Avoid Pine Cliff Energy On TSX For One Better Dividend Stock Option
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In the Canadian market, where the average dividend yield sits at around 3.5%, higher-yielding stocks can understandably catch the eye of investors looking for substantial income. However, caution is warranted as some high dividends may not be sustainable and could indicate underlying financial challenges within a company. This makes it crucial to assess the stability and reliability of a dividend before considering such investments.
Top 10 Dividend Stocks In Canada
| Name | Dividend Yield | Dividend Rating |
| Bank of Nova Scotia (TSX:BNS) | 6.81% | ★★★★★★ |
| Whitecap Resources (TSX:WCP) | 7.17% | ★★★★★★ |
| Enghouse Systems (TSX:ENGH) | 3.41% | ★★★★★☆ |
| Boston Pizza Royalties Income Fund (TSX:BPF.UN) | 8.42% | ★★★★★☆ |
| Secure Energy Services (TSX:SES) | 3.31% | ★★★★★☆ |
| Royal Bank of Canada (TSX:RY) | 3.81% | ★★★★★☆ |
| Russel Metals (TSX:RUS) | 4.56% | ★★★★★☆ |
| Canadian Natural Resources (TSX:CNQ) | 4.22% | ★★★★★☆ |
| Canadian Western Bank (TSX:CWB) | 3.18% | ★★★★★☆ |
| Firm Capital Mortgage Investment (TSX:FC) | 8.99% | ★★★★★☆ |
Click here to see the full list of 33 stocks from our Top TSX Dividend Stocks screener.
Below we spotlight one of our favorites from our exclusive screener and one you might the flick.
Top Pick
K-Bro Linen
Simply Wall St Dividend Rating: ★★★★★☆
Overview: K-Bro Linen Inc. operates in Canada and the United Kingdom, offering laundry and linen services primarily to healthcare institutions and hotels, with a market capitalization of approximately CA$348.03 million.
Operations: The company generates CA$330.33 million from its laundry and linen services provided to the healthcare and hospitality sectors.
Dividend Yield: 3.5%
K-Bro Linen Inc. has demonstrated a commitment to shareholder returns with consistent dividend payments, recently affirming a monthly distribution of 10 cents per share. The company supports these dividends through a sustainable payout ratio of 73.2% and a cash payout ratio of 38.5%, ensuring dividends are well-covered by both earnings and cash flow. Although its dividend yield of 3.6% is below the top Canadian payers, its stability and growth in distributions, coupled with an aggressive share buyback program that recently targeted up to 7.17% of issued shares for cancellation, highlight its prudent financial management in contrast to firms with unsustainable high yields.
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Click to explore a detailed breakdown of our findings in K-Bro Linen's dividend report.
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Upon reviewing our latest valuation report, K-Bro Linen's share price might be too pessimistic.
Dividend Trap
Pine Cliff Energy
Simply Wall St Dividend Rating: ★★☆☆☆☆
Overview: Pine Cliff Energy Ltd. is a company focused on the acquisition, exploration, development, and production of natural gas and crude oil in the Western Canadian Sedimentary Basin, with a market capitalization of approximately CA$365.05 million.