In this article, we will take a detailed look at the13 High-Growth Canadian Dividend Stocks To Invest In. For a quick overview of such stocks, read our article 5 High-Growth Canadian Dividend Stocks To Invest In.
Dividend investing took a backseat in 2023 as an unending optimism prevailed the market thanks to the AI-led rally that kept buoying tech stocks higher and higher, defying recession forecasts and inflation-related worries. But can the 2023 rally continue through 2024? US Bank in its 2024 outlook report titled "The Year of It Ain’t Over ’til it’s Over" said that its experts forecast slower growth at least during the first half of 2024 as consumer savings dissipate and effects of rate hikes become visible.
"Inflation, interest rates and earnings are interrelated keys to equity price movements, with inflation levels persisting above the Fed’s price stability target entrenching a period of higher interest rates. Higher interest rates increase competition from bond investments, which pressures valuation measures such as the price-to-earnings ratio (the share price equity investors are willing to pay for realized or future earnings). Additional cautionary factors likely to weigh on equity returns in the new year include narrow equity sector performance leadership in 2023, the potential for economic and corporate earnings pressures to emerge in 2024, already-elevated prices of technology- related companies and geopolitical issues including ongoing conflicts between Russia/Ukraine and Israel/Hamas as well as tensions between the U.S. and China."
The Pendulum is Swinging in Favor of Dividend Stocks
The latest inflation report showed the Fed's long battle against inflation might not be over after all and we are not out of the woods yet. Geopolitical risks, diminishing household savings and persistent inflation have made dividend stocks like The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) relevant again. Matt Powers, managing partner at Powers Advisory Group, said in a program on CNBC earlier this month that the "pendulum is swinging" in favor of dividend stocks as he advised investors to load up on dividend-paying companies with a strong history of dividend growth.
Methodology For this article used manual research and stock screeners to pick Canadian dividend stocks with high sales growth reported over the past five years and in the most recent quarters. With each stock we have mentioned hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
13 High-Growth Canadian Dividend Stocks To Invest In
With over 2% dividend yield and high revenue growth, Vox Royalty Corp (NASDAQ:VOXR) ranks 13th in our list of the high-growth Canadian dividend stocks to invest in.
As of the end of the third quarter of 2023, five hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Vox Royalty Corp (NASDAQ:VOXR).
Centerra Gold Inc. (NYSE:CGAU) ranks 12th in our list of the high-growth Canadian dividend stocks. In November, Desjardins started covering the stock with a Buy rating and a C$12 price target. The financial service company praised Centerra Gold Inc's (NYSE:CGAU) strong cash flow.
As of the end of the third quarter of 2023, 10 hedge funds out of the 910 hedge funds tracked by Insider Monkey had stakes in Centerra Gold Inc. (NYSE:CGAU). The biggest hedge fund stakeholder of Centerra Gold Inc. (NYSE:CGAU) during this period was Ryan Schedler and Bradley Shisler's Condire Investors which owns a $46 million stake in Centerra Gold Inc. (NYSE:CGAU).
“Early last year, we highlighted Centerra Gold Inc. (NYSE:CGAU), a producer of gold and copper. With the recent pivot by the Federal Reserve to an easy money policy, we thought an update of this underappreciated hard asset was timely.
Centerra continues to make progress in increasing production while lowering costs. During the third quarter, the Oksut mine restarted, resulting in earnings per share of $0.20 while throwing off cash flow in excess of $100 million. Centerra remains debt free with cash soaring to $492 million, or $2.28 per share. A new management team is focused on optimizing a diverse portfolio of assets, including a strategy to boost the value of its molybdenum business for eventual sale. With an admirable balance sheet, Centerra has the resources to fund an aggressive exploration program in North America, pay a 3.3% dividend, and embark on an 8.5% repurchase of shares outstanding.
Trading below stated book value, approximately 60% of NAV, and less than 3X EV/EBITDA, we believe Centerra remains an outstanding small cap value.”
With a dividend yield of 6.8% as of January 11, Bank of Nova Scotia (NYSE:BNS) is a notable dividend stock. Over the past decade, Bank of Nova Scotia (NYSE:BNS) has increased its dividend at a CAGR of 5.75%.
In November Bank of Nova Scotia (NYSE:BNS) posted fiscal Q4 results. Adjusted EPS in the quarter came in at C$1.26. Revenue in the period jumped 8.9% year over year to C$8.31 billion.
Like BNS, hedge funds are also loading up on The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP).
Canadian insurance company Manulife Financial Corp (NYSE:MFC) has a dividend yield of about 5% as of January 11. Manulife Financial Corp (NYSE:MFC) posted a strong third quarter in November thanks to strong growth from Asia segment and positive results from Global Wealth and Asset Management division.
As of the end of the third quarter of 2023, 13 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Manulife Financial Corp (NYSE:MFC). The most significant stakeholder of Manulife Financial Corp (NYSE:MFC) during this period was Joseph Sirdevan's Galibier Capital Management which owns a $37.4 million stake in Manulife Financial Corp (NYSE:MFC).
Toronto-Dominion Bank (NYSE:TD) is a high-yield dividend stock. The stock's dividend yield is over 4.8% as of January 11. In November, Toronto-Dominion Bank (NYSE:TD) increased its dividend by 6.3%.
As of the end of the third quarter of 2023, 14 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Toronto-Dominion Bank (NYSE:TD). The most notable hedge fund stakeholder of Toronto-Dominion Bank (NYSE:TD) was Joseph Sirdevan's Galibier Capital Management which owns a $28 million stake in Toronto-Dominion Bank (NYSE:TD).
Enterprise software company Open Text Corp (NASDAQ:OTEX) shares have gained about 31% over the past one year. In November Open Text Corp (NASDAQ:OTEX) declared a quarterly dividend of $0.25 per share. Forward dividend yield came in at 2.9%. The dividend was payable on December 20.
As of the end of the third quarter of 2023, 16 hedge funds tracked by Insider Monkey had stakes in Open Text Corp (NASDAQ:OTEX). The most notable hedge fund stakeholder of Open Text Corp (NASDAQ:OTEX) during this period was Natixis Global Asset Management's Harris Associates which owns a $404 million stake in Open Text Corp (NASDAQ:OTEX).
FPA Crescent Fund made the following comment about Open Text Corporation (NASDAQ:OTEX) in its Q2 2023 investor letter:
“Open Text Corporation (NASDAQ:OTEX)t was a relatively short-lived holding in comparison to our typical time frame. We were attracted to this Canadian-based provider of enterprise software due to its stable revenue stream. More than 80% of Open Text’s revenue was recurring, which helped deliver attractive mid-30s EBITDA margins. We considered the business to have a sticky customer base that included 97 of the 100 largest companies in the world. Purchased at a low double-digit multiple to after-tax free cash flow, we expected to own the company for years, with capital deployment going towards dividends, buybacks, and small bolt-on acquisitions, as it had in the past. Unfortunately, to our surprise, while we owned the stock, Open Text announced a relatively large acquisition in the form of UK-based Micro Focus. Familiar with the target, we were unenthused about both the asset and increased debt on the balance sheet from funding the purchase, so we chose to exit stage left rather than try to re-write our investment thesis.”
With a dividend yield of 5.8% and high revenue growth, Canadian Imperial Bank of Commerce (NYSE:CM) ranks 7th in our list of the high-growth Canadian dividend stocks to buy now. In November, Canadian Imperial Bank of Commerce (NYSE:CM) upped its dividend by 3.4%.
During the same month Canadian Imperial Bank of Commerce (NYSE:CM) posted fiscal fourth quarter results. Adjusted EPS in the period came in at C$1.57. Revenue in the quarter jumped 8.3% year over year to C$5.84 billion.
Canadian-based mining company B2Gold Corp (NYSE:BTG) is among the high-yield dividend stocks popular among hedge funds. A total of 19 hedge funds tracked by Insider Monkey reported having stakes in B2Gold Corp (NYSE:BTG). The biggest hedge fund stakeholder of B2Gold Corp (NYSE:BTG) was John Overdeck and David Siegel's Two Sigma Advisors which owns a $34.3 million stake in B2Gold Corp (NYSE:BTG). In addition to BTG, hedge funds are also piling into The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP).
