TSI’s Scott Clayton has identified six Canadian dividend stocks offering high yields and share buyback programs too.
As you know, our proprietary Dividend Sustainability Rating System highlights companies with strong fundamentals, consistent cash flow, and exceptional yield potential in the Canadian market. That’s how you can be confident these industry leaders are well-positioned to thrive.
Our comprehensive analysis showcases standout companies across multiple economic sectors. These industry leaders include a major railway operator demonstrating its commitment to shareholders with a multi-billion dollar repurchase program and dividend increase. An oil and gas company continues to raise dividends while maintaining a significant buyback authorization. An agricultural inputs provider plans to continue its substantial stock repurchases alongside recent dividend hikes.
Finally, two of Canada’s largest banks are executing impressive share buyback plans while also increasing their dividend payouts. These firms represent attractive options for income-focused investors like you who are seeking both yield and capital appreciation.
Excerpt from theglobeandmail.com, March 27, 2025
What are we looking for?
Canadian dividend payers rewarding investors with share buybacks – a relatively risk-free gift from corporations facing tariff threats.
The screen
Montreal-based Canadian National Railway Co. is just one of the country’s large corporations continuing with stock buyback programs despite the brewing tariff dispute with the U.S. That $2.9 billion repurchase authorization is on top of CN raising its sustainable dividend by 5.0 per cent.
While the dividend hike is easily appreciated by most shareholders, the buyback also has the power to boost the company’s share price and the return for its shareholders. Specifically, a buyback of common shares, and their cancellation, means fewer shares are outstanding, which translates into higher per-share earnings and higher stock market interest. That, ultimately, lifts the share price.
It’s also worth noting that buyback programs can be halted if economic conditions worsen under tariffs. Clawing back a dividend, on the other hand, can hurt investor confidence and the stock price.
Our search started with a list of Canadian corporations with strong revenue and earnings outlooks and now rewarding shareholders with the double gift of buybacks and strong, sustainable dividends. In most cases, those income payments are also rising. We then applied our TSI Dividend Sustainability Rating System. It awards points to a stock based on key factors:
- One point for five years of continuous dividend payments – two points for more than five
- Two points if it has raised the payment in the past five years
- One point for management’s commitment to dividends
- One point for operating in non-cyclical industries
- One point for limited exposure to foreign currency rates and freedom from political interference
- Two points for a strong balance sheet, including manageable debt and adequate cash
- Two points for a long-term record of positive earnings and cash flow sufficient to cover dividend payments
- One point for an industry leader
Companies with 10 to 12 points have the most secure dividends, or the highest sustainability. Those with seven to nine points have above average sustainability; average sustainability, four to six points; and below average sustainability, one to three points.
6 Standout Canadian Stocks Delivering Buybacks and Dividend Growth
Our TSI Dividend Sustainability Rating System generated six stocks, including Canadian National Railway (with a 2.5% yield).
Calgary-based Imperial Oil Ltd. (2.8%) keeps raising its dividends – and continues to buy back shares under its current $2.4-billion authorization.
Nutrien Ltd. (4.3%), headquartered in Saskatoon, plans to continue its substantial stock repurchases (approximately $1.8 billion) this year, on top of its recent dividend hike.
Canadian Imperial Bank of Commerce (4.7%) and Toronto-Dominion Bank (4.8%), both based in Toronto, are in the midst of their own share buyback plans, roughly $1.6 billion and up to $8.6 billion, respectively. What’s more, each company increased its dividend payout early this year. And finally, leading Canadian insurer
Manulife Financial Corp. (4.0%), headquartered in Toronto, expects to repurchase as much as $2.3 billion of its stock this year. It also just raised its dividend.
We advise investors to do additional research on investments we identify here.
Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.
