4 Top Canadian Stocks I’d Buy for Dividends and Capital Growth

If you want dividend income and capital growth, these four Canadian stocks are the kind of stocks you want to own long term.

Robin Brown

Author Bio Robin Brown has been a regular contributor to The Motley Fool Canada since January 2020. He began investing in 2009, during the depths of the global financial crisis, and has continued to refine his approach over the years. His investment philosophy emphasizes patience, quality, and identifying businesses with the potential to create lasting value. Robin currently lives in St. Albert, Alberta, where he manages a portfolio of Western Canadian industrial properties and private investments. Having lived in Canada, Norway, and Australia, he brings a broad perspective to his work and investing. Outside of work, Robin enjoys traveling, hiking, hunting, fishing, biking, and cooking for his wife, two daughters, and son. Education Bachelor's degree in Theology Advanced Diploma in Business Management Areas of Expertise Dividend investing, value investing, quality stocks, small-cap stocks, long-term investing, business fundamentals, balance sheet analysis, capital allocation, industrial real estate, and private investments. Social Media Profiles LinkedIn Favorite Investment Quote "Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down." — Warren Buffett

Published June 19, 2025 9:30 pm EDT

Canada is well known for its plentiful array of dividend stocks. Canadians get a dividend tax credit when they collect dividend income from Canadian stocks. As a result, dividends are more tax-advantaged in Canada than in other countries.

While dividends are a tangible cash return, there is no point collecting them if your capital investment is destroyed. That is why I prefer to avoid dividend stocks with high yields (stocks with yields over 7–8%). You might collect some near-term elevated income, but you are at risk of that income getting cut and the stock seriously declining.

It is better to earn a modest dividend and also enjoy capital returns. If you are looking for Canadian stocks that pay dividends and could grow capital as well, here are four to look at now.

dividends grow over time — Source: Getty Images

A value business at a pricey valuation

Dollarama (TSX: DOL) only yields 0.22% today. While that is pretty minuscule, the reason it is so small is because the stock has significantly outperformed the dividend growth in the stock.

Dollarama’s stock is up 311% (32% compounded annually) over the past five years. Its dividend has only grown by a 13% compounded annual growth rate (CAGR) (though that is extremely respectable).

This Canadian stock has executed its growth strategy exceptionally. While its growth in Canada is expected to moderate, its Latin America joint venture and recent Australia acquisition could provide room for long-term growth. Dollarama is a pricey stock, but it has proven its worth over time.

A Canadian insurance stock for the long term

Another Canadian stock for income and growth is Intact Financial (TSX: IFC). It has a 1.7% yield today. IFC stock has increased its dividend for 20 consecutive years. Over the past 10 years, it has increased its dividend by a 10% CAGR.

Intact has delivered strong stock performance. This Canadian stock is up 136% in the past five years. Intact has acquired its way to become the leading auto, home, and business insurance provider in Canada.

Intact has growing divisions in specialty insurance. It is also expanding in the U.K. For a solid business with continued levers for growth, Intact is a great income and growth stock.

A utility stock with above-average growth

AltaGas (TSX: ALA) is more of a traditional boring dividend stock. It operates a gas utility business in the U.S. and a gas midstream business in Western Canada.

While these are not the most exciting businesses, the company has executed a turnaround strategy that has delivered excellent returns. Its stock is up 149% in the past five years.

AltaGas gets a stable income stream from its utility. That utility is delivering sector-leading growth. Its midstream business is growing from strong Asian demand for Canadian energy products.

AltaGas yields 3.25%. It has been growing its dividend over the past few years by a 5–7% annual rate (that should continue ahead).

An undervalued Canadian waste stock

Secure Waste Infrastructure (TSX: SES) is not a dividend-growth story like the above stocks. However, it is a share buyback story. Last year, it bought back 20% of its stock. This year, it is set to buy back 5–6% of its stock.

Secure stock yields 2.6% today. That is despite its stock rising 762% over the past five years. Secure continues to look attractive.

SES stock trades at a significant discount to other waste providers, despite a more attractive growth profile. It is a great stock for income, value, and capital growth ahead.