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As the Canadian market navigates through a period of economic assessment and strategic portfolio development, investors are increasingly focused on dividend stocks for their potential to provide steady income amidst fluctuating conditions. In this environment, identifying strong dividend stocks involves evaluating companies with solid fundamentals and a consistent track record of returning value to shareholders.
Overview: Canadian Natural Resources Limited is involved in acquiring, exploring, developing, producing, marketing, and selling crude oil, natural gas, and natural gas liquids with a market cap of approximately CA$94.50 billion.
Operations: Canadian Natural Resources Limited generates revenue from several segments, including Oil Sands Mining and Upgrading (CA$16.30 billion), Exploration and Production - North America (CA$17.21 billion), Midstream and Refining (CA$937 million), Exploration and Production - North Sea (CA$537 million), and Exploration and Production - Offshore Africa (CA$557 million).
Dividend Yield: 4.8%
Canadian Natural Resources has recently increased its quarterly dividend by 7% to C$0.5625 per share, reflecting a commitment to returning value to shareholders. The company's dividend is well-covered by both earnings and cash flows, with payout ratios of 58.4% and 45.6%, respectively, indicating sustainability. Although the dividend yield of 4.78% is below the top quartile in Canada, it remains reliable and stable over a decade, supported by recent acquisitions that enhance cash flow potential.
Overview: Extendicare Inc., with a market cap of CA$848.86 million, operates through its subsidiaries to provide care and services for seniors in Canada.
Operations: Extendicare Inc.'s revenue is derived from three main segments: Long-Term Care (CA$808.94 million), Home Health Care (CA$545.46 million), and Managed Services (CA$70.43 million).
Dividend Yield: 4.7%
Extendicare's dividend yield of 4.72% is below the Canadian top quartile, with payments covered by earnings (63.3%) and cash flows (41.5%), ensuring sustainability despite a high debt level. Dividends have been stable but not growing over the past decade, with recent affirmations of CAD 0.04 per share monthly dividends through December 2024. Earnings growth has been robust, yet dividend reliability remains a concern due to historical volatility and lack of growth.
Overview: Total Energy Services Inc. is an energy services company operating in Canada, the United States, and Australia with a market cap of CA$448.79 million.
Operations: Total Energy Services Inc. generates its revenue from four main segments: Well Servicing (CA$91.14 million), Contract Drilling Services (CA$310.43 million), Compression and Process Services (CA$392.99 million), and Rentals and Transportation Services (CA$79.16 million).
Dividend Yield: 3%
Total Energy Services offers a low dividend yield of 3.05%, underperforming compared to Canada's top quartile, but maintains strong coverage with a payout ratio of 32.3% and cash payout at 14.2%. Despite past volatility in dividends, recent affirmations include a CAD 0.09 quarterly payment for December 2024. The company is actively pursuing M&A opportunities while executing share buybacks, having repurchased approximately 4.7% of its issued capital recently, indicating strategic financial management and shareholder returns focus.
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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:CNQ TSX:EXE and TSX:TOT.
