Banking On It in January, 2026

 

We are into 2026 already after a couple weeks of prepping for the holidays. The start of another year accumulating dividends from stocks with a yield of 3% and up yearly. 

The average Canadian stock investor made a 20% return less dividends or higher in 2025 by selecting stocks out of the top 20 or more by descending dividend yield ending a great year. Although predictions are everywhere for 2026, no one knows what lies ahead so I just continue with my long term plan holding mainly banks, pipelines, utilities and the financial insurance sector, which has performed better than I expected in 2025.

Looking at the ex-dividend calendar for January, it's once again what I call a Big Bank month in Canada with most of them having declaration dates starting with the Bank of Nova Scotia, TD Bank, the Bank of Montreal and Royal Bank having ex-dividend dates towards the end of January.

With decent quarterly reports ending 2025, the banks are getting expensive and an option is to buy partial shares with brokers like Wealthsimple, Questrade and TD Investing.

Where I own the banks, I look forward to the yearly dividend increases, once again occurring in the last quarter of 2025 except BNS.TO, which may happen this year. But I can't complain where the stock gained 36.50% in the last 6 months, soaring to a current $100 per share. 

Personally, where financials are a foundation for my portfolio, 2026 is the year I'm looking for more income on a monthly basis from the banks and turning more to ETFs which hold banks and those with other sectors mixed in that I'm comfortable with.

ETF providers of which there are many now and have their own versions of bank or financial sector holdings in their ETFs. BMO's ZWB.TO, with ZEB as one of it's top holdings is my choice and recently increased it's distribution by 9%. Being a covered call, it's chart shows a roller coaster over the years but it's been moving up since April of 2025 so like that total return to date.

                                         As of January 4th, 2026: ZEB 2.95% - ZWB 5.38%

Mid month, I'll be thinking about Emera, EMA.TO with an ex-dividend date of January 30th with a current yield of 4.33%. The utility, based in Nova Scotia jumped 26% over the last year but has levelled off some lately and the stock is below it's fair value or undervalued at this time.

Interesting is a mega project highlighted by the Federal Government for a multi billion dollar Nova Scotia and Newfoundland offshore wind farm project which has the potential to help power east coast provinces, Quebec and Maine which is looking for additional power sources.

Emera is involved in the Wind West Initiative in it's preliminary plans and stages. Federal money will be needed to make it more than just discussions and planning so see what unfolds in the future with that project. Cheaper power for users down the road? I doubt it but more "green" supply if it happens. 

The TSX, S&P/TSX composite index gained near 29% for 2025. Totally unexpected from the beginning of 2025 predictions and that's not including dividends. This year, I'd be happy with half ... a 15% gain with another, anything can happen year with US/Canada trade negotiations continuing, what's going on economically and around the world impacting the Markets on a weekly basis.

The Mid December 2025 Shopping List

 

It's a busy time of year, being mid December with many having travel plans to visit family or friends along with last minute shopping ideas. Preparing for Christmas meals while looking for deals as groceries continue to go up, especially meats and poultry. Turkeys are actually the least expensive these days, depending on the store.

An interesting read with Bob's recent article on his Tawcan blog about 5 Canadian stocks he is deciding on buying in early January with his TFSA account.  Of the 5, I own 2 and agree on Canadian Natural Resources, CNQ.TO and Manulife Financial, MFC.TO. Both stocks I own and buy on a regular basis. 

Canadian National Railway, CNR.TO is a stock I expect to gain in the future while currently dealing with Canada/USA trade tariffs but with track in the USA, the company moves a lot of freight, as well as at home.

On my end and with ex-dividend dates at the end of December, TC Energy, TRP.TO and the pipeline South Bow Corp, SOBO.TO are both on my radar. 

Capital Power. CPX.TO is making news recently, adding assets and renovating them in the US and a contract to power a data centre in Canada with details to come out at later date. 

Power Corporation of Canada, POW.TO is also on my further buy list. With POW, I think of Wealthsimple, Great-West Life and IGM Financial being under their wing as a holding company.

The top 6 banks in Canada increased their dividends last month except for the Bank of Nova Scotia, which may come in 2026 but I like the 35% gain since June of this year. BNS.TO has an ex-dividend date of January 6th, 2026 with a current 4.38% yield. 

Interesting and surprising for a covered call ETF I own for the income, ZWB, BMO Covered Call Canadian Banks hit a record high at over $25 a unit currently and increased it's distribution by 10% for the November's payment with a market cap of 3.8 billion. I'm always aware that a market pullback will probably effect ZWB's price more being a covered call than it's bank holdings but as a risk reliever, one can always sell now for the total gain if bought in 2024 for example or early April of this year.

I'm looking forward to 2026 and another interesting year with the stocks along with the ups and downs of the market place.

Have a safe Merry Christmas and wishing good health.