K-Bro Linen and Two Other TSX Dividend Stocks to Consider

As the first half of 2024 draws to a close, Canadian markets have shown resilience and posted solid gains, benefiting from the overall positive momentum seen in global equity indices and economic optimism. This provides a favourable backdrop for investors considering dividend stocks, which can offer both stability and income potential in a thriving economic environment. In light of current market conditions, focusing on dividend stocks may be a prudent strategy for those looking to capture stable returns amid continued market gains.

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 in our TSX Top Dividend Stocks Analysis tool.

We will look at a selection of our selection results.

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

Preview: K-Bro Linen Inc. operates in Canada and the United Kingdom, providing laundry and linen services primarily to healthcare facilities, hotels and other commercial organizations, with a market capitalization of approximately C$348.03 million.

Operations: K-Bro Linen Inc. generates CA$330.33 million in revenue from its laundry and linen services to the healthcare and hospitality industries.

Dividend yield: 3.5%

K-Bro Linen, while not a top dividend payer with a yield of 3.6%, offers consistent dividends, supported by a stable payout ratio of 73.2% and cash flow coverage of 38.5%. Recent activities include the reaffirmation of monthly dividends and a share buyback program, signaling confidence in financial stability. Despite a slight decline in earnings to CAD 1.81 million in the first quarter of 2024 from CAD 2 million in the prior year, the company’s strategic buybacks and consistent dividend payments reflect a balanced approach to shareholder returns and capital management.

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

Preview: Royal Bank of Canada is a diversified financial services company with global operations and a market capitalization of approximately C$207.77 billion.

Operations: Royal Bank of Canada generates its revenues from several key segments: Personal and Commercial Banking (C$20.92 billion), Wealth Management (C$17.47 billion), Capital Markets (C$10.70 billion) and Insurance (C$5.91 billion).

Dividend yield: 3.8%

Royal Bank of Canada, with a modest dividend yield of 3.86%, sits below the top quartile of the Canadian market but has maintained a stable payout history over the past decade. Its dividends are well covered by earnings, as evidenced by a current payout ratio of 50% and a projected rate of 48.2% in three years. Recent financial results show robust growth with earnings up 9.3% last year and projections for continued expansion of 3.55% per year, supporting future dividend reliability despite its lower yield position relative to its peers.

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

Preview: Suncor Energy Inc. is an integrated energy company with operations in Canada, the United States and internationally, with a market capitalization of C$67.91 billion.

Operations: Suncor Energy’s revenue sources include C$23.76 billion from oil sands, C$31.51 billion from refining and marketing, and C$2.17 billion from exploration and production.

Dividend yield: 4.1%

Suncor Energy has displayed a mix of strengths and weaknesses as a dividend stock. Recent performance points to increased oil sands and refinery production, suggesting operational growth. However, its dividend has been historically volatile, with recent confirmations maintaining a quarterly payout of CAD$0.545 amid mixed shareholder sentiment on the company’s policies. With trading below estimated fair value and dividends well covered by earnings and cash flow (35% payout ratio), the outlook is cautiously optimistic despite expectations of lower earnings over the next three years.

Key points to remember

• Unlock our complete list of the 33 best dividend stocks on the TSX by clicking here.
• Got an interest in these stocks? Improve the way you manage them using the Simply Wall St portfolio, where intuitive tools await to help you optimize your investment results.
• Discover a world of investment opportunities with the free Simply Wall St app and access unmatched stock analysis across all markets.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to constitute financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. Our goal is to provide you with focused, long-term analysis based on fundamental data. Please note that our analysis may not factor in the latest price-sensitive company announcements or qualitative information. Simply Wall St has no position in any of the stocks mentioned.

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