In a volatile market, many investors flock toward stable growth companies that pay quarterly dividends. Consistent cash flow in a portfolio enables further buying opportunities when equities are priced lower— an event such as now. Picking high-quality dividend stocks is a time-consuming task for many investors, primarily because there are many factors involved in identifying quality.
Fortunately, the research has been done for you. Here are the top ten Canadian dividend stocks for the fourth quarter.
The First Five
Toronto-Dominion Bank (TD)
FILE PHOTO: A Toronto-Dominion Bank (TD) sign is seen outside of a branch in Ottawa, Ontario, Canada, May 26, 2016. REUTERS/Chris Wattie/File Photo
Toronto-Dominion Bank is among the largest corporations to provide banking and financial services across Canada. As of now, TD Bank stock has a dividend yield of 4.1% and a payout ratio of only 41.7%. Additionally, TD Bank has grown its dividend by an average of 8.6% on an annualized basis in the past five years.
Royal Bank (RY)
FILE PHOTO: The Royal Bank of Canada (RBC) logo is seen outside of a branch in Ottawa, Ontario, Canada, February 14, 2019. REUTERS/Chris Wattie/File Photo
Royal Bank is the largest financial institution and banking services provider across Canada. Currently, Royal Bank shares offer a dividend yield of 4.1%, with a payout ratio of only 42.9% of earnings. Dividend growth has been consistent over the past five years, averaging an annualized growth rate of 6.9%.
Brookfield Asset Management (BAM)
Brookfield is one of the world’s largest asset management companies. The company briefly faced a slow period during 2020 which forced a temporary cut in the dividend per share. Despite this, the dividend has grown 5.9% over the past five years with a current yield of 1.3%, and a very low payout ratio of only 23.7%.
Power Corporation of Canada (POW)
Power Corporation of Canada is a management company that focuses on delivering financial services, primarily insurance and wealth management. The company has a strong dividend yield of 6.14% and a payout ratio of 50.5% of earnings. Additionally, annualized five-year dividend growth has been steady at nearly 7.4%
Canadian Pacific (CP)
FILE PHOTO: A Canadian Pacific Railway crew works on their train at the CP Rail yards in Calgary, Alberta, April 29, 2014. REUTERS/Todd Korol/File Photo
Canadian Pacific is one of two Canada’s largest railway companies that transports products across the entire country and the mid-eastern United States. The current dividend yield is only 0.78%, but the payout ratio is very low at 22%. However, the company has nearly doubled its dividend in the past five years (5:1 split-adjusted data), which may be appealing to investors who are looking for dividend growth.
The Next Five
Two similar companies on this list, Suncor (SU) and Canadian Natural Resources (CNQ), both have payout ratios below 30% while providing a dividend yield of over 3.9% each. However, CNQ has outpaced Suncor’s dividend hikes with a five-year annualized growth rate of 21.4%.
Canadian Utilities (CU), a subsidiary of ATCO, manages a large portfolio of power generation assets. The company narrowly made this list because of its payout ratio of 74.1%, but nonetheless meets the criteria. The current dividend yield is a staggering 5.14%, with a five-year annualized growth rate of 4.87%.
Canadian National Railway (CNR), which scores below Canadian Pacific for dividend growth, has seen 11.7% annualized growth on its dividend with a payout ratio of nearly 41%. The dividend yield of almost 1.9% is enticing given the stability.
Lastly, Great-West Lifeco (GWO) is a Canadian insurance provider with a steady dividend track record. The dividend, which yields over 6.6%, has grown 6.2% per year in the past five years. However, the payout ratio is 53.2%, which is higher than some other stocks on this list.
ABU DHABI, United Arab Emirates — Abu Dhabi will host the 12th edition of the Annual Investment Meeting from 8 to 10 May 2023, which will take place under the theme of “The Investment Paradigm Shift: Future Investment Opportunities to Foster Sustainable Economic Growth, Diversity, and Prosperity”.
At a press conference held today in Abu Dhabi, the announcement of the launch of AIM Global 2023 which is supported by the Ministry of Industry & Advanced Technologies, with the Abu Dhabi Department of Economic Development (ADDED) as a lead partner was made in the presence of H.E. Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, Vice Chairman of the UAE Industry Development Council and H.E. Mohamed Ali Al Shorafa, Chairman of ADDED.
AIM Global 2023 pillars will discuss the global capital market transformation, ways to improve the flexibility of global supply chains to benefit from growth opportunities, and the Fourth Industrial Revolution & AI technologies in the years to come.
AIM will also address new trends in the current global digital transformation that’s being experienced by developing & developed economies. AIM Global 2023 will feature many sessions & workshops that discuss vital topics, including Future Cities, how to use innovative technologies to address the increasing demands, the business sector’s ability to keep abreast of the fast changes, and the future role of Startups & SMEs.
H.E. Dr. Thani bin Ahmed Al Zeyoudi, lauded AIM’s ability to change its activities to keep abreast of the new changes in the global economy and praised AIM Global 2023’s gathering of all investment stakeholders in an effort to overcome the current obstacles to achieve sustainable economic development & prosperity for the world via several paths, including Digitization, Sustainability, Industrialization, and Free Trade.
H.E. Mohamed Ali Al Shorafa said: “We’re pleased to host AIM 2023 in Abu Dhabi, which has established its position as a preferred destination for business & investments due to its proactive, open approach in dealing with changes. AIM is a suitable platform to discuss new trends and ways to deal with changes and developments in the global economic landscape.”
AIM will comprise several features, including the Exhibition, Investment Roundtables, Investment Destinations Presentations, Investment Awards, Startups Awards, Investors Hub and G2G, G2B & B2B Meetings.
Artificial intelligence (AI) was seen as one of the top current investment priorities and was thought to continue to attract investment in the healthcare sector in the upcoming two years, according to GlobalData’s latest report ‘Digital Transformation and Emerging Technology in the Healthcare Industry – 2022 Edition’.
In this survey-based report tracker, digital media was prioritised as a top current investment target, with 53% of surveyed respondents confirming that their companies are currently investing in this technology. It was followed by AI, social media and big data (Figure 1). Compared with last year’s data, digital media saw the biggest increase in current investment, up by 22% from last year. AI (+9% from 2021), social media (+8%) and big data (+5%) have also gained since last year, besides trending as very popular technologies for investment priorities for several years. Their combined usage can release synergetic power and potential that could be disruptive to the healthcare sector.
While digital media was selected as the number one current investment target, the percentage of companies investing in this technology is expected to drop by 16% over the next two years. This would likely be due to the current inflation and rising costs, which contribute to a gloomy investment environment. In the next two years, the surveyed healthcare industry professionals believed that their companies will prioritise AI as the main investment target (figure 2).
Having topped the chart as the most attractive investment target since 2018, AI is a rather versatile technology that can be applied in a wide spectrum of processes in the pharmaceutical value chain, making processes faster and more efficient; eventually saving time and labour costs.
The technology has a multititle of applications; for example, companies like Exscientia are using AI to help their pharmaceutical clients analyse vast data sets to identify potential drug targets in a shorter time. K Health, in its AI-based telehealth app, is using AI and big data to help users access accurate information on their symptoms and connect with physicians; BioSymetrics is using AI and machine learning to provide a platform and models to help pharmaceutical companies to identify targets for drug discovery; while Bayer’s AI-enabled Calantic™ Digital Solutions platform, which combines AI with Cloud computing, is used to provide more structured tasks and more improved workflow, to ease workload and pressure for radiologists.
The new digital era has been driving the uptake of digital technologies. Technologies like AI are expected to bring disruptive power to and revolutionise processes within the healthcare sector. There has been an increasing number of successful AI-use cases in the healthcare industry that support a growing trust in AI. AI’s potential is substantial – not only limited to shortening the time and reducing cost in the drug discovery process, or providing healthcare professionals with faster and more accurate diagnoses.
TORONTO — The responsible investment industry is in the midst of a remarkable evolution, according to new data from the 2022 Canadian Responsible Investment (RI) Trends Report. Released today by Canada’s Responsible Investment Association (RIA), the report tracks the national trends and outlook for RI, which refers to investments that incorporate environmental, social, and corporate governance (ESG) issues into the selection and management process.
This year’s report confirms that RI’s recent momentum is giving way to demand for sophistication and more vigilant reporting, signaling a maturing industry. Over the past two years, the rush into RI claims has been met by forces both external and internal to the financial industry, including the reputational and legal risks associated with greenwashing and lack of clarity around ESG industry terminology and disclosure requirements.
With its updated methodology, the report affirms that RI is entrenched in Canada, with reported assets under management at $3 trillion, and 94% of respondents using ESG integration as an RI strategy. This marks the emergence of a reliable baseline for RI market share and demonstrates that ESG Integration is a fundamental tool in Canadian investors’ decision-making.
“Greater vigilance is redefining the ‘floor’ of RI assets under management. Increased clarity and alignment are necessary to shape the slope and raise the ceiling,” said Patricia Fletcher, CEO of the RIA. “RI is here to stay, but we have work to do with everyone in the investment ecosystem to get the next steps right in order to propel further growth.”
Growth expectations overall remain strong with 90% of respondents anticipating moderate to high levels of growth over the next two years. The demand for sophistication and vigilance is further reflected in investors’ future outlook, with respondents citing the top three potential deterrents to RI growth as: (1) mistrust or concerns about greenwashing, (2) a lack of standardized ESG disclosure frameworks/standards, and (3) lack of reliable data.
The report found an increase in the prevalence of all other RI strategies in addition to ESG integration, including corporate engagement, positive and negative screening, and thematic and impact investing, further pointing to the growing RI sophistication of Canadian investors. Respondents cited risk management as their top motivation for considering ESG factors.
Survey respondents reported the top three reasons for considering ESG factors are: (1) to minimize risk over time, (2) to improve returns over time, and (3) to fulfill fiduciary duty.
The three most prominent RI strategies by AUM are: (1) ESG Integration, (2) Corporate engagement & shareholder action, and (3) Negative/exclusionary screening.
Climate change is an overwhelming concern for responsible investors–-who also believe it is the greatest driver for growth over the next two years.
Quotes from 2022 Canadian RI Trends Report Partners:
“The evolution of responsible investing is a natural and expected process that is beneficial both to investors and the industry,” said Roger Beauchemin, President and CEO of Addenda Capital. “Several trends are helping to strengthen practices: investors’ growing appetite for data on environmental, social and governance (ESG) issues, pressure on companies to improve transparency, and industry efforts to define and meet standards in sustainable investing.”
“As the definition of responsible investing matures and the collective knowledge of our industry continues to increase, we are encouraged to see significantly more respondents turning to thematic approaches and to hear that a desire to address key issues like climate change will continue to drive growth over the next few years,” said Karrie Van Belle, Chief Marketing & Innovation Officer, AGF Investments Inc.
“We are incredibly proud of the progress that Canadian investors are making to deliver more transparency, a diversity of responsible investment solutions, and better client outcomes,” said Fate Saghir, SVP, Head of Sustainability, Mackenzie Investments. “This report reinforces Canada’s ambition to lead in the future low-carbon, equitable, and prosperous economy, and we at Mackenzie, are humbled to participate in this journey on behalf of our clients.”
“We are inspired by the level of attention investors are paying to climate factors. What’s more, the relatively low use of impact investing revealed by the report suggests there is untapped opportunity to leverage investment portfolios to reduce global carbon emissions,” said Adelaide Chiu, VP, Head of Responsible Investing & ESG Services. “We look forward to helping Canadians seize the opportunity to make an impact as they pursue their financial goals.”
“RBC Global Asset Management is proud to collaborate with the RIA Canada and support its efforts to build greater awareness of ESG trends and issues facing the investment community,” said Melanie Adams, Vice President and Head, Corporate Governance and Responsible Investment, RBC Global Asset Management. “Primary research, such as the 2022 Canadian Responsible Investment Trends Report, plays an important role in helping educate Canadian investors and advisors about responsible investment trends and sentiment.”
About the Canadian RI Trends Report The RIA publishes the Canadian Responsible Investment Trends Report to understand and assess the characteristics of responsible investment in Canada. This study was completed by Environics Research on behalf of the RIA. The results are based on input from organizations invited to participate in an online survey between August 2nd and September 29th, 2022 as well as desk research completed by the RIA. All figures are stated in Canadian dollars as at December 31st, 2021. The 2022 report was generously sponsored by Addenda Capital, AGF Management Limited, Mackenzie Investments, NEI investments, and RBC Global Asset Management.
About the Responsible Investment Association (RIA) The RIA is Canada’s industry association for responsible investment. The RIA’s membership includes asset managers, asset owners, advisors, and service providers who support its mandate of promoting responsible investment in Canada’s retail and institutional markets. RIA institutional members collectively manage more than $42 trillion in assets. Learn more at www.riacanada.ca.
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