Top TSX Dividend Stock to Purchase in February
Investing in dividend stocks can be challenging, especially in February, when market dynamics shift. High yields may obscure underlying business weaknesses, such as excessive debt or shrinking operations. The best dividend stocks on the TSX typically exhibit strong cash flow, valuable assets, and a sustainable payout ratio.
Why Choose Stable Dividend Stocks?
Investors should prioritize durability in their dividend selections. This stability is essential for income reliability. One TSX stock worth considering for dividends in February is Melcor Developments (TSX:MRD).
Company Overview
Melcor Developments operates in the real estate sector, primarily in Alberta, Canada. The company transforms raw land into vibrant communities and commercial spaces. It also manages diverse income-generating properties, such as retail and office spaces.
This diversification offers multiple revenue streams. Melcor can sell land, lease properties, and generate rental income. This flexibility helps cushion against adverse market conditions.
Recent Developments
In April 2025, Melcor completed a significant acquisition of public trust units from its real estate investment trust (REIT). This consolidation of income-producing properties enhances operational efficiency.
Furthermore, the company increased its quarterly dividend from $0.11 to $0.13 per share in 2025. The annual total dividend now stands at $0.48, a slight rise from $0.44 in 2024, indicating management’s commitment to improving shareholder returns.
Earnings Performance
The company’s earnings for Q3 2025 further bolster its investment case. Melcor reported revenue of $72.5 million and net income of $14.1 million. This translates to basic earnings of $0.46 per share, a significant recovery from the previous year’s losses.
Moreover, Melcor generated funds from operations amounting to $23.4 million for the quarter, reflecting the cyclical nature of land sales and project timelines.
Financial Health
As of September 30, 2025, Melcor had a total liquidity of approximately $193.1 million. Its total debt was around $593.9 million, reduced from $611.3 million in 2024. This downward trend in debt is vital for sustaining dividends and reducing refinancing risks.
Valuation Metrics
Currently, Melcor trades at a price-to-earnings ratio of 8.5, with a forward annual dividend of $0.52, resulting in a yield of roughly 3.2%. This valuation is attractive compared to many other “blue-chip” TSX dividend stocks.
Investment Considerations
Investing in Melcor could be appealing for those searching for a February dividend stock that offers real value rather than celebrity status on the TSX. While the stock’s modest valuation and improving dividend signal positive momentum, potential investors should be aware of the risks.
- Earnings volatility linked to land sales
- Fluctuating real estate values
- Concentration in the Alberta market and associated cycles
If you’re open to some variability in exchange for value and a growing dividend, Melcor Development deserves a place in your investment considerations this February.
