Best Canadian Stocks

All the Traits of a Dividend Star… Without the Dividend

Some companies scream “dividend grower” — stable revenue, rising earnings, mountains of cash flow — and yet, they barely pay a cent. One Canadian tech giant has delivered monster returns without ever becoming a traditional dividend payer. Instead of chasing yield and dividend payments, it reinvests cash into an aggressive, proven acquisition engine that keeps shareholders happy through capital gains, not distributions.

If you’re willing to make an exception for ultra-low yield in exchange for serious long-term wealth creation, this one might change how you define “dividend investing.”

Business Model: Buying, Holding, and Growing Software Niches

Constellation Software (CSU.TO) doesn’t build flashy apps or compete in crowded software categories. Instead, it acquires mission-critical software companies serving niche industries — often the kind of businesses no one’s ever heard of… except their loyal customers.

CSU acts like a holding company for vertical market software (VMS). It targets stable, low-churn software businesses with substantial recurring revenue, then lets them run independently with support from the parent. This decentralized model keeps local talent in place while improving capital discipline and operations.

Through six operating groups — Volaris, Harris, Topicus, Vela, Jonas, and Perseus — CSU now serves over 100 markets globally, spanning utility billing, health records, and marina management. The result? Low customer churn, sticky cash flows, and consistent margins — all without relying on a single industry.

Investment Thesis: Why Dividend Investors Should Still Care

At first glance, CSU doesn’t belong in a dividend portfolio. Its yield is barely noticeable, and it hasn’t raised its dividend in years. But dig deeper, and you’ll find a stock with all the hallmarks of a dividend growth engine — just without the dividend.

Revenue, EPS, and free cash flow all rise steadily thanks to one thing: disciplined acquisitions. CSU buys small, stable, and boring software companies at fair prices, then lets them thrive. Its decentralized playbook and capital discipline allow it to scale this model across dozens of verticals.

With low debt, high returns on capital, and a management team focused on long-term wealth creation, CSU continues to grow shareholder value — even if it keeps the cash in-house. For investors who prioritize compounding over current income, this is a name worth watching.

The Dividend Triangle in Action: Strong Fundamentals, Minimal Yield

Constellation Software (CSU.TO) 5-Year Dividend Triangle.

Despite its low payout, CSU checks all three boxes of the Dividend Triangle:

1. Revenue Growth: TTM revenue now sits at $14.41B, with a steady climb year after year. Q1 2025 revenue rose 13%, fueled by acquisitions and minor organic growth.

2. Earnings Growth: EPS reached $49.50, a 10% YoY increase. CSU continues to drive profit growth through smart integrations and operating efficiency.

3. Dividend Growth: This is where CSU “fails” the test. The dividend is stuck at $1.36, with no growth in sight — but that’s by design. With better uses for cash, management chooses to reinvest in new deals that generate higher long-term returns.

In short: this is a textbook Dividend Triangle stock — minus the dividend growth.

Bull Case: Serial Acquirer, Proven Playbook

For investors who don’t need yield today, CSU is a compounding machine with plenty to like:

Proven decentralized structure that scales across 100+ industries
Strong revenue, EPS, and cash flow growth — even in tough markets
Low debt, with $1.8B spent on acquisitions last year alone
Consistent history of finding, buying, and growing niche software companies
Organic growth may be small, but the acquisition pipeline is always full

Bear Case: All In on Acquisitions

Still, there are real risks to watch:

Growth depends on continuous deal flow. Slowdown = valuation hit
Acquisition multiples could rise as private equity and competitors enter the space
Complex structure makes it hard to track individual performance
Any stumble in capital allocation could rattle investor confidence
Sky-high valuation = little room for error

This stock is priced for execution. If the M&A engine stalls, so could the returns.

Latest News: Growth on Track, Expectations Higher

CSU’s most recent quarter showed solid results — but didn’t quite wow the market:

Revenue +13% | EPS +10%
Organic growth flat at 0.3% (2% with currency)
Free cash flow +14%
Acquired a significant stake in Asseco Poland S.A., expanding its global reach

Bottom line: growth continues, but with expectations so high, CSU needs to maintain a near-flawless execution pace.

Want More Stocks Like This?

We track more than yield. The Dividend Rock Star List includes Canadian and U.S. stocks that hit all the right metrics — even when yield is low.

Here’s what’s inside:

Filter by revenue, EPS, and dividend growth
Screen for quality with payout ratio, sector, and more
Updated monthly so you’re always working with fresh data
Great for building long-term portfolios focused on dividend resilience

Start browsing the Dividend Rock Star List now and find your next winner before everyone else does.

Final Word: All the Fundamentals, None of the Yield

Constellation Software isn’t for every dividend investor — and that’s okay. But if you’re willing to make a strategic exception, you’ll find a stock that does everything we want from a dividend grower… except pay one.

With decades of growth-by-acquisition success, low debt, high margins, and world-class capital allocation, CSU offers a blueprint for compounders. No fluff. No gimmicks. Just consistent, disciplined execution in a market that rewards it.

If you can live without the yield, this one might be worth the hold.

A Business Built Around Utility Poles and Railway Ties — And It Works

Lumber stocks usually run hot with housing booms and crash just as fast. But not this one. This Canadian company built its business around utility poles and railway ties — essential infrastructure that keeps cities powered and freight moving. In a sector known for wild swings, this one offers surprising consistency (and a few earnings surprises too).

Business Model: Where Wood Meets Infrastructure

Most investors hear “lumber” and think housing starts, sawmills, and cyclical chaos. However, Stella-Jones (SJ.TO) took a different route — it built its business around utility poles and railway ties, two products that are essential in modern infrastructure.

Instead of chasing construction booms, Stella-Jones established long-term supply relationships with power utilities, telecommunications companies, and railroads. These customers aren’t just placing one-time orders — they come back again and again for maintenance, upgrades, and replacements. That’s the kind of stability we like to see in a dividend-paying company.

Here’s what Stella-Jones focuses on:

Utility poles for electrical and telecommunications grids
Railway ties for short lines and commercial railroads across North America
Industrial wood products are used in bridges, marine pilings, and foundations
Residential treated lumber, primarily sold through Canadian retailers

With over 70% of revenue coming from poles and ties, Stella-Jones sits in a unique niche: boring, essential, and high-repeat. Sounds like a recipe for reliable cash flow.

Stella-Jones (SJ.TO) Nort American Network from its Annual Report of 2024.

Investment Thesis: Stable Demand, Smart Expansion

Stella-Jones isn’t your typical lumber stock. It built its business around utility poles and railway ties, supplying essential infrastructure with steady, repeat demand. These are not one-time purchases — they’re part of long-term maintenance cycles for utilities and railroads.

This provides SJ with a reliable customer base and predictable cash flow, even when residential construction slows. Its clients — power companies, telecoms, and railroads — don’t delay upgrades when interest rates rise.

Additionally, management has executed strategic acquisitions effectively, expanding its North American footprint in a fragmented market. With its core products tied to infrastructure — not housing — Stella-Jones offers steady growth potential backed by disciplined operations and rising margins.

Build a Smarter, Safer Dividend Portfolio

Whether you’re looking for income today or wealth tomorrow, you need stocks that deliver on all three parts of the Dividend Triangle.

That’s precisely what the Dividend Rock Star List is built for:

No fluff — just fundamentally strong dividend stocks
Includes both Canadian and U.S. dividend payers
Easily sort by dividend growth rate, payout ratio, and more
Updated every month — no stale picks, no guesswork

Use it to build your watchlist, strengthen your portfolio, or start fresh with confidence.

Explore the Dividend Rock Star List now:

The Dividend Triangle in Action: Solid, Steady, and Sharpening Margins

Stella-Jones (SJ.TO) 5-Year Dividend Triangle.

Looking at Stella-Jones through the Dividend Triangle lens reveals exactly why it stands out in a volatile sector:

1. Revenue Growth: Revenue reached $3.467B, showing a stable, upward trajectory since 2021. While growth has flattened recently, the trend remains positive, particularly in infrastructure-facing segments like utility poles and industrial products.

2. Earnings Growth: EPS sits at $5.58, up firmly from 2021 levels. Despite fluctuations in specific segments, SJ has improved its margin profile through disciplined cost management and pricing power — especially visible in the latest 23% jump in EPS.

3. Dividend Growth: The dividend increased to $0.31, representing a nearly doubling since 2021. While still modest in yield, it reflects a sustainable and consistent payout strategy, backed by stable cash flows and a conservative payout ratio.

Summary: SJ delivers on all three fronts. Even when revenues stall (as seen in the latest quarter), earnings and dividends continue to rise, signaling healthy operations and a resilient business model.

Bull Case: Built-In Repeat Business

There’s a lot to like here for investors who value stability and recurring demand. Consider the following:

Over 70% of sales from utility poles and railway ties = repeat demand
Clients include utilities and railroads that replace wood regularly
Growing U.S. presence and acquisition strategy support long-term growth
Low payout ratio = dividend growth runway

This isn’t a timber boom stock. It’s an infrastructure business disguised as a lumber company.

Bear Case: Macro + Tariffs = Wild Swings

Still, the company isn’t without its risks — and some of them could hit hard in a volatile year:

Revenue can get hit by currency fluctuations or sudden order shifts
One Class 1 railroad started producing its own ties — not great
The residential lumber business still relies on housing demand
Volatile stock: Double-digit daily moves aren’t rare, especially with tariff concerns brewing

Investors should expect bumps along the way — even if the long-term story looks solid.

Latest News: Flat Top Line, Fat Bottom Line

The latest quarter had a little bit of everything:

Revenue flat, but $38M FX headwind masked real progress
Utility poles +4% thanks to pricing power
Railway ties -8% due to client production shift
Residential lumber stable
EPS +23%, helped by insurance gains and leaner operations

In short: management delivered higher profits even without growth fireworks. That’s how you win long-term.

Want More Stocks Like This One?

The Dividend Rock Star List is our hand-picked collection of quality dividend stocks.
Here’s what you’ll find inside:

🔍 Over 300 U.S. and Canadian dividend-paying stocks
✅ Screened using our Dividend Triangle: Revenue growth, EPS growth, and dividend growth
🚨 Updated monthly with the latest data
📊 Filter by yield, sector, payout ratio, dividend growth rate, and more
💡 Discover reliable growers that can power your portfolio through bull and bear markets

Start browsing the Dividend Rock Star List now and find your next winner before everyone else does.

Final Word: You’re Not Buying a Lumber Company. You’re Buying a Utility Supplier

Stella-Jones isn’t sexy. It’s not flashy. But it is essential.

Between utility poles, railway ties, and disciplined execution, SJ has carved out a strong niche in a cyclical space. If you’re looking for dividend growers that do the job year after year — not just when lumber prices spike — this name should be on your radar.

Just don’t expect it to sit still. Volatility is part of the deal. Growth, however, is still on the table.

This Canadian IT Stock Deserves a Spot in Your Portfolio

In a tech world obsessed with disruption, some firms win by delivering mission-critical services with precision and consistency. This company has built one of the most dependable consulting and IT infrastructures supporting governments and enterprises across the globe — and its latest results show it’s still gaining ground.

Business Model: The Backbone of Digital Bureaucracy

CGI Inc. (GIB.A.TO) is a global consulting and IT services company that thrives on long-term contracts, particularly in the public sector. With operations in over 40 countries and more than 90,000 employees, its core strategy is simple: being close to the client.

The firm deploys a proximity-based model, which places offices near its customers — especially effective for sensitive government work where data sovereignty, security, and compliance are paramount. Its comprehensive service suite spans:

IT and business consulting
Managed IT and business process services
System integration
Proprietary software solutions

Its client-first approach is underscored by a 95% contract renewal rate, proving the strength of its long-term relationships.

CGI Revenue Mix from their Q2 F2025 Presentation.

Investment Thesis: Built for Resilience, Positioned for Growth

This company stands out not through flash, but through stability and execution. Serving governments and large enterprises with critical infrastructure, it builds high-retention, multi-year recurring revenue. Its book-to-bill ratio of 110% signals sustained demand, while public sector work — nearly 40% of total revenue — provides a defensive core.

In a world accelerating toward digital transformation and automation, this firm is well-positioned with capabilities in AI, cybersecurity, and data analytics. As governments modernize and enterprises automate, this company is the quiet engine behind the upgrade.

For an even more detailed investment thesis, watch my video on CGI below.

Want More Stocks Like This One?

The Dividend Rock Star List is our hand-picked collection of quality dividend stocks.
Here’s what you’ll find inside:

🔍 Over 300 U.S. and Canadian dividend-paying stocks
✅ Screened using our Dividend Triangle: Revenue growth, EPS growth, and dividend growth
🚨 Updated monthly with the latest data
📊 Filter by yield, sector, payout ratio, dividend growth rate, and more
💡 Discover reliable growers that can power your portfolio through bull and bear markets

Start browsing the Dividend Rock Star List now and find your next winner before everyone else does.

The Dividend Triangle in Action: Growth, Growth and… Not Much Yield

GIC (GIB.A.TO) 5-Year Dividend Triangle. — CGI Inc. (GIB.A.TO) 5-Year Dividend Triangle.

Let’s look at the company through the lens that matters: the Dividend Triangle.

1. Revenue Growth: Revenue sits at C$15.14B, up steadily over the past three years. That’s what you want to see — clients are spending, and the firm is landing new contracts.

2. Earnings Growth: EPS climbed to $7.87, tracking right alongside top-line growth. This shows substantial operating leverage and margin discipline.

3. Dividend Growth: The dividend is symbolic: $0.15 per share. This isn’t an income stock. Management prefers to reinvest capital into growth and acquisitions. And frankly? With these returns on equity, that’s not a bad call.

Bull Case: A Backlog that Buys Time and Growth

Investors bullish on this name point to several strengths:

A backlog of C$30.99B, equivalent to 2x annual revenue
Strong public sector exposure — offering resilience during economic downturns
A scalable global model with recent acquisitions driving margin improvements
Expanding into AI-driven solutions, where demand is surging
Financial discipline with rising EPS and a history of effective capital allocation

This is a stock built for compounders who value visibility, execution, and sticky client relationships.

Bear Case: Acquisition Risks and Margin Ceilings

While its recurring revenue model is attractive, bears flag a few key risks:

Its growth strategy leans heavily on acquisitions, raising concerns about integration execution and potential overpayment
Government contracts, while stable, tend to come with lower margins
The company’s low dividend payout (currently $0.15) and slow dividend growth may turn off income-seeking investors
In a talent-driven industry, maintaining headcount and quality amid global wage inflation could become a drag

Any stumble in acquiring, integrating, or retaining key staff could pressure performance.

Latest News: Booking Big, Growing Steady

The most recent quarterly report was strong across the board:

Revenue and EPS up 8% YoY
U.S. Commercial & State Government segment up 24.6% in EBIT
Scandinavia, Northwest & Central-East Europe EBIT up 21.7%
Book-to-bill ratio: 111.5%, with solid new contract momentum

These results reinforce the strength of the firm’s international footprint and its ability to scale contracts profitably.

Final Word: A Low-Yield, High-Confidence Compounder

This company may miss the spotlight like tech giants, but it compounds value through consistency, thoughtful acquisitions, and long-term client relationships. For dividend growth investors, the fundamentals are in the right place.

With its deep backlog, public sector strength, and push into AI and digital transformation, this is a stock worth watching — and potentially owning.

Build a Smarter, Safer Dividend Portfolio

Whether you’re looking for income today or wealth tomorrow, you need stocks that deliver on all three parts of the Dividend Triangle.

That’s exactly what the Dividend Rock Star List is built for:

No fluff — just fundamentally strong dividend stocks
Includes both Canadian and U.S. dividend payers
Easily sort by dividend growth rate, payout ratio, and more
Updated every month — no stale picks, no guesswork

Use it to build your watchlist, strengthen your portfolio, or start fresh with confidence.

Explore the Dividend Rock Star List now:

Canadian Depositary Receipts (CDRs): Smart Shortcut or Investment Illusion?

Imagine being able to invest in Amazon, Apple, or Microsoft in Canadian dollars—without opening a U.S. account or worrying about exchange rates.

Welcome to the world of Canadian Depositary Receipts (CDRs), a unique financial product tailored for Canadian investors who want access to big-name U.S. companies without the hassle of the U.S. dollar.

But before you jump in thinking CDRs are the ultimate shortcut, let’s take a closer look.

Are they the perfect solution?
Or are there limitations you need to know before clicking “Buy”?

Let’s explore what CDRs are, how they work, and whether they belong in your portfolio.

What Are CDRs and Why Are Canadians Interested?

CDRs are like the Canadian cousin of ADRs (American Depositary Receipts).

But instead of giving U.S. investors access to foreign companies, CDRs let Canadian investors buy fractional shares of U.S. companies—right on the Canadian market and in Canadian dollars.

They’re issued by CIBC and traded on Cboe Canada (formerly the NEO Exchange). You don’t need a U.S. brokerage account, and there’s no need to convert your CAD to USD. You log in to your brokerage, search for the CDR ticker (like AAPL.NE for Apple), and buy in Canadian dollars.

CDRs are especially appealing for two reasons:

Currency hedging: CDRs protect you from USD/CAD fluctuations—your returns aren’t affected if the loonie drops in value.
Fractional investing: Since you’re buying a slice of a U.S. share, you can invest in companies like Amazon or Microsoft for just $30–$40 CAD per share.

Sounds convenient, right? It is—but there’s more to the story.

What You Gain and What You Might Miss

Pros of CDRs

Invest in U.S. giants without buying USD
Lower share price makes big names accessible
Currency fluctuations are mostly neutralized
Dividends are paid in Canadian dollars
No special tax rules if held in an RRSP

But, of course, there are a few limitations you should know about.

The Not-So-Obvious Downsides

You miss out when the U.S. dollar gains value. Since 2021, the USD has appreciated by about 10% against the CAD. If you had held Amazon’s U.S. stock instead of the AMZN CDR, you’d have seen a 10% boost in your returns just from currency alone.
Only a subset of U.S. companies are available as CDRs. Many strong dividend-paying U.S. stocks—especially those favored by income investors—aren’t included.
They’re just fractions. Buying a CDR is like buying a slice of pizza when you want the whole pie. Sure, you can buy more over time, but you’re still tied to fractional dividend payouts and limited voting rights.

Do You Get the Dividend?

Yes! If the company pays a dividend, CDR holders receive it proportionally.

Instead of receiving the full dividend per share (like $0.62/share from Microsoft), you get the same yield (e.g., 0.85%) on the CAD value of your investment. It’s all paid out in Canadian dollars—no conversion or withholding tax if held in an RRSP.

One note of caution: If you hold your CDRs in a TFSA, the dividend is still subject to a U.S. withholding tax, even though the shares are bought in CAD.

Is it Really that Hard to Buy US Stocks?

This is where I push back on the “CDRs are more convenient” argument.

These days, most Canadian brokers offer dual-currency accounts, so you can hold CAD and USD side-by-side. And if you’re worried about conversion fees, there’s a great workaround known as Norbert’s Gambit, which lets you convert CAD to USD for a fraction of what banks charge. It takes a bit of setup, but for long-term investors, it’s well worth it.

Want to learn how Norbert’s Gambit works and when it makes sense to use it?

Get the full explanation in the CDR Guide (yes, it includes a step-by-step example and diagram).

My Personal Take: I Don’t Use CDRs-Here’s Why

Despite all their benefits, I don’t invest in CDRs myself, and here’s why:

I like the long-term upside of holding U.S. dollars. Over decades, the CAD/USD fluctuations tend to even out, but when the USD rises, I want to benefit from it.
I prefer direct ownership of U.S. stocks. More options, full shares, full dividends.
I already have a USD account. Once you’re set up, buying U.S. shares directly isn’t any more complicated, and I keep the dividends in USD for reinvestment.

That said, CDRs aren’t bad. They’re actually good for newer investors, those starting with small amounts, or anyone uncomfortable dealing in U.S. currency. But they’re not revolutionary. And they’re not for everyone.

Want to Dive Deeper?

In the CDR Guide, you’ll learn:

How fractional investing works in practice
The complete list of all 86 CDRs available as of April 2025
How currency hedging affects your long-term returns
Why most high-quality dividend stocks aren’t available as CDRs
My complete breakdown on Norbert’s Gambit for CAD/USD conversion

Subscribe now to get your copy of the Canadian Depositary Receipts (CDRs) Guide.

Canadian Banks Ranking 2025

Think all Canadian banks are the same? Think again.

Your choice could mean the difference between market-beating returns and lagging.

A common belief is that all Canadian banks perform similarly because of the country’s strong banking system. Since the 2008 financial crisis, each member of the Big Six (Royal Bank, TD Bank, ScotiaBank, BMO, CIBC, and National Bank) has taken a different path.

They all benefited from the banking oligopoly in Canada to fund new growth vectors. Fifteen years later, picking the wrong bank will leave much money on the table.

While most have outperformed the Canadian stock market for 5, 10, 15, and probably 25 years, as of March 2025, five of six had outperformed the market, and four also outperformed the ZEB.TO equal weight banks ETF over 10 years.

In other words, two are lagging. So which one is best this year and for decades to come?

Canadian Banks Ranking 2025

#6 ScotiaBank (BNS.TO)

Investment Thesis: International Edge – A Double-Edged Sword

Scotiabank differentiates itself from Canada’s Big Six banks with its extensive international presence, particularly in Latin America. While this provides higher long-term growth potential, it also introduces volatility and risk.

The bank has streamlined its global footprint, focusing on key markets like Mexico, Peru, and Chile. However, it has consistently struggled to outperform its peers.

Growth will depend on optimizing international operations, expanding wealth management, and navigating economic challenges. While Scotiabank benefits from Canada’s highly regulated banking system, its international moat is narrower than competitors, limiting its pricing power abroad.

Potential Risks: Volatility Ahead

BNS’s international presence brings unique risks, including exposure to economic downturns, political instability, and currency fluctuations.

The bank has faced rising provisions for credit losses (PCLs), an inefficient cost structure, and challenges in improving profitability.

Domestically, Scotiabank remains vulnerable to a housing market correction and economic slowdown. Broader macroeconomic risks, such as rising interest rates and trade tensions, add further uncertainty. Despite its international reach, Scotiabank has struggled to achieve superior financial performance compared to its peers, lacking dominant market share in key regions and facing stiff competition in wealth management.

The ONLY List Using the Dividend Triangle

After this first example, you may wonder how I was able to differentiate these positions.

I analyze companies according to their dividend triangle (revenue, earnings, and dividend growth trends), combined with their business model and growth vectors. While this may seem too simple, two decades of investing have shown me it is reliable.

While many seasoned investors also use these metrics in their analysis, no one has created a list based on them before. This is exactly why I created The Dividend Rock Stars List.

The Rock Stars List isn’t just about yield—it’s built using a multi-step screening process to ensure the highest-quality dividend stocks. You can read more about it or enter your name and email below to get the instant download in your mailbox.

#5 Canadian Imperial Bank of Commerce – CIBC (CM.TO)

Investment Thesis: A Safe Bet or a Slow Grower?

CIBC shows a strong focus on domestic retail and commercial banking.

Unlike peers with extensive international exposure, CIBC has pursued U.S. expansion to diversify its revenue streams, particularly in wealth management. However, integrating private banking remains a challenge.

The bank trades at a discount due to its slower growth trajectory, making it appealing to income-focused investors.

Its digital banking platform, Simplii Financial, presents an opportunity for long-term customer retention, while reliance on mortgage lending poses risks in economic downturns. While benefiting from Canada’s banking oligopoly, CIBC lacks the competitive moat of more diversified peers.

Potential Risks: Too Focused on Canada?

CIBC faces significant risks due to its heavy reliance on the Canadian housing market, making it more vulnerable than its peers to rising interest rates and a potential real estate downturn.

The bank’s high exposure to uninsured mortgages could increase loan loss provisions in an economic slowdown. Its domestic concentration further exposes it to Canadian economic cycles, regulatory changes, and potential recessions.

Among the Big Five, CIBC has underperformed in total returns and future growth expectations, with its strong dividend yield coming at the cost of lower capital appreciation. While its U.S. expansion aims to diversify risk, its mortgage-heavy model remains a key weakness.

#4 TD Bank (TD.TO)

Investment Thesis: Canada’s Most American Bank

Toronto-Dominion Bank (TD) stands out due to its strong retail banking franchise and significant U.S. presence.

With the largest branch network of any Canadian bank in the U.S., TD has historically relied on acquisitions and organic expansion for growth. However, recent regulatory scrutiny and an anti-money laundering investigation in the U.S. have limited its expansion opportunities.

While TD benefits from a stable Canadian business, rising interest rates present both an opportunity for higher margins and a risk of loan defaults.

Potential Risks: Can TD Overcome Its U.S. Setback?

TD Bank faces mounting risks due to its U.S. anti-money laundering investigation, which led to a multibillion-dollar fine and asset growth restrictions on its U.S. operations.

This directly impacts TD’s long-term expansion strategy, forcing it to shift focus from aggressive growth to regulatory compliance and operational efficiency.

The bank also remains exposed to the Canadian housing market, where rising interest rates could increase mortgage defaults. Broader economic risks add further uncertainty, including trade tariffs and slowing growth.

While TD’s strong brand and market position remain advantages, regulatory constraints could allow competitors to expand more aggressively, putting TD at a disadvantage.

#3 Bank of Montreal – BMO (BMO.TO)

Investment Thesis: Capital Markets, Wealth Management & U.S. Banking

BMO is a diversified financial institution with a strong presence in Canada and the U.S., generating about one-third of its revenue from U.S. operations.

Its strategic expansion, particularly through the 2023 acquisition of Bank of the West, strengthens its cross-border footprint.

BMO has also been a leader in wealth management and ETFs, leveraging these segments for stable fee-based revenue. However, rising provisions for credit losses (PCLs), integration challenges, and exposure to capital markets introduce volatility to its earnings.

Potential Risks: Can It Manage Rising Risks While Competing with Industry Giants?

BMO’s reliance on wealth management and capital markets for growth exposes it to heightened risk, particularly during periods of economic uncertainty.

Rising provisions for credit losses (PCLs) have significantly impacted earnings, partly driven by the challenges of integrating its Bank of the West acquisition.

The bank faces competitive pressures in traditional banking and the ETF space, where BlackRock (BLK) remains a dominant force.

Additionally, macroeconomic headwinds—including trade tensions and potential recession risks—could lead to earnings volatility. While BMO’s U.S. expansion provides diversification, it also increases exposure to higher credit risks compared to more domestically focused Canadian banks.

#2 National Bank (NA.TO)

Investment Thesis: Western Expansion and Global Investments

NA is the most domestically focused of the Big Six banks, with 73% of its revenue generated in Canada, primarily in Quebec.

Its recent $5B acquisition of Canadian Western Bank is set to expand its presence in Western Canada, creating cross-selling opportunities, particularly in private banking.

The bank has also diversified beyond traditional banking, with significant growth in capital markets, wealth management, and international investments, including ABA Bank in Cambodia and Credigy in the U.S.

Potential Risks: Growing Challenges

National Bank’s strong performance comes with significant risks, primarily due to its heavy reliance on Quebec, which accounts for about 50% of its revenue. This geographic concentration makes it more vulnerable to regional economic downturns than its larger, more diversified peers.

This also explains why it has fallen second this year, considering the economic uncertainty linked to political tensions between Canada and the U.S.

The bank also takes on higher risk through its international investments in Cambodia (ABA Bank) and alternative lending in the U.S. Rising provisions for credit losses, particularly from ABA Bank, add further uncertainty.

Additionally, its exposure to financial markets introduces earnings volatility, while its smaller scale puts it at a competitive disadvantage against Canada’s largest banks.

I discussed NA’s current challenges in more depth in the Q1-2025 earnings review video. You can then fully grasp why it now holds the second position while remaining one of the best banks for investors.

#1 Royal Bank – RBC (RY.TO)

Investment Thesis: Built for Global Growth

RBC is the largest Canadian bank by market capitalization, with a well-diversified revenue model spanning personal and commercial banking, wealth management, insurance, and capital markets.

Over 50% of its revenue now comes from insurance, wealth management, and capital markets, reducing dependence on traditional banking. RBC’s focus on expanding these segments post-2008 has positioned it well for stable cash flows, market-driven profitability, and global growth.

While Canadian banking regulations create high barriers to entry, RBC’s strong international presence enhances its resilience. Its brand strength, extensive client base, and broad service offerings make it a dominant force in the financial sector.

Potential Risks: Housing, Regulation, and Market Volatility

Despite its diversified business model, RBC faces key risks, including exposure to the Canadian housing market, regulatory constraints, and economic downturns, just like any other bank.

Rising interest rates could increase mortgage defaults, impacting its loan portfolio and necessitating higher provisions for credit losses (PCLs).

A potential recession could slow lending activity and increase default rates in both personal and commercial banking. Additionally, regulatory changes could limit profitability, while competition from both domestic banks and global financial institutions pressures RBC to innovate and adapt continuously.

All things considered, it remains the best Canadian Bank option for dividend growth investors.

Find Other High-Quality Stocks: Download the Dividend Rock Stars List

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This isn’t just a list of high-yield stocks—it’s a handpicked selection of Canada’s best dividend growth stocks backed by detailed financial analysis.

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Final Thoughts: Don’t Overdo It!

I’m a foodie, and I love cooking. I particularly like adding spices to get the right taste in a good recipe.

But one thing I don’t do when I cook is to open my cabinet and select sea salt, pink salt, lava salt, Kosher salt, Celtic salt, smoked salt, and a pinch of Fleur de Sel all for the same recipe.

You probably know why, as the taste would very likely be disgusting.

Like seasoning in a meal, a little exposure to Canadian banks can enhance your portfolio. But overdoing it? That could leave a bad aftertaste. Choose wisely.

Buy and Hold Forever: Top Canadian Stocks for Lifetime Returns

What if you could invest once and never worry again?

That’s the power of forever stocks—companies so strong and reliable that you can buy them, hold them for decades, and sleep soundly at night.

Let’s be clear, my selections aren’t based on timing; I’m not saying that they are great buys right now, but rather that I’d buy any of them and that, if I couldn’t monitor them quarterly as I do (and you should too), I wouldn’t worry much.

Forever stocks share several of these qualities:

Diversification
- Forever stocks are companies that diversify to reduce risk by not relying solely on one market or product for revenue.
Market leaders
- Forever stock companies often dominate their industry or market segment, enjoying a significant market share and strong competitive advantages.
Economies of scale
- The average cost per unit decreases as a company produces more products or services.
Predictable cash flow
- Being able to anticipate consistent and steady incoming cash over time reasonably is crucial for a company’s financial health and sustainability.
Stable or sticky business model
- A stable business operates consistently and predictably; it found a formula for generating revenue and maintaining profitability.
- A sticky business, on the other hand, aims for customer loyalty and retention, and repeat business.
Essential products or services
- Selling essentials—food, medical supplies, energy, communication services, transportation, etc.— produces relatively stable demand and revenue stream, as well as repeat business due to customer loyalty and resilience.
Multiple growth vectors
- Growth vectors are paths to expand business, increase revenue, and enhance market presence.
Long dividend growth history
- Yearly increases over decades mean the company ticks the boxes for many of the qualities described earlier.

This list is partial; clearly, other contenders could be on it. I have covered this part more in-depth on The Dividend Guy Blog.

Brookfield Corporation (BN.TO) – Financials

Brookfield skyrocketed with more than 50% return in 2024. I think there is more to come!

Brookfield is amongst the most prominent players in alternative asset management. As the stock market looks overvalued, many investors will turn toward alternative assets to generate profits and hedge their bets. Those long-term assets require patient capital and a high level of expertise. Brookfield is in a perfect position to provide this service to investors.

Even better, BN invests its capital in its many projects. Therefore, it can double-dip by charging a fee on managed capital and making capital gains when selling assets.

The ONLY List Using the Dividend Triangle

After this first example, you may wonder how I find such high-quality dividend stocks.

I handpick companies with a strong dividend triangle (revenue, earnings, and dividend growth trends) and make sure I understand their business model. While this may seem too simple, two decades of investing have shown me it is reliable.

While many seasoned investors also use these metrics in their analysis, no one has created a list based on them before. This is exactly why I created The Dividend Rock Stars List.

National Bank (NA.TO) – Financials

The bank seems to have done everything right over the past 15 years.

This significant transformation converted a small provincial bank into a serious player in capital markets and the private wealth industries.

The Bank is expected to complete a key acquisition of Canadian Western Bank in 2025, which will bring more capital onto its balance sheet (supporting capital market lucrative operations), more synergies (high cross-selling opportunities between CWB’s commercial clients and private wealth management), and a good presence in Western Canada.

NA is also doing very well in Cambodia (Aba Bank) and through its door into the U.S. (Credigy).

Note that National Bank (NA.TO) is also a Canadian Dividend Aristocrat.

Dollarama (DOL.TO) – Consumer Discretionary

DOL has built a strong brand, and its business model (aimed at low-value items) is an excellent defensive play against the e-commerce threat over the retail business.

As consumers’ budgets are tight, DOL appears to be a fantastic alternative for many goods. Dollarama has consistently increased same-store sales and opened new stores.

Introducing many products under its “home brand” increases the company’s margin. DOL introduced a new price point of $5 for many items, adding flexibility and pricing power.

DOL.TO 10-year dividend triangle: Revenue, EPS, and Dividend Growth.

Alimentation Couche-Tard (ATD.TO) – Consumer Staples

I’ve looked at grocery stores, but they don’t seem to offer many growth opportunities. Don’t get me wrong, they are great companies, but I think ATD will do better.

Things are changing quickly around the 7-Eleven deal. ATD has tried to get to the negotiation table to acquire 7-Eleven for a few months. The Japanese company is trying all means to stay Japanese. The latest chatter was that the son’s founder would repurchase it and make it private. The market liked the idea, and the ATD share price rose again. This story isn’t over yet, one way or another.

For 2025, I see ATD striking another acquisition.

After all, it’s in its DNA. If it’s not 7-Eleven, it will be another chain (maybe Casey’s?… it tried to acquire CASY in 2010). ATD must gain more expertise in growing organically through the sale of ready-to-eat and fresh produce. This is how they can mitigate the impact of slowing fuel and tobacco sales over the next 10-20 years.

Alimentation Couche-Tard (ATD.TO) is another Canadian Dividend Aristocrat part of this list.

Canadian Natural Resources (CNQ.TO) – Energy

CNQ is a rare beast in its environment that has increased dividends for 25 consecutive years. Yes, it even increased its payouts while everybody was on hold or cutting distributions in 2020.

This raises the question: Why is CNQ “oil price resistant”?

The company is sitting on a large reserve of cheap oil. According to management, CNQ is profitable, with an oil price per barrel of around $35-$40. This enables the company to manage production and capex with greater flexibility. They can then slow down CAPEX when the oil price is low and produce less. When we are in “full oil bull mode”, CNQ bolsters CAPEX and boosts production generating maximum cash flow. This is precisely what just happened when CNQ dropped its debt and now focuses on rewarding shareholders with share buybacks and dividend increases.

To be clear, I don’t see CNQ as a super-powered growth stock for the future. However, with a yield above 4% and a resilient business model, that’s the type of business that will either be very good in your portfolio or will go back into hibernation mode, paying a secure dividend. In both scenarios, you can be a winner in the long run.

Waste Connections (WCN.TO) – Industrials

If you are looking for a beast in the industrial sector, you should probably look toward the waste management industry.

Waste Connections has refined its expertise in acquiring and integrating smaller players in the same industry. Its business model is recession-proof, as solid waste is a given regardless of the economic cycle.

I also like the fact that WCN offers a recurring service and is fully integrated. Management has been adept at integrating their acquired companies. Therefore, the business is not only growing but also becoming more profitable.

The company has the size to enjoy the resulting economies of scale. Its dividend payment is low, but its dividend growth is strong.

WCN.TO 10-year dividend triangle: Revenue, EPS, and Dividend Growth. — DOL.TO 10-year dividend triangle: Revenue, EPS, and Dividend Growth.

CCL Industries (CCL.B.TO) – Materials

Finding an international leader with a well-diversified business based in Canada is rare.

Through the significant acquisition of business units from Avery (the world’s largest supplier of labels) in 2013, the company has set the tone for several years of growth. Bolstered by its previous successes, CCL also bought Checkpoint, a leading developer of RF and RFID, and Innovia in the past few years and announced more acquisitions in 2021.

The company can still generate organic growth (roughly 4-5%) on top of its growth through acquisitions.

Granite (GRT.UN.TO) – Real Estate

Granite is a very frustrating REIT to hold.

I love the investment thesis, which includes the strong need for industrial properties, GRT’s ability to grow its business while growing FFO per unit and distribution increases intact, and the high occupancy rate. The financial metrics back this investment thesis, such as revenue, funds from operations, FFO per unit, payout ratio, and occupancy rate, all look good.

Why is GRT frustrating to hold?

Because it simply doesn’t get any love from the market. Despite its good numbers, GRT lags the market and fails to generate positive returns. This is among the rare REITs exhibiting AFFO per unit growth while issuing more units to finance growth.

Fortis (FTS.TO) – Utilities

Fortis invested aggressively over the past few years, resulting in solid growth from its core business.

Investors can expect FTS’ revenues to grow as it expands. Bolstered by its Canadian-based businesses, the company has generated sustainable cash flows, leading to four decades of dividend payments.

The company’s five-year capital investment plan is approximately $25 billion between 2024 and 2028, $2.7 billion higher than the previous five-year plan. The increase is driven by organic growth, reflecting regional transmission projects for several business segments. Only 33% of its CAPEX plan will be financed through debt, while 61% will come from cash from operations. Chances are that most of its acquisitions will happen in the U.S.

We also like the company’s goal of increasing its exposure to renewable energy from 2% of its assets in 2019 to 7% in 2035.

FTS.TO 10-year dividend triangle: Revenue, EPS, and Dividend Growth.

Find Other Buy and Hold Forever Stocks: Download the Dividend Rock Stars List

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