Dividend stocks aren’t as lucrative as Canadians might think – even with falling interest rates

Bank of Canada Governor Tiff Macklem holds a news conference at the Bank of Canada in Ottawa on Oct. 23. The BoC's recent rate cuts have made dividend stocks look enticing again to investors.finally began cutting its benchmark interest rate, including a half-percentage-point drop this week, and it’s making dividend stocks look enticing again. For many retail investors, the expectation

The reality is a different story. Market performance has been a very mixed bag. Some dividend stocks are thriving, such as TC Pipelines LP and National Bank of Canadais down 6.9 per cent this year, and that’s including dividends; Bank on Montreal is pretty much flat, eking out a 1.2-per-cent total return; and Nutrien Ltd. is down 7.2 per cent.So many dividend stocks are struggling that the iShares S&P/TSX Composite High Dividend Index ETF, which pays a 4.9-per-cent yield, has delivered a 17.

Falling rates, “should drive investors back into Canadian dividend-paying stocks – particularly since many of these equities have performed poorly vis-à-vis the broader market over the past couple of years,” wrote CIBC analysts in a note to clients.

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