5 Canadian stocks paying the highest dividend in 2021

Summary

  • The Toronto Stock Exchange offers some high dividend-paying stocks.
  • Dividend stocks are often chosen by investors as they can offer passive income.
  • Only a handful of assets are considered to come close to the consistency of dividends in terms of passive income.

Investing in a stock market, with careful research, can help investors beat inflation if they make the correct investments and reap benefits from stocks. However, not every investor chooses to trade in stocks in the hopes of potential long-term gains. Some enter the equity markets for passive income.

Only a handful of assets are considered to come close to the consistency of dividends in terms of passive income. On that note, let’s look at five high dividend-paying stocks on the TSX.

1.     Fairfax Financial Holdings Limited (TSX:FFH)


The Toronto-based financial holding company is involved in investment management, property and casualty insurance through its subsidiaries. The company holds a market cap of C$ 14.9 billion, and pays an annual dividend of US$ 10 per unit to the shareholders.

In the second quarter of 2021, Fairfax’s net earnings attributable to shareholders increased to US$ 1.2 billion, up from US$ 434.9 million in Q2 2020.

FFH stocks have soared by about 38 per cent in the past year and jumped by 30.7 per cent year-to-date (YTD). At market close on Monday, August 9, FFH shares were priced at C$ 566.86 per share, 63.4 per cent higher than the 52-week low of C$ 346.84 on October 29, 2020.

2.     Canadian Tire Corporation Limited (TSX:CTC)


With a network of over 1,700 stores, Canadian Tire Corporation is one of the largest sellers of sporting equipment, automobile parts, vehicle fuel and home goods in Canada.

Outperforming the S&P TSX General Merchandise Stores Index, which declined by five per cent in the last three months, CTC stock climbed 1.4 per cent in the same period. It also catapulted by 62 per cent in the past year

In Q1 2021, Canadian Tire's consolidated retail sales increased by 13.1 per cent year-over-year to C$ 3.1 billion. Its diluted earnings per share were C$ 2.47 in the quarter, up by C$ 2.69 per share, as CTC stock had recorded a loss of C$ 0.22 per share in Q1 2020.

Canadian Tire distributes a quarterly dividend of C$ 1.175 per share and registers a dividend yield of 1.8 per cent. CTC shares were priced at C$ 262 apiece at the end of the trading session on August 9.

3.     Constellation Software Inc. (TSX:CSU)


The Canadian diversified software company, established in 1995, has become one of the largest tech companies in the world. Constellation Software has a presence in over 100 countries and serves at least 125,000 customers.

Since the last three years, Constellation Software has witnessed dividend growth at the rate of about 17 per cent. It pays a dividend of US$ 1 per unit to shareholders on a quarterly basis.

On August 3, CSU share reached a 52-week high of C$ 2,056.64. Its last closing price was C$ 2,031.81 on August 9.

CSU scrips returned six per cent to shareholders in the past month and about 16 per cent in the last three months.

4.     Canadian Imperial Bank Of Commerce (TSX:CM)


Serving approximately 11 million personal and commercial banking customers, this bank is among the top ones in Canada.

CM stock registers a dividend yield of about four per cent. Its shareholders are paid a quarterly dividend of C$ 1.46 per unit.

In the second quarter of 2021, CIBC's net income surged by 321 per cent YoY to C$ 1.7 billion. Its return on equity was 17.1 per cent.

In terms of stock performance, CM scrips grew by 30 per cent in the last six months.

5.     Royal Bank of Canada (TSX:RY)


The RBC, which is the biggest Canadian lender in terms of market capitalisation, recorded an average trading volume of 3.8 million in the last ten days.

RY stock was trading at a 52-week high of C$ 129.42 on August 6, dipping marginally to close at C$ 129.35 on August 9. Its last closing price was 42.5 per cent higher than the 52-week low of C$ 90.75 (October 29, 2020).

RY shares jumped three per cent quarter-to-date (QTD) and climbed 32.4 per cent in the last nine months.

The bank distributes a quarterly dividend of C$ 1.08 per unit.

In Q2 2021, the Royal Bank of Canada's net income stood at C$ 4 billion, which was an increase of C$ 2.5 billion YoY. As certain present restrictions do not allow the big six banks in Canada to increase their dividends, there are chances that the bank might be able to increase its dividends once the restrictions are lifted in the coming quarters.

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