As we enter 2025, the Canadian market is navigating a landscape marked by political changes and fluctuating bond yields, which have influenced stock valuations across various sectors. Amid these dynamics, dividend stocks on the TSX offer a compelling option for investors seeking stability and income, as they often provide consistent returns even in uncertain times.

Top 10 Dividend Stocks In Canada

Click here to see the full list of 26 stocks from our Top TSX Dividend Stocks screener.

Here's a peek at a few of the choices from the screener.

Canadian Natural Resources

Simply Wall St Dividend Rating: ★★★★★☆

Overview: Canadian Natural Resources Limited engages in the acquisition, exploration, development, production, marketing, and sale of crude oil, natural gas, and natural gas liquids (NGLs) with a market cap of CA$96.62 billion.

Operations: Canadian Natural Resources Limited generates revenue from several segments, including CA$16.30 billion from Oil Sands Mining and Upgrading, CA$17.21 billion from Exploration and Production in North America, CA$0.54 billion from Exploration and Production in the North Sea, CA$0.56 billion from Exploration and Production Offshore Africa, and CA$0.94 billion from Midstream and Refining activities.

Dividend Yield: 4.6%

Canadian Natural Resources offers a stable dividend with a yield of 4.64%, supported by a payout ratio of 58.4% and strong cash flow coverage at 46.2%. Despite trading below its estimated fair value, its dividend yield is lower than the top quartile in Canada. Recent acquisitions from Chevron Canada are expected to enhance free cash flow and production, potentially supporting future dividends. The company also issued new debt to finance these acquisitions, impacting financial flexibility.

• Navigate through the intricacies of Canadian Natural Resources with our comprehensive dividend report here.
• In light of our recent valuation report, it seems possible that Canadian Natural Resources is trading behind its estimated value.

Extendicare

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Extendicare Inc. operates through its subsidiaries to provide care and services for seniors in Canada, with a market cap of CA$860.54 million.

Operations: Extendicare Inc. generates revenue through its Long-Term Care segment at CA$808.94 million, Home Health Care at CA$545.46 million, and Managed Services at CA$70.43 million.

Dividend Yield: 4.7%

Extendicare provides a stable dividend yield of 4.66%, though it's lower than Canada's top quartile. The payout is well-covered by earnings (63.3%) and cash flows (41.5%), despite high debt levels. Dividends have been consistent but not growing over the past decade, with recent affirmations maintaining CAD 0.04 per share monthly payouts. Earnings grew significantly, with net income reaching CAD 55.28 million for the first nine months of 2024, indicating potential stability in future dividends amidst financial restructuring efforts.

• Click here and access our complete dividend analysis report to understand the dynamics of Extendicare.
• Insights from our recent valuation report point to the potential overvaluation of Extendicare shares in the market.

IGM Financial

Simply Wall St Dividend Rating: ★★★★★☆

Overview: IGM Financial Inc. is a Canadian wealth and asset management company with a market cap of CA$10.38 billion.

Operations: IGM Financial Inc.'s revenue is derived from its Asset Management segment, generating CA$1.23 billion, and its Wealth Management segment, contributing CA$2.35 billion.

Dividend Yield: 5.2%

IGM Financial offers a stable dividend yield of 5.16%, supported by earnings and cash flows with payout ratios around 60%. Although below Canada's top quartile, dividends have been reliable and growing over the past decade. The company trades at a significant discount to its estimated fair value, suggesting potential for capital appreciation. Recent buyback announcements indicate strategic capital management, while consistent revenue growth reflects operational strength despite slight declines in net income year-over-year.

• Click here to discover the nuances of IGM Financial with our detailed analytical dividend report.
• Insights from our recent valuation report point to the potential undervaluation of IGM Financial shares in the market.

Seize The Opportunity

• Reveal the 26 hidden gems among our Top TSX Dividend Stocks screener with a single click here.
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Looking For Alternative Opportunities?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
• Find companies with promising cash flow potential yet trading below their fair value.

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:IGM.

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