index, which tracks the performance of high-quality, dividend-paying Canadian stocks, fell -4.3%.
During the same period, the overall Canadian stock market gained 5.2% as measured by the Morningstar Canada Index.
Yields and Metrics for the Best-Performing Income Players
Tricon Residential
Real estate services company Tricon Residential rose 22.7% in January to end the last 12 months up 30.8%. Trading at $14.80 per share, its stock has a forward dividend yield of 2.10%. Tricon Residential pays investors an annual dividend of $0.32 per share. The no-moat stock is currently trading at a 35% discount to its quantitative fair value estimate of $22.77 per share, leaving it moderately undervalued.
Leon's Furniture
Specialty retail firm Leon's Furniture rose 17.2% in January, leaving it up 16.7% over the past year. At $21.28 per share, its stock has a forward dividend yield of 3.38%, and an annual dividend of $0.72 per share. The narrow-moat stock is moderately undervalued, trading 30% below its quantitative fair value estimate of $30.37 per share.
Fairfax Financial Holdings
Property and casualty insurance company Fairfax Financial Holdings gained 16.3% in January to end the last 12 months up 61.4%. The stock's $1401.47 price gives it a forward dividend yield of 1.45%. Fairfax Financial Holdings pays investors an annual dividend of $81.16 per share. With a fair value estimate of $970 per share, the no-moat stock is significantly overvalued, trading at a 44% premium.
CI Financial
Asset management firm CI Financial rose 10.4% in January, leaving it up 8.0% over the past year. Trading at $16.40 per share, CI Financial stock has a forward dividend yield of 4.88% and an annual dividend of $0.80 per share. The narrow-moat stock is trading near its fair value estimate of $16 per share.
Secure Energy Services
Waste management company Secure Energy Services gained 9.3% in January to end the last 12 months up 32.2%. Trading at $10.31 per share, its forward dividend yield is 3.88%. Secure Energy Services pays investors $0.40 per share annually. The no-moat stock is trading near its quantitative fair value estimate of $10.71 per share.
Peyto Exploration & Development
Oil and gas exploration and production firm Peyto Exploration & Development gained 8.6% in January, leaving it up 17.8% over the past year. At $12.97 per share, Peyto Exploration & Development stock has a forward dividend yield of 10.18% and an annual dividend of $0.44 per share. The no-moat stock is moderately undervalued, trading 15% below its quantitative fair value estimate of $15.20 per share.
Pet Valu
Specialty retail company Pet Valu rose 8.3% in January to end the last 12 months down 20.6%. Trading at $31.18 per share, Pet Valu stock has a forward dividend yield of 1.28% and an annual dividend of $0.40 per share. The narrow-moat stock is trading near its quantitative fair value estimate of $36.93 per share.
Altus Group
Real estate services firm Altus Group rose 7.6% in January, leaving it down 19.4% over the past year. Trading at $45.32 per share, Altus Group stock has a forward dividend yield of 1.32% and pays investors an annual dividend of $0.60 per share. The no-moat stock is currently trading at an 18% discount to its quantitative fair value estimate of $55.58 per share, leaving it moderately undervalued.
Parkland
Oil and gas refining and marketing company Parkland gained 7.4% in January to end the last 12 months up 51.1%. The stock's $45.88 price gives it a forward dividend yield of 2.96%. Parkland pays investors an annual dividend of $1.36 per share. With a quantitative fair value estimate of $46.89 per share, the no-moat stock is fairly valued.
Mullen Group
Trucking company Mullen Group rose 7.1% in January, leaving it up 11.4% over the past year. At $14.97 per share, Mullen Group has a forward dividend yield of 4.81% and an annual dividend of $0.24 per share. The no-moat stock is trading near its quantitative fair value estimate of $16.23 per share.
What Is the Morningstar Canada Index?
The Morningstar Canada Index measures the performance of Canada's broad regional markets, targeting the top 97% of stocks by market capitalization. The index does not incorporate environmental, social, or governance criteria.
What Is the Morningstar Canada Dividend Yield Focus Index?
The Morningstar Canada Dividend Yield Focus Index captures the performance of a portfolio of high-quality, dividend-paying securities.
The Morningstar Canada Dividend Yield Focus Index captures the performance of a portfolio of high-quality, dividend-paying securities. It's a subset of the Morningstar Canada Index (which represents 97% of the equity market capitalization) that includes only stocks that pay dividends. The stocks are screened for economic moat and financial strength compared to others in their sector. Real estate investment trusts are excluded.
The 25 highest-yielding stocks are included in the index, weighted by the dollar value of the dividends. See the full rulebook here.
The Best Dividend Stock Leaders: More Ideas to Consider
Investors who would like to find more top-performing or cheap dividend stocks can do the following:
- Review the full list of stocks in the Morningstar Canada Dividend Yield Focus Index. Stocks with Morningstar Ratings of 4 or 5 stars are undervalued, according to our metrics.
- Use our Morningstar Stock Screener tool to find the best dividend stocks according to your specific criteria. You can search for stocks based on their dividend yields, valuation measures like price/earnings ratios, and more.
This article was edited by Lauren Solberg and reviewed by Ruth Saldanha.
As part of our mission to put more information into the hands of investors, this article was compiled from Morningstar’s data and independent research using automation technology. The original article was written by Morningstar reporters and editors. This updated version was reviewed by an editor.
Companies that are not formally covered by a Morningstar analyst have quantitative ratings. These companies are statistically matched to analyst-rated companies, allowing our models to calculate a quantitative moat, fair value, and uncertainty rating.
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