Investing in Canadian dividend stocks has been a great way to build wealth and the Globe’s Dividend All-Stars provides a guide to the largest 200 on the Toronto Stock Exchange. It includes a plethora of data on each stock along with a star rating. The top 20 get a full five out of five stars and a spot in the Dividend All-Stars portfolio.
We’re pleased to say the portfolio handily beat the market since its last update with gains of 41.4 per cent from Feb. 13, 2025, through to Feb. 12, 2026, while the S&P/TSX Composite Index advanced by 29.7 per cent.
Since arriving at The Globe and Mail, the portfolio gained 83.0 per cent from Feb. 15, 2024, through to Feb. 12, 2026 – assuming it was updated each year when the new team was selected – while the market index trailed with gains of 61.7 per cent.
(The raw data used herein largely comes from Bloomberg and is supplemented by data from S&P Global Market Intelligence. The returns include reinvested dividends, but not fund fees, commissions or other trading costs. The portfolio is equally weighted.)
Star spotting
We weigh up the merits of each Canadian dividend stock by focusing on three primary criteria, beginning with its yield, proceeding to its potential as a value investment, and concluding with measures of safety and stability. Our star system aims to identify stocks with generous yields trading at reasonable prices in improving trends.
We believe our system offers an objective view of the largest 200 dividend-paying stocks on the TSX. We skip over newly listed companies with less than 12 months of trading history and those without the robust data needed for a proper analysis. We also make an effort to avoid companies that are in the process of being taken over because they deserve specialized treatment.
Digging into dividends
We begin our analysis with each stock’s dividend yield and award more stars to stocks with generous yields. After all, dividend investors like to regularly receive tax-advantaged income.
We also reward companies that buy back their own shares and reduce their share counts over time – the idea being to keep track of the combined impact of share repurchases and share issuances. More specifically, higher grades go to stocks with generous buyback yields as measured by the percentage reduction in a company’s share count over the past four quarters. Naturally, we like to see a company’s shares outstanding decline, rather than grow, over time. (In a closely related concept, shareholder yield represents the combination of dividend and buyback yields.)
Value investors gravitate to companies that offer lots of value for a low price. We start with a classic measure of value in the form of the price-to-earnings ratio (P/E) and favour stocks with low positive ratios. Low-P/E stocks have fared quite well – as a group – over the long term. Similarly, we prefer to buy lots of cash flow from operations for a reasonable price and favour stocks with low positive price-to-cash-flow ratios (P/CF).
Our star system is reinforced with measures of safety. After all, if a company recently ran into trouble, it might appear to trade at a low P/E, or offer a high yield, before the weakness appears in its financial statements – or prompts a dividend cut.
We employ two measures in an effort to exclude problem cases. First, we favour stocks on the upswing with high returns over the past six months relative to their peers. The idea is to avoid stocks the market has suddenly soured on. Second, more stars are awarded to steady performers with modest volatilities over the prior 260 days that haven’t startled their shareholders in recent times.
All of our yield, value, and safety measures are combined to find the star rankings of the largest 200 dividend stocks on the TSX. The top 20 get a full five out of five stars and form the Dividend All-Stars portfolio.
Dividends for the long term
The recent growth of the All-Stars portfolio has been grand, but we also back-tested our star system to investigate its long-term performance. It gained an average of 16.2 per cent annually over the 26 years to the end of January, 2026, when an equal-dollar amount of money was put into each stock and the portfolio rebalanced monthly. In comparison, the market index climbed by an average of 8.1 per cent annually over the same period.
But investors can also take their time and update their portfolios less frequently because the Dividend All-Stars grew by an average of 14.2 per cent annually over the 26 years to the end of January, 2026, when rebalanced annually instead of monthly.
Adventures in the market
The Dividend All-Stars, and our star ratings, provide a good starting point for investors, but it is important to learn more about each company, its industry and the market before seeking your fortune.
Be aware of the strengths and weaknesses of numerical techniques, such as ours, because other factors can also affect success. For instance, the culture and character of a company’s people can make, or break, a business.
While we believe the Dividend All-Stars have what it takes to succeed, we expect the road to be bumpy, individual stocks to disappoint and the market to crash from time to time. We would be pleased to outperform the market index by an average of a few percentage points a year over the long term. (For the sake of disclosure, the author owns many of the stocks mentioned herein.)
Watch your step when considering stocks that trade infrequently, and those with very low share prices, because they may be difficult to deal with in a timely and cost-effective manner. But enjoy the adventure and we hope our system helps you narrow in on dividend payers that are worth adding to your portfolio.
The Team of Dividend All-Stars
The 20 stocks that offer the best combination of income, value and stability. Those marked with a * are returning members from last year’s team.
Algoma Central (ALC) is a marine transportation company. The shipper is a subsidiary of E-L Financial (ELF) based in St. Catharines, Ont. It trades at eight times trailing earnings, offers a 4-per-cent dividend yield, and recently boosted its quarterly dividend-per-share by 5.0 per cent.
*ATCO (ACO.X) is a sprawling utility-heavy conglomerate with global operations that makes its home in Calgary. The company offers a 3.4-per-cent dividend yield and a 7.6-per-cent earnings yield based on forward 12-month earnings estimates. ATCO recently boosted its quarterly dividend-per-share by 3 per cent.
Bank of Montreal (BMO) is the third largest of the Big Six Canadian banks by market capitalization. The Toronto-based company pays a 3.5-per-cent dividend yield and cut its share count by 2.8 per cent over the past four quarters to offer a shareholder yield of 6.3 per cent. It also raised its quarterly dividend-per-share by 5 per cent over the past year and by an average of 9.5 per cent annually over the past five years.
CIBC (CM) is the second smallest of the Big Six banks by market capitalization and makes its home in Toronto. It pays a dividend yield of 3.3 per cent and cut its share count by 1.7 per cent over the past four quarters to push its shareholder yield up to 5.0 per cent. It also raised its dividend-per-share by 10.3 per cent over the past year and by an annual average of 7.9 per cent over the past five years.
Cogeco (CGO) is a Canadian media and telecommunications company based in Montreal. (Its Cogeco Communications (CCA) subsidiary is also member of this year’s All-Star team.) It trades at six times trailing earnings and pays a 5.6-per-cent yield. Even better, the company increased its dividend-per-share by 7 per cent over the past year and by an average of 12.6 per cent annually over the past five years.
*Cogeco Communications (CCA) is a Canadian telecommunications company based in Montreal that operates domestically and in 13 U.S. states. It pays a 5.8-per-cent dividend yield and trades at eight times both trailing earnings and forward 12-month earnings estimates. Cogeco Communications boosted its quarterly dividend-per-share by 7 per cent over the past year and by an average of 9.1 per cent annually over the past five years.
Linamar (LNR) is an auto-parts maker based in Guelph, Ont. The company’s shares jumped 72 per cent over the past 12 months but still trade at less than eight times both trailing earnings and forward 12-month earnings estimates. Linamar also boosted its quarterly dividend-per-share by 16.0 per cent over the past year and by an average of 19.3 per cent a year over the past five years.
Magna International (MG) is the largest auto-parts maker on the TSX by market capitalization with operations across 28 countries. The company is headquartered in Aurora, Ont., and pays a 3.5-per-cent yield (in U.S. dollars) while trading at less than 10 times forward 12-month earnings estimates.
*Manulife Financial (MFC) provides insurance and wealth management to individuals and institutions. The Toronto-based company recently boosted its dividend-per-share by 10.2 per cent. It pays a 4-per-cent dividend yield, cut its share count by 2.8 per cent over the past four quarters, and sports a shareholder yield of 6.8 per cent.
*MCAN Mortgage (MKP) is a flow-through mortgage investment corporation based in Toronto that invests in residential mortgages in addition to construction and commercial loans. It pays a 7.1-per-cent dividend yield and grew its dividend-per-share by 5.1 per cent over the past 12 months.
Parex Resources (PXT) is an independent oil and gas exploration and production company that operates in Colombia and is headquartered in Calgary. Parex pays a dividend yield of 7.6 per cent and trades near seven times trailing earnings and nine times forward 12-month earnings estimates. While hegemonic political risks are a concern, its stock gained 60 per cent over the past 12 months.
*Power (POW) is a large financial conglomerate based in Montreal. It owns a 68.8-per-cent stake in Great-West Lifeco (GWO) and 62.5 per cent of IGM Financial (IGM), which also appear herein. Power trades for less than 0.9 times its adjusted net asset value, which includes the quarter-end market value of its publicly traded subsidiaries. It pays a 3.8 per cent dividend yield and grew its quarterly dividend-per-share by 8.9 per cent over the past year.
Quebecor (QBR.B) is an integrated communications company based in Montreal. The company pays a 2.7-per-cent dividend yield that is well covered by earnings and reduced its share count by 2.1 per cent over the past four quarters to push its shareholder yield up to 4.8 per cent. Quebecor also boosted its quarterly dividend-per-share by 7.7 per cent over the past year and by an annual average of 11.8 per cent over the past five years.
Rogers Communications (RCI.B) is a communications and entertainment company based in Toronto. It pays a 3.8-per-cent dividend yield and trades for less than 11 times forward 12-month earnings estimates. But its last dividend boost occurred in 2019.
Rogers Sugar (RSI) has its head office in Vancouver. The company pays a yield of 5.5 per cent, trades for less than 12 times trailing earnings, and is the least volatile team member this year. Mind you, dividend growth aficionados will be disappointed that it last raised its dividend in 2012.
Sagicor Financial (SFC) is a life and health insurance company with its headquarters in Barbados that operates in the Caribbean, U.S., and Canada. It offers a 4.1-per-cent dividend yield (paid in U.S. dollars) and cut its share count by 2.3 per cent over the past four quarters to boost its shareholder yield to 6.4 per cent. It trades near seven times expected 12-month earnings estimates.
*Suncor Energy (SU) is a large integrated oil and gas company based in Calgary with operations primarily in the U.S. and Canada. Suncor pays a dividend yield of 3.2 per cent and increased its quarterly dividend-per-share by 5.3 per cent over the past year. It also cut its share count by 4.1 per cent over the past four quarters, which boosts its shareholder yield to 7.3 per cent.
Total Energy Services (TOT) provides drilling equipment and services to customers in Canada, the U.S., and Australia. The company makes its home in Calgary and is the smallest team member this year with a market capitalization of $605-million. It pays a 2.4-per-cent dividend yield and reduced its share count by 3.4 per cent over the past four quarters to boost its shareholder yield to 5.8 per cent. It also grew its dividend-per-share by 11.1 per cent over the past year.
Vermilion Energy (VET) is a Calgary-based natural gas producer with operations in Canada and Europe. The company trades near nine times trailing earnings, pays a 3.8-per-cent yield, and cut its share count by 1.2 per cent over the past four quarters to nudge its shareholder yield up to 5 per cent.
Wajax (WJX) is an industrial products and services provider with locations across Canada that makes its home in Toronto. The company is one of the smallest team members this year with a market capitalization of $632-million. It pays a 4.9-per-cent dividend yield and trades at 10 times trailing earnings, but last boosted its dividend in 2024.
Norman Rothery, PhD, CFA, is the founder of StingyInvestor.com.
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