As trade tensions ease and the Bank of Canada maintains a neutral stance on interest rates, the Canadian market is experiencing gains, providing a favorable environment for dividend stocks. In this context, selecting dividend stocks with strong fundamentals and consistent payout histories can offer investors potential stability and income amid evolving economic conditions.
Overview: National Bank of Canada offers a range of financial services to individuals, businesses, institutional clients, and governments both domestically and internationally, with a market cap of CA$48.90 billion.
Operations: National Bank of Canada's revenue segments include Wealth Management at CA$2.90 billion, Personal and Commercial at CA$4.30 billion, Financial Markets (Excluding USSF&I) at CA$3.22 billion, and U.S. Specialty Finance and International (USSF&I) at CA$1.30 billion.
Dividend Yield: 3.6%
National Bank of Canada offers a stable dividend with a payout ratio of 40.1%, suggesting dividends are well covered by earnings and forecasted to remain so at 44% in three years. Despite the dividend yield of 3.62% being lower than the top Canadian payers, it remains reliable and has grown over the past decade. Recent news highlights strategic moves, such as redeeming $125 million in debentures, aligning with regulatory capital management efforts.
Overview: Quebecor Inc. operates in the telecommunications, media, and sports and entertainment sectors in Canada, with a market cap of CA$8.89 billion.
Operations: Quebecor Inc.'s revenue is primarily derived from its telecommunications segment at CA$4.82 billion, followed by media at CA$698.80 million, and sports and entertainment contributing CA$228.30 million.
Dividend Yield: 3.6%
Quebecor's dividends are well-supported by a 40.1% payout ratio from earnings and a 36% cash payout ratio, indicating sustainability. The dividend yield stands at 3.59%, below the top Canadian payers but has shown consistent growth over the past decade. Despite high debt levels, Quebecor trades at a significant discount to estimated fair value, offering potential for capital appreciation alongside reliable dividends. Recent earnings show improved profitability with net income rising to C$190.7 million in Q1 2025.
Overview: Hemisphere Energy Corporation acquires, explores, develops, and produces petroleum and natural gas interests in Canada with a market cap of CA$166.47 million.
Operations: Hemisphere Energy Corporation generates revenue of CA$79.71 million from its petroleum and natural gas interests in Canada.
Dividend Yield: 9.1%
Hemisphere Energy's dividends are supported by a 29.6% payout ratio from earnings and a 62.7% cash payout ratio, suggesting sustainability. The company declared a special dividend of C$0.03 per share in addition to its quarterly base dividend, reflecting strong financial health. With a high dividend yield of 9.14%, Hemisphere is among the top Canadian payers despite only three years of consistent dividends, and it trades at an attractive value with a low price-to-earnings ratio of 5.1x.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include TSX:NA TSX:QBR.A and TSXV:HME.
This article was originally published by Simply Wall St.
