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 the second quarter of 2024, the top-performing dividend-payers included regional bank Canadian Western Bank CWB, gold company Pan American Silver PAAS, and renewable energy firm Innergex Renewable Energy INE.
To find the quarter'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 Q2 2024
- Canadian Western Bank CWB
- Pan American Silver PAAS
- Innergex Renewable Energy INE
- Goeasy GSY
- Primo Water PRMW
- Brookfield Corporation BEPC
- Boralex BLX
- Saputo SAP
- Centerra Gold CG
- Paramount Resources POU
How Have Dividend Stocks Performed?
Over the past quarter, 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, was roughly unchanged. The Morningstar Canada Dividend Yield Focus Index, which tracks the performance of high-quality, dividend-paying Canadian stocks, fell 2.6%. In the 12 months leading up to June 30, the dividend growth index gained 12.5% and the dividend yield focus index gained 0.8%.
The overall Canadian stock market, as measured by the Morningstar Canada Index, was roughly flat on the quarter, but has risen 13.3% on the year.
Yields and Metrics for Q2's Best-Performing Dividend Stocks
Canadian Western Bank
Regional bank Canadian Western Bank rose 55.1% in the second quarter and gained 81.0% over the past 12 months. Trading at C$43.38 per share, its stock has a forward dividend yield of 3.23%. Canadian Western Bank pays investors an annual dividend of C$1.40 per share. The stock has a quantitative Morningstar Rating of 3 stars.
Pan American Silver
Gold company Pan American Silver rose 33.8% in the second quarter and gained 43.7% over the past 12 months. At C$27.19 per share, its stock has a forward dividend yield of 2% and an annual dividend of C$0.54 per share. It has a quantitative Morningstar Rating of 3 stars.
Innergex Renewable Energy
Renewable energy firm Innergex Renewable Energy gained 29.2% in the second quarter and fell 12.7% over the past 12 months. The stock's C$10.23 price gives it a forward dividend yield of 3.52%. Innergex Renewable Energy pays investors an annual dividend of C$0.36 per share. The stock has a quantitative Morningstar Rating of 3 stars.
Goeasy
Credit services firm Goeasy rose 24.4% in the second quarter and gained 82.1% over the past 12 months. Trading at C$197.12 per share, Goeasy stock has a forward dividend yield of 2.37% and an annual dividend of C$4.68 per share. It has a quantitative Morningstar Rating of 3 stars.
Primo Water
Non-alcoholic beverages company Primo Water gained 21.8% in the second quarter and rose 82.9% over the past 12 months. Trading at C$29.90 per share, its forward dividend yield is 1.65%. Primo Water pays investors an annual dividend of C$0.49 per share. The stock, which has no economic moat, is trading at a 22% premium to its fair value estimate of C$24.60 per share, leaving it moderately overvalued. It has a Morningstar Rating of 2 stars.
Brookfield Corporation
Renewable energy firm Brookfield Corporation gained 18.1% in the second quarter and fell 2.7% over the past 12 months. At C$38.76 per share, Brookfield Corporation stock has a forward dividend yield of 5% and an annual dividend of C$1.95 per share. The stock, which has no economic moat, is trading near its fair value estimate of C$41 per share. It has a Morningstar Rating of 3 stars.
Boralex
Renewable energy firm Boralex rose 17.7% in the second quarter and lost 5.3% over the past 12 months. Trading at C$33.51 per share, Boralex stock has a forward dividend yield of 1.97% 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.
Saputo
Packaged foods company Saputo rose 16.0% in the second quarter and gained 6.0% over the past 12 months. Trading at C$30.72 per share, Saputo stock has a forward dividend yield of 2.41% and pays investors an annual dividend of C$0.74 per share. The stock, which has no economic moat, is currently trading at a 25% premium to its fair value estimate of C$24.50 per share, leaving it moderately overvalued, leaving it with a Morningstar Rating of 2 stars.
Centerra Gold
Gold company Centerra Gold gained 15.9% in the second quarter and rose 19.4% over the past 12 months. The stock's C$9.20 price gives it a forward dividend yield of 3.04%. Centerra Gold pays investors an annual dividend of C$0.28 per share. The stock has a quantitative Morningstar Rating of 4 stars.
Paramount Resources
Oil and gas exploration and production company Paramount Resources rose 14.6% in the second quarter and gained 13.3% over the past 12 months. At C$31.08 per share, Paramount Resources has a forward dividend yield of 5.79% and an annual dividend of C$0.60 per share. It has a quantitative Morningstar Rating of 4 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.
