Trump’s global tariffs war has raised concerns that inflation may start to tick up over the remainder of the year. If you are retired or rely on investment income for your living, inflation can be a real challenge. Your income is fixed, but your costs are increasing (meaning you end up with less cash leftover at the end of the month).
If you are worried about inflation, dividend-growth stocks are ideal. You can buy stocks that raise their dividend by several times the rate of inflation. The increase can more than offset the effects of inflation.
Many of these stocks may not have the highest dividend yield. However, your capital is likely to grow modestly, and your income stream should rise by an attractive rate as well. Here are three top dividend stocks I’d buy to beat inflation.
A transport stock that will overcome inflation
TFI International (TSX:TFII) only pays a 2% dividend yield. However, its dividend has been an inflation-beater over long periods. Its dividend has risen by a 14% compounded annual growth rate (CAGR) over the past 10 years and by an 18% CAGR over the past five years.
TFI has a transport and freight empire that extends across Canada and the United States. The company has a record of great long-term returns. Its stock is up 300% in the past 10 years.
However, the combination of a nasty freight recession and underperforming U.S. operations caused the stock to decline 36% this year.
Fortunately, TFI has been making a turnaround. This quarter, it showed nice progress in several operational metrics. It produced $182 million of free cash flow in the quarter.
It is planning to use excess capital to buy back stock while the shares are depressed. Likewise, the company should be primed to provide shareholders with another increase to its base dividend in 2026.
A financial stock with a growing dividend
Another stock that should substantially beat inflation is National Bank of Canada (TSX:NA). It yields 3.3% today. The company has grown its dividend per share by an 8.6% CAGR over the past 10 years and by a 10% CAGR.
National Bank has been Canada’s best-performing bank stock for a reason. It has avoided several slip-ups that other major Canadian banks have run into over the years. The company has focused on niches where it can really prosper and maintain/grow its competitive advantage.
It is only in the early innings of integrating Canadian Western Bank. Investors should expect decent growth from this western expansion. It’s a solid stock to fight inflation with.
An energy stock to beat inflation
Canadian Natural Resources (TSX:CNQ) is a dividend growth legend in Canada. This stock yields 5.33% right now. It has grown its dividend by a 17% CAGR over the past 10 years and a 23% CAGR in the past five years.
Canadian Natural has decades of reserves and a low-cost operating model. This company can generate substantial cash flows in most environments.
It just holds all the merits of a high-quality business: a strong balance sheet, a highly invested executive team, great assets, and great operations. Recent acquisitions further solidify its dominance in the Canadian energy space.
Canadian Natural is a great stock for a growing dividend. Hold this stock for the long term, and you are likely to beat inflation.
