Last year, though, dividend stocks returned to normalcy. The S&P/TSX Composite Dividend Index, a cap-weighted index of all 170-plus dividend-paying stocks in the S&P/TSX Composite Index, has a 2024 total return of 19.84%. Holding 92 stocks that have maintained or increased their dividends in each of the past five years has a return of 20.92%. Meanwhile, the benchmark S&P/TSX Composite Index’s total return was only slightly higher at 21.65%, despite its significantly higher risk profile.
This is somewhat of a vindication for Canadian investors who are sticking to their strategy of being income-focused. This gives them a chance to outperform in 2025. Their holdings will be generated regardless of the market price of the stock. Conversely, if the overall market continues to hit new highs, as it did in 2024, driven by falling interest rates, dividend stocks should capture most or all of the upside.
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Dividend Stocks to Own in 2025
Of course, we’re talking about general situations here. If you plan to hold stocks directly, the name of the stock you hold is important. That’s why MoneySense is back with an all-new 2025 list of the 100 Best Dividend Stocks in Canada.
This method does not make subjective judgments but relies solely on numbers. We selected 168 components of the S&P/TSX Composite Index that paid dividends as of November 30, 2024, and ranked them based on three criteria: yield, stability, and valuation.
To further narrow down investors’ choices, we’ve compiled a list of 10 stocks in Class A and Class B that have achieved the highest cumulative scores on all three criteria. We call the best of the best listed below our Canadian Dividend All-Stars.
One distinguishing feature of our 2025 A-share list is that, with the exception of tech stock Enghouse Systems, it is comprised of resource companies. Investment coach Aman Raina, founder of Sage Investors, compiles the data for the MoneySense Dividend List year after year. Rayner explains this oddity in terms of the shareholder value commodities producers currently generate relative to their market prices.
“Resource companies have performed well over the past year, with gold, silver and copper in particular showing strong gains in 2024. Oil prices have also risen,” Raina said. “As a result, these companies have been generating strong cash flows and higher returns on equity, giving them greater opportunity to pay dividends aggressively.”
While energy and materials remain dominant, our Class B list is more diverse this year, including industrials, financials and consumer discretionary. The Big Six banks are all hampered by slow growth and relatively high debt levels [Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC), National Bank of Canada (NA), Royal Bank of Canada (RBC), Scotiabank and Toronto-Dominion Bank (TD)] Or the three major telecommunications companies (Bell, Rogers, and Telus) even make the top 50 in our table. No real estate investment trusts or regulated utilities, or even any energy pipelines (the ones we usually think of when we think of dividend stocks), make the top 50.
