You’re looking for three key advantages:
- They must provide steady and dependable cash flow with a decent yield (minimum 3%).
- The company should be committed to regular dividend increases.
- The stock should have capital gains potential.
When all three combine, the total return can be impressive. Here are the top total return performers for 2024, chosen from securities on our recommended list that trade on the TSX. Returns are to Dec. 12.
Capital Power Corp. (TSX: CPX). The utilities sector staged a major turnaround in 2024, fueled by the rapid decline in interest rates in the second half of the year. CPX was one of the best performers, with the shares rising $24.76, or 65.3%. The Edmonton-based utility has increased its dividend five times since 2020 and now pays $0.65 a quarter ($2.80 a year) to yield 4.2%. The total return year-to-date has been $27.56, or 72.9%.
Manulife Financial Corp. (TSX, NYSE: MFC). Canada’s biggest insurer has always been a steady divided payer, but it was precluded from increasing its payout during the pandemic along with all other financial institutions. It’s made up for that since, increasing the dividend by 18% in late 2021, 12% in 2022, and 8% in 2024, to its current level of $0.40 per quarter for a yield of 3.6%. The stock has gained $14.96 a share this year. Add the dividend to that and our profit for 2024 is $16.56, or 56.9%, based on the Jan. 2 opening price.
CIBC (TSX, NYSE: CM). It was a good year for banks, with several of the Big Six posting impressive total returns. CIBC was one of the best performers, with the stock rising 48.3%, to $94.20. The bank has increased its dividend five times since the freeze was lifted in the fall of 2021 and now pays $0.90 per quarter ($3.60 a year) to yield 3.8%. Combined with a capital gain of $30.67 on the share price, the total return for 2024 is 53.9%.
TC Energy Corp. (TSX, NYSE: TRP). It’s been a good year for pipeline companies, and falling interest rates were a bonus. TRP stock is up $18.30 for the year, a gain of 39.6%. We will have received $3.52 in dividends by the end of the month for a total return of 46.1%.
Keyera Corp. (TSX: KEY). Keyera has steadily raised its dividend over time. The latest bump was a hike of 4%, to $0.52 per quarter, effective with the September payment. The shares benefitted from the continued strong performance in the energy sector to gain $10.71 for the year, for a total return of 39.8%.
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