Dividend Investing: Don’t Underestimate These Stocks Paying Out Over 2%

These dividend stock only yield 2-3%, but don’t discount them for great capital gains and income growth in the future.

| More on:
how to save money

Source: Getty Images

Dividend investing isn’t just about collecting a big, chunky dividend yield. It is about picking stocks that can generate income effectively and sustainably for years and even decades.

Since inflation remains elevated, it is crucial to own stocks that consistently and predictably increase their dividends. These stocks may not always have the largest dividend yield. However, as businesses grow earnings per share, their dividend per share tends to grow in lockstep with the company.

Earnings growth tends to translate into share appreciation. That combination of income and growth is just about as good as it gets for a dividend investor. If you are looking for some stocks with this combination, here are three that yield 2% or more (and are worth buying today).

An infrastructure play for dividends and growth

Secure Waste Infrastructure (TSX:SES) is an attractive stock for income, value, and growth. This stock yields a 2.6% dividend. Over the past few years, Secure has transitioned from a cyclical energy services company to a resilient infrastructure business.

It operates over 80 strategically located landfills and waste treatment sites across Western Canada. It caters mainly to the energy industry and industrial sector. In many instances, it is the only provider of waste solutions in its region. Consequently, it has a very dominant operating moat.

Over 80% of Secure’s income is contracted or recurring. The company generates industry-leading margins and strong free cash flows. Despite all this, this stock trades at a significant discount to other waste management peers.

To bridge the gap, the company has been aggressively buying back stock. It has bought back 7% of its share already in 2025 alone. With Secure, you collect a nice dividend and get to enjoy the opportunity for its valuation to re-rate over time.

A turnaround transportation story

TFI International (TSX:TFII) is the value play contrarian investors should look at. If you look at its stock this year, it doesn’t look too appealing.

Its stock is down nearly 40% this year. The company has been hit by a very challenging freight environment that is compounded by Trump’s tariff/trade war. It also had some operational issues last year.

Luckily, the company has noted some good momentum in correcting those issues. Under the hood, TFI is positioning itself for a freight recovery. When that occurs, earnings could rebound quickly.

In the meantime, TFI yields 2.11%. It has grown its dividend by an 18% compounded annual growth rate (CAGR) in the past five years. Even in a tough market, it generates a lot of cash. It is likely to keep growing its dividend in the future.

A top bank for dividend growth

Many Canadians may not recognize it, but National Bank of Canada (TSX:NA) has been one of the best-performing bank stocks in Canada for years. Its stock is up 126% in the past five years.

National has a key focus on the Quebec market. This market tends to be less cyclical than the rest of Canada. It has been a major reason for National’s strong, consistent results.

National also invests in largely niche areas of the banking market. While these are smaller markets, it can be a dominant player in them.

It just made a big move into Western Canada by buying Canadian Western Bank. National is known for being a great operator. It is likely to reap significant synergies and growth from the transaction over time.

National only pays a 3.3% dividend yield (lower than many competitors). Yet, with a record of over 10% compounded annual dividend growth, your yield on cost could grow quickly after buying this dividend stock.

Fool contributor Robin Brown has positions in Secure Waste Infrastructure and TFI International. The Motley Fool recommends Secure Waste Infrastructure and TFI International. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Middle aged man drinks coffee
Dividend Stocks

10 Years From Now You’ll Be Thrilled You Bought These Outstanding TSX Dividend Stocks

One high-yield play and one steady grower, both primed for 2035. Checkout TELUS stock's 9% yield, and this steady and…

Read more »

a man relaxes with his feet on a pile of books
Dividend Stocks

The Smartest Growth Stocks to Buy With $2,000 Right Now

Looking for some of the smartest growth stocks you can find right now? Here are three top picks to buy…

Read more »

Person holds banknotes of Canadian dollars
Dividend Stocks

Got $1,000? These Canadian Stocks Look Like Smart Buys Right Now

Got $1,000? Three quiet Canadian stocks serving essential services can start paying you now and compound for years.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Best Dividend Stocks for Canadian Investors to Buy Now

Explore the benefits of dividend stock investing. Discover sustainable Canadian dividend growth stocks that can boost your total returns.

Read more »

dividends can compound over time
Dividend Stocks

To Get More Yield From Your Savings, Consider These 3 Top Stocks

Looking for yield? Look no further – these three Canadian dividend stocks could set you up for very long-term passive…

Read more »

Hiker with backpack hiking on the top of a mountain
Dividend Stocks

How to Use Your TFSA to Earn $420 per Month in Tax-Free Income

This fund's monthly $0.10 per share payout makes passive income planning easy inside a TFSA.

Read more »

Real estate investment concept with person pointing on growth graph and coin stacking to get profit from property
Dividend Stocks

1 Canadian Stock to Rule Them All in 2026

This top Canadian stock offers a 4.5% yield, significant long-term growth potential, and an ultra-cheap price heading into 2026.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Planning Ahead: Optimizing TFSA Contribution Room for 2026

Plan your 2026 TFSA now: pick a simple core ETF, automate contributions, and let compounding work while you ignore the…

Read more »