Whenever you have a chance to pounce on a dirt-cheap dividend champ at a slight discount, you may wish to load up and store it away in your TFSA (Tax-Free Savings Account), for a very, very long period of time – if not forever. Indeed, as far as semi-permanent holdings go, the following trio of dividend payers, I think, are worth holding for the next couple of decades.
Why? It’s not just capital gains potential and the wide economic moat protecting their fundamentals that make the shares worth owning for the long haul. The following names have fast-growing dividends, which could amount to so much more over the span of many decades. Indeed, for true long-term TFSA investors, it’s these dividend growers that keep giving back to your TFSA which you wouldn’t even want to sell, even if you’re looking to raise some cash from your TFSA holdings!
Without further ado, let’s get into the names which, I think, are worth buying as soon as today!
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CN Rail
CN Rail (TSX: CNR) and the rest of the rail group are down and out right now. And while I’m no fan of the downgraded outlook and current management team, I do think that CN Rail remains a fantastic buy for the incredible and extensive rail assets you’re getting. Indeed, it has one of the widest moats in North America. And when the transports do get rolling again, I expect CNR shares will be quick to recover from this long, drawn-out bear market, which has spanned around a year and a half now.
And with chatter about railway industry consolidation picking up, I think CN Rail might be able to make a massive deal south of the border that rhymes with the Kansas City Southern deal made by its Canadian rival CP Rail (TSX: CP) a few years ago. Indeed, I think a rail M&A boom could be in store for 2026. While valuations aren’t the lowest, I do think CN Rail could be in the market for a big merger that further expands its presence in the U.S. market.
Will such a deal come cheap? I don’t think so. But this could be one of the last chances to further widen that moat. And with the right talent in place, perhaps next-level synergies can be achieved. Either way, 18.1 times trailing price-to-earnings (P/E) seems too low a price for the rail firm that could be close to bottoming out after sliding over 20% from its highs. With a 2.7% dividend yield, it hasn’t been this rewarding to buy CNR in a long time!
CPKC
CPKC is another Canadian rail that has really struggled to break out in recent years. The stock is down over 13% from its all-time high and appears to be choppily consolidating, struggling to find direction. I think buying the dip could prove wise, especially as its legendary CEO, Keith Creel, looks to improve the operating economics despite industry headwinds. Given CPKC’s relative outperformance, I’d be inclined to give CP the edge over CNR. However, at 23.4 times trailing P/E, shares go for a hefty premium.
Either way, CN’s fatter dividend and solid record of dividend growth, I think, make it a better bet for those in the market for a hard-hit rail stock. Though CP’s 0.86% yield is too small to move the needle for most income investors, I wouldn’t sleep on the dividend growth potential, especially once tariffs are (hopefully) gone and the Canadian economy bounces back.
