Investing in high dividend-paying stocks in Canada might have you imagining the highest yields. But not so. Today, we're going to look at the highest overall payout. An enticing strategy for anyone looking to generate passive income. These companies are leaders in their respective sectors, offering investors not only dividends but also a degree of stability.

But while they all share the appeal of high dividends, each company's financial health, growth outlook, and performance tell a more complex story. Let's dive into whether these stocks are worth adding to your portfolio, with a look at their most recent earnings, past performance, and future projections.

Fairfax

Fairfax Financial Holdings (TSX:FFH) stands as a giant in the Canadian insurance industry, with an impressive history of creating shareholder value through acquisitions and prudent risk management. In its latest quarterly earnings report, Fairfax posted earnings per share (EPS) of $46.61, reflecting a robust revenue increase of 28% year-over-year.

Yet, Fairfax's profit margin took a slight hit, slipping from 13% to 9.7%. This indicates rising operational costs. Despite these expenses, Fairfax's generous annual dividend of $20.29 per share offers investors an enticing income stream, especially with a low payout ratio of around 9.2%, suggesting that there is ample room for future dividend growth.

In the years ahead, analysts expect Fairfax's revenue growth to decelerate, potentially increasing by around 3.2% annually, lower than the insurance industry's average of 8.1%. Fairfax remains a safe pick with its diverse investments, but it may not be the fastest-growing stock for those seeking high capital gains.

Canadian Tire

Next we have Canadian Tire (TSX:CTC.A), a household name in Canada combining its retail and financial services divisions to offer shareholders consistent returns. In its recent third-quarter earnings, Canadian Tire reported a 21% increase in normalized diluted earnings per share (EPS) – an impressive feat in a time of mixed retail results.

However, quarterly revenue saw a slight decline of 1.8% to $3.8 billion, partly attributed to lower sales in petroleum products. Canadian Tire's loyalty programs, like Triangle Rewards, have been a bright spot, driving more loyal customers who spend more frequently. Recently, Canadian Tire increased its dividend to $7.10 per share, maintaining a 15-year streak of consecutive dividend hikes.

The dividend stock is also investing heavily in technology and logistics, signalling that it's looking to modernize. While these initiatives are a long-term positive, Canadian Tire faces some near-term challenges, especially with discretionary spending showing signs of strain due to economic pressures.

BMO stock

Bank of Montreal (TSX:BMO) is another strong contender for dividend investors, with a presence in both Canadian and U.S. markets that provides diversified income streams. In its latest earnings report, BMO saw a 19.3% increase in quarterly earnings growth, demonstrating its resilience despite macroeconomic headwinds.

Its net income hit $6.3 billion, benefiting from strategic expansions, notably the acquisition of Bank of the West in the U.S.. This has added nearly 1.8 million customers to its roster. BMO's forward annual dividend of $6.20 per share comes with a yield of around 4.7%, thus making it attractive for income investors. The bank's conservative approach to credit loss provisions suggests it's well-prepared for any downturn. Though BMO's recent performance could reflect some caution in the lending environment.

Bottom line

Ultimately, each of these stocks appeals to different types of investors. Fairfax is for those who value income stability, Canadian Tire attracts retail investors who believe in its brand strength and growth potential, and BMO serves those looking for financial sector security with U.S. market exposure.

As with any investment, consider each company's unique challenges and how they align with your own risk tolerance and financial goals. Fairfax may not outpace the market in growth, but it offers income stability. Canadian Tire faces headwinds but has shown resilience, while BMO's future remains bright as it continues expanding in the U.S. In the end, all are strong, though investors should find the best option for their own portfolio.