Here is a breakdown of 10 excellent Canadian dividend-paying stocks, ranked by attractiveness for conservative portfolios, with all key metrics included.
1. Royal Bank of Canada (RY.TO
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Yield/Payout: 3.3–3.7%, Payout ~43–46%
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Valuation: P/E ~13.9×; P/B ~2.0×
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ROE: Industry standard ~12–14%
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Sharpe: ~1.1 (5‑yr)
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Pros: Big‑5 stability, dividend safety, modest valuation, strong risk-adjusted returns
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Cons: Growth tied to domestic economy; interest sensitivity
2. Toronto-Dominion Bank (TD.TO)
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Yield/Payout: 4.33–4.4%, Payout ~43% Valuation: P/E ~12.7×
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ROE: ~7.7% TTM (banks average higher) Sharpe: ~1.0
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Pros: High yield with strong dividend growth (12‑year streak), buyback-friendly
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Cons: Slightly lower ROE than closest peers
3. Canadian Pacific Kansas City (CP.TO)
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Yield/Payout: ~0.9%, payout ~20–30%
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Valuation: P/E ~18–20× (rail sector)
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ROE: ~20%+
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Sharpe: ~1.0
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Pros: High efficiency, strong earnings growth, low leverage vs equity
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Cons: Minimal income component, exposure to cyclical trade volumes
4. Manulife Financial (MFC.TO)
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Yield/Payout: ~3.8%, ~50–60% payout
Valuation: P/E ~10–12× typical for insurers
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ROE: Strong fiscal health (leverage ~23.9%)
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Sharpe: Very low risk-adjusted returns
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Pros: A-rated balance sheet, 11-year dividend hikes, Asian growth engine
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Cons: Underwhelming stock performance, sensitivity to credit/claims cycles
5. Fortis Inc. (FTS.TO)
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Yield/Payout: ~3.66–3.7%, payout ~73%
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Valuation: P/E ~19.6×, P/B ~1.2× typical for utilities
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ROE: 7.4%
Sharpe: ~0.55–0.66
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Pros: 51-year dividend increase streak, low volatility, inflation hedge
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Cons: Slow growth, regulated earnings
6. Pembina Pipeline (PPL.TO)
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Yield/Payout: ~5.3–5.5%, payout ~90%
Valuation: P/E ~16.8×
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ROE: ~11.6%
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Sharpe: ~0.35 (5‑yr), ~0.98 (1‑yr)
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Pros: Monthly cash flow, pipeline stability, covered dividends
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Cons: Commodity-linked cash flow; high payout
7. Enbridge (ENB.TO)
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Yield/Payout: ~5.7%, payout ~140–142% IFF earnings
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Valuation: P/E ~23.6×, ROE ~9.4%
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Sharpe: ~0.8
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Pros: 30-year dividend growth streak, fee-based contracts, secured backlog
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Cons: High accounting payout; exposure to regulatory, tariff risk
8. TC Energy (TRP.TO)
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Yield/Payout: ~4.9–5.1%, payout ~88–97%
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Valuation: P/E ~16×
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ROE: ~13% (midstream avg)
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Sharpe: Moderate risk-adjusted; 1-yr ~1.5, 5-yr ~0.36
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Pros: Asset expansion in Mexico, utilities diversification
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Cons: Capital intensity; marginal earnings coverage
9. Bank of Nova Scotia (BNS.TO)
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Yield/Payout: ~5.6–5.9%, payout ~89%
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Valuation: P/E ~15.5×
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ROE: ~7.9%
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Sharpe: ~0.5
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Pros: Best yield among Big‑5, international footprint
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Cons: High payout; lower profitability
10. BCE Inc. (BCE.TO)
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Yield/Payout: ~11–12%, payout astronomical (~600–900%+)
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Valuation: P/E ~71× trailing, forward ~10×
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ROE: ~15.5%
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Sharpe: Low due to financial leverage
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Pros: Highest yield, low beta (~0.6)
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Cons: Unsustainable high payout; reliance on debt, free cash flow issues
How I might use these in my Conservative Portfolio
50% Core (Stability & Yield)
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RY, TD (15% each): Diversified bank income & safety
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FTS (10%): Low-growth anchor
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CP (10%): Blue-chip growth with little volatility
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MFC (5%): Insurance diversification and balance sheet strength
30% Income Enhancers
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PPL (10%) & TRP (10%): Monthly/quarterly cash flow with pipeline leverage
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ENB (10%): Stable, price-consensus income with growth potential
15% Income Booster (Risk Aware)
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BNS (7.5%): Extra yield balancing banks
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BCE (7.5%): Ultra high yield play—only in small position, tightly monitored
5% Tactical Cash Reserve
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Hold as cash or government bonds to hedge volatility or deploy opportunistically
How This Works in a conservative portfolio
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Yield ~4–5%: Blended yield provides solid income with reliable coverage
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Diversification: Banks, insurers, utilities, pipelines, rail and telecom reduce correlation risk
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Valuation discipline: P/E focused on value vs growth; banks/utilities at ~12–20×, pipelines mid-teens
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Balanced volatility: Core holdings have Sharpe ~1; income enhancers moderate risk, tactical reserve cushions shocks
