New Canadian investors should have at least a handful of robust dividend payers at the core of their TFSAs (Tax-Free Savings Accounts). Undoubtedly, income and dividend investing may be a bit more appealing to older investors near retirement who actually need the passive income supplement.
But for new and young investors, I’d argue there’s also ample value in going for the top-tier dividend payers rather than going too heavy on the exciting growth plays that show more promise on the front of capital gains potential. Sure, the chance to score a quick double-digit percentage gain in a few months (or even weeks for those who get the timing right) tends to be a bigger draw to new investors rather than the 3% or 4% dividends that the blue-chip dividend stocks tend to offer.
In any case, the dividends do add up over time, and even for those with no intentions of retiring anytime soon, the higher costs of living, I believe, should incentivize some to build a passive income stream for themselves to help out with those nasty price hikes at the grocery store. Sure, inflation may be tame in the last month, but food inflation is still a major issue for many Canadians. Even if food inflation were to grind to a halt, there’s really no undoing the damage done by inflation from previous years.
In this piece, we’ll look at two robust dividend stocks that also happen to be top-notch dividend growers. For young investors who may need less of an income supplement today, dividend growth investing could be a great way to go to if you view the stock market as a tad tech-heavy and perhaps a bit overvalued.
CIBC
The big Canadian banks are back in the spotlight after another solid past few weeks of gains. Shares of CIBC (TSX:CM) are up more than 60% in the last two years and have only recently come off new all-time highs. Despite the fat book of domestic mortgages, I remain a big fan of the number-five bank as it looks to add to recent strength going into the second half.
Sure, a tariff-induced recession means a few more bumps in the road to ride out. But either way, I like the valuation (11.6 times trailing price-to-earnings) and dividend (4.15%) to be had in a name that may still have room to break past the $100 per-share mark. Sure, provisions for loan losses could creep higher as macro unknowns weigh, but at these multiples, I do think much of such provisioning may already be baked into today’s share price.
TD Bank
It didn’t take long for TD Bank (TSX:TD) stock to go from dog to leader, with shares up just shy of 25% year to date. Indeed, 2025 has been a fantastic comeback year for TD, which had been weighed down for many quarters over its money-laundering woes.
The good news for investors is that the year is only (nearly) halfway over. In the second half, I’d expect more of the same from the big bank as new CEO Raymond Chun looks to bring out the best in the $164 billion comeback play that could be one of the very best in the Canadian financial scene.
