Dividend-paying stocks that combine healthy balance sheets with hefty yields can provide investors with steady incomes, cushion against market downturns, and grow investments at a healthy clip.
In the second quarter of 2026, the top-performing dividend-payers included life insurance company Great-West Lifeco GWO, diversified bank BMO Financial Group BMO, and diversified bank TD Bank Group TD.
To find the quarter’s 10 best-performing income-focused stocks, we screened the Morningstar Canada Index—which measures the performance of Canada’s broad regional markets, targeting the top 97% of stocks by market capitalization—for companies with a forward dividend yield of at least 1.5%, excluding real estate investment trusts.
The Best-Performing Canadian Dividend Stocks of Q2
- Great-West Lifeco GWO
- BMO Financial Group BMO
- TD Bank Group TD
- Power Corporation of Canada POW
- Royal Bank of Canada RY
- Scotiabank BNS
- Sun Life Financial SLF
- Industrial Alliance Insurance and Financial Services IAG
- Exchange Income EIF
- Russel Metals RUS
How Have Dividend Stocks Performed?
Over the past quarter, the Morningstar Canada Dividend Growth Index, which tracks Canadian stocks with a history of uninterrupted dividend growth and the capacity to sustain that growth, rose 9.47%. The Morningstar Canada Dividend Yield Focus Index, which tracks high-quality, dividend-paying Canadian stocks, gained 9.06%. In the 12 months leading up to June 30, the Dividend Growth Index gained 39.09%, while the Dividend Yield Focus Index gained 27.87%. The overall Canadian stock market, as measured by the Morningstar Canada Index, gained 7.16% on the quarter and 33.14% on the year.
Yields and Metrics for Q2’s Best-Performing Dividend Stocks
Great-West Lifeco
Life insurance company Great-West gained 39.88% in the quarter and climbed 79.44% over the past 12 months. The stock’s C$90.37 price gives it a forward dividend yield of 2.83%. Great-West pays investors an annual dividend of C$2.56 per share. With a fair value estimate of C$51 per share and no economic moat, the stock is 77% overvalued and has a Morningstar Rating of 1 star.
BMO Financial Group
Diversified bank BMO climbed 34.13% in the quarter and 70.48% over the past 12 months. At C$250.67, its stock has a forward dividend yield of 2.73% and an annual dividend of C$6.84 per share. The stock, which has a narrow economic moat, is trading at a 27% premium to its fair value estimate of C$197 per share. It has a Morningstar Rating of 2 stars.
TD Bank Group
Diversified bank TD Bank gained 33.77% in the second quarter and climbed 76.42% over the past 12 months. The stock’s C$172.44 price gives it a forward dividend yield of 2.6%. TD Bank pays investors an annual dividend of C$4.48 per share. With a fair value estimate of C$136 per share and a wide economic moat, the stock is 27% overvalued and has a Morningstar Rating of 2 stars.
Power Corporation of Canada
Life insurance company Power Corporation climbed 33.03% in the second quarter and rose 71.05% over the past 12 months. At C$88.42, its stock has a forward dividend yield of 3.02% and an annual dividend of C$2.67 per share. The stock, which has no economic moat, is trading at a 52% premium to its fair value estimate of C$58 per share. It has a Morningstar Rating of 1 star.
Royal Bank of Canada
Royal Bank gained 31.32% in the second quarter and climbed 67.18% over the past 12 months. The stock’s C$293.68 price gives it a forward dividend yield of 2.4%. Royal Bank pays investors an annual dividend of C$7.04 per share. With a fair value estimate of C$235 per share and a wide economic moat, the stock is 25% overvalued and has a Morningstar Rating of 2 stars.
Scotiabank
Diversified bank Scotiabank rose 28.92% in the second quarter and gained 69.55% over the past 12 months. Trading at C$123.27, its stock has a forward dividend yield of 3.7%. Scotiabank pays investors an annual dividend of C$4.56 per share. The stock, which has a narrow economic moat, is currently trading at a 19% premium to its fair value estimate of C$104 per share, leaving it with a Morningstar Rating of 2 stars.
Sun Life Financial
Diversified insurance firm Sun Life gained 28.87% in the second quarter and climbed 26.95% over the past 12 months. The stock’s C$111.35 price gives it a forward dividend yield of 3.3%. Sun Life pays investors an annual dividend of C$3.68 per share. With a fair value estimate of C$78 per share and no economic moat, the stock is 43% overvalued and has a Morningstar Rating of 1 star.
Industrial Alliance Insurance and Financial Services
Diversified insurance firm Industrial Alliance climbed 27.56% in the second quarter and rose 33.90% over the past 12 months. At C$195.83, its stock has a forward dividend yield of 2.08% and an annual dividend of C$4.07 per share. It has a quantitative Morningstar Rating of 3 stars.
Exchange Income
Airline Exchange Income rose 27.41% in the second quarter and gained 115.26% over the past 12 months. Trading at C$132.31, its stock has a forward dividend yield of 2.09%. Exchange Income pays investors an annual dividend of C$2.76 per share. The stock has a quantitative Morningstar Rating of 2 stars.
Russel Metals
Industrial distributor Russel gained 26.23% in the second quarter and climbed 41.12% over the past 12 months. The stock’s C$60.15 price gives it a forward dividend yield of 2.93%. Russel pays investors an annual dividend of C$1.76 per share. The stock has a quantitative Morningstar Rating of 3 stars.
The Best Dividend Stock Leaders: More Ideas to Consider
Investors who would like to find more top-performing or cheap dividend stocks can do the following:
- Use our Morningstar Stock Screener tool to find the best dividend stocks according to your specific criteria. You can search for stocks based on their dividend yields, valuation measures like price/earnings ratios, and more.
- Review the full list of dividend stocks included in the Morningstar Canada Dividend Yield Focus Index. Those dividend stocks with Morningstar Ratings of 4 or 5 stars are undervalued, according to our metrics.
- When it comes to buying stocks, it’s more than just dividends. Read here how valuations and competitive advantages—known as economic moats—matter when it comes to a stock’s potential for outperformance.
- Read Morningstar’s Guide to Stock Investing to learn how our approach to investing can inform your stock-picking process.
Companies not formally covered by a Morningstar analyst are statistically matched to analyst-rated companies, allowing our models to calculate a quantitative star rating.
