10 Best-Performing Canadian Dividend Stocks of the Month

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 May 2024, the top-performing dividend-payers included renewable energy firm Brookfield Corporation BEPC, renewable energy firm Boralex BLX, and renewable energy firm Innergex Renewable Energy Inc INE.

To find the month's 10 best-performing 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 1.5%, excluding real estate investment trusts.

The Best-Performing Canadian Dividend Stocks of May 2024

1. Brookfield Corporation BEPC
2. Boralex BLX
3. Innergex Renewable Energy Inc INE
4. Pan American Silver PAAS
5. Primo Water PRMW
6. Sprott Physical Gold and Silver Trust SII
7. Brookfield Infrastructure Partners BIPC
8. Centerra Gold CG
9. Royal Bank of Canada RY
10. Manulife MFC
    
    

How Have Dividend Stocks Performed?

Over the past month, 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 1.7%. The Morningstar Canada Dividend Yield Focus Index, which tracks the performance of high-quality, dividend-paying Canadian stocks, rose 2.0%. In the 12 months leading up to May 31, the dividend growth index gained 14.9% and the dividend yield focus index gained 5.4%.

The overall Canadian stock market, as measured by the Morningstar Canada Index, has gained 2.8% on the month and 18.8% on the year.

Yields and Metrics for May's Best-Performing Dividend Stocks

Brookfield Corporation

Renewable energy firm Brookfield Corporation rose 35.9% in May and lost 1.6% over the past 12 months. Trading at C$43.07 per share, its stock has a forward dividend yield of 4.5%. Brookfield Corporation pays investors an annual dividend of C$1.94 per share. The stock, which has no economic moat, is currently trading at a 10% premium to its fair value estimate of C$39 per share, leaving it with a Morningstar Rating of 2 stars.

Boralex

Renewable energy firm Boralex rose 25.8% in May and lost 6.0% over the past 12 months. At C$34.85 per share, its stock has a forward dividend yield of 1.89% and an annual dividend of C$0.66 per share. The stock, which has no economic moat, is trading near its fair value estimate of C$36 per share. It has a Morningstar Rating of 3 stars.

Innergex Renewable Energy Inc

Renewable energy firm Innergex Renewable Energy Inc gained 21.5% in May and fell 26.1% over the past 12 months. The stock's C$9.90 price gives it a forward dividend yield of 3.64%. Innergex Renewable Energy Inc pays investors an annual dividend of C$0.36 per share. The stock has a quantitative Morningstar Rating of 3 stars.

Pan American Silver

Gold company Pan American Silver rose 18.7% in May and gained 47.7% over the past 12 months. Trading at C$29.61 per share, Pan American Silver stock has a forward dividend yield of 1.84% and an annual dividend of C$0.54 per share. It has a quantitative Morningstar Rating of 3 stars.

Primo Water

Non-alcoholic beverages company Primo Water gained 18.5% in May and rose 78.3% over the past 12 months. Trading at C$30.88 per share, its forward dividend yield is 1.6%. Primo Water pays investors C$0.49 per share annually. The stock, which has no economic moat, is trading at a 33% premium to its fair value estimate of C$23.20 per share, leaving it moderately overvalued. It has a Morningstar Rating of 2 stars.

Sprott Physical Gold and Silver Trust

Asset management firm Sprott Physical Gold and Silver Trust gained 14.2% in May and rose 36.2% over the past 12 months. At C$60.03 per share, Sprott Physical Gold and Silver Trust stock has a forward dividend yield of 2.27% and an annual dividend of C$1.36 per share. It has a quantitative Morningstar Rating of 3 stars.

Brookfield Infrastructure Partners

Regulated gas company Brookfield Infrastructure Partners rose 13.3% in May and lost 21.6% over the past 12 months. Trading at C$46.61 per share, Brookfield Infrastructure Partners stock has a forward dividend yield of 4.75% and an annual dividend of C$2.21 per share. It has a quantitative Morningstar Rating of 3 stars.

Centerra Gold

Gold company Centerra Gold rose 12.6% in May and gained 18.0% over the past 12 months. Trading at C$9.55 per share, Centerra Gold stock has a forward dividend yield of 2.93% and pays investors an annual dividend of C$0.28 per share. The stock has a quantitative Morningstar Rating of 4 stars.

Royal Bank of Canada

Diversified bank Royal Bank of Canada gained 11.9% in May and rose 27.2% over the past 12 months. The stock's C$148.08 price gives it a forward dividend yield of 3.84%. Royal Bank of Canada pays investors an annual dividend of C$5.68 per share. With a fair value estimate of C$134 per share and a wide economic moat, the stock is moderately overvalued, trading at an 11% premium. It has a Morningstar Rating of 2 stars.

Manulife

Life insurance company Manulife rose 11.5% in May and gained 46.8% over the past 12 months. At C$35.32 per share, Manulife has a forward dividend yield of 4.53% and an annual dividend of C$1.60 per share. The stock, which has no economic moat, is moderately overvalued, trading 18% above its fair value estimate of C$30 per share. It has a Morningstar Rating of 2 stars.

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.

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.
• When it comes to buying stocks, it’s more than just dividends. Read here how valuations and competitive advantages—known as economic moats—matter when it comes to a stock’s potential for outperformance.
• Watch this video to learn how Morningstar uses the star rating, moat rating and other metrics to evaluate stocks.
  
  

Companies that are not formally covered by a Morningstar analyst are statistically matched to analyst-rated companies, allowing our models to calculate a quantitative star rating.

This article was compiled by Bella Albrecht, edited by Lauren Solberg, and reviewed by Andrew Willis.

This article was generated with the help of automation and reviewed by Morningstar editors.