2 Dividend-Growth Stocks With TSX-Beating Potential That Deserve More Respect

Here are two of the best TSX dividend-growth stocks you can buy today and hold for the next decade.

| More on:
Growth from coins

Image source: Getty Images

Dividend-growth stocks offer a compelling mix of income and growth, making them an excellent choice for long-term investors. While the S&P/TSX Composite Index has many well-known dividend payers, some high-potential stocks still fly under the radar and often don’t get the recognition they deserve.

Such Canadian dividend stocks that not only pay regular dividends but also consistently increase their payouts have the potential to outperform the TSX in the long run, making them smart picks for beginning investors as well as seasoned market participants. In this article, I’ll highlight two such TSX dividend-growth stocks that have strong fundamentals and attractive growth prospects. Let’s take a closer look at them.

Quebecor stock

Quebecor (TSX:QBR.B) is a Montréal-headquartered company that operates in the media and telecommunications industries mainly through its subsidiaries like Videotron and TVA Group. The company currently has a market cap of $6.7 billion as its stock trades at $28.95 per share after sliding by 8% so far in 2024. At this market price, this TSX stock offers a 4.5% annualized dividend yield and distributes these payouts on a quarterly basis. Interestingly, its dividend per share has gone up by around 37% over the last three years (ended in December 2023).

Last year, Quebecor’s earnings climbed by 12% YoY (year-over-year), while its total revenue inched up by nearly 20%. Despite the ongoing challenging macroeconomic environment and high inflationary pressures, the company is continuing to maintain positive financial growth this year as well. In the first quarter of 2024, its recent acquisition of Freedom Mobile helped Quebecor post a strong 22.2% YoY increase in its revenue to $1.4 billion. Similarly, its adjusted quarterly earnings rose 20.3% from a year ago to $0.71 per share, also beating Street analysts’ expectations of $0.67 per share.

Going forward, Quebecor’s financial growth trends could improve as it continues to focus on debt reduction, disciplined cost management, and strategic investments. In addition, easing inflationary pressure is likely to support its business growth, which should help its share prices recover fast.

Canadian Tire stock

Canadian Tire (TSX:CTC.A) could be another top dividend-growth stock to buy on the Toronto Stock Exchange right now. This Toronto-headquartered retailer is well known for its extensive range of automotive, sports, and home products. It currently has a market cap of $7.8 billion as its stock trades at $135.94 per share after sliding by 5.7% over the last six months. Canadian Tire stock has an attractive 5.1% annualized dividend yield at the current market price and distributes these dividend payments quarterly, just like Quebecor. In the five years ended in December 2023, its dividend per share has surged by a solid 93%.

In the first quarter, Canadian Tire’s sales dived by 4.9% YoY to $3.5 billion as the challenging consumer demand environment continued to affect consumer spending. Nevertheless, the company registered a strong performance in the retail and financial services segments, with product margin expansion and reduced inventory levels.

Moreover, Canadian Tire’s proactive efforts to optimize supply chain efficiencies, minimize unnecessary costs, and leverage digital technologies brighten its long-term growth outlook, making it an attractive dividend-growth stock to buy on the TSX today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Dividend Stocks

Family relationship with bond and care
Dividend Stocks

Invest in These TSX Stocks Now and Retire With Peace of Mind

Canadian stocks like Brookfield Asset Management (TSX:BAM) offer long term investment potential.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Passive Income: 4 Stocks to Buy and Never Sell

These four TSX dividend stocks could boost your passive income.

Read more »

growing plant shoots on stacked coins
Dividend Stocks

2 Risky Dividend Stocks to Avoid (and 2 Safe Ones)

Looking for dividend income? Here are two stocks to avoid and two stocks to readily buy for safe and steady…

Read more »

question marks written reminders tickets
Dividend Stocks

Is Telus Stock the Best High-Yield Dividend for You? 

Would you invest in a stock that gives a 7% yield or a 22% yield? Telus is a high-yield stock…

Read more »

exchange-traded funds
Dividend Stocks

2 Canadian ETFs to Buy and Hold Forever in Your TFSA

Both of these Vanguard ETFs pay monthly dividends from Canadian stocks.

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

TFSA Income: 3 Canadian Dividend Stocks to Hold for a Lifetime

Looking for passive income that lasts? These three dividend stocks offer some of the best long-term growth opportunities, and dividends…

Read more »

A colourful firework display
Dividend Stocks

2 Potentially Explosive Stocks to Buy in July

Just because a company is a blue-chip TSX stock, doesn't mean the growth is all but over. In fact, these…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Dividend Stocks

3 Stocks Set for Dividend Increases This Year

Dividend-growth stocks offer a great mix of income and capital upside. Here are three stocks for more dividend growth ahead.

Read more »