The Bank of Canada (BoC) recently brought down interest rates once again, bringing the rate now to 2.5%. And sure, investors can still find guaranteed investment certificates (GIC) that are even as high as 5%! But, how long can those rates last? And could there be investments that provide just as much security, with dividend income on top?
In short: yes. Today, we’re going to look at three of those options. Namely, Fortis (TSX:FTS), Brookfield Renewable Partners LP (TSX:BEP.UN), and Canadian National Railway (TSX:CNR).
FTS
First, let’s look at the classic dividend utility stock, one that has increased its dividend for 50 consecutive years. Nearly all of Fortis’ earnings come from regulated assets across North America. This means cash flow is highly predictable and indeed growing. In fact, the dividend stock recently invested $26 billion through 2029 to grow its rate base from $39 billion to $53 billion.
The projected compound annual growth rate (CAGR)? That’s 6.5% during the period through earnings and cash flow. This directly underpins management’s guidance of between 4% to 6% in annual dividend growth through 2029. Currently, FTS stock yields 3.7%, lower than the 5% GIC. But the key advantage here is growth. With dividend hikes locked in and the stock price climbing, it’s a slow burn that could set your portfolio on fire.
BEP
Speaking of growth, BEP offers that in spades, especially within the renewable infrastructure sector, which now operates on a global scale for the company. The dividend stock has one of the world’s largest clean-energy portfolios through its hydro, wind, solar, nuclear and battery services. Furthermore, it holds marquee contracts with Google and Microsoft. These projects are expected to create thousands of megawatts of renewable energy.
During the second quarter, BEP reported record funds from operations (FFO) at $0.56 per unit, targeting a 10% increase in FFO growth in 2025. What’s more, management guided 5% to 9% annual distribution growth. And with a 5.8% dividend yield, that’s already higher than GICs!
CNR
Finally, CNR may not be a top high yield pick with a dividend yield at around 2.7%. Yet it’s one of the best dividend growth stories out there on the TSX today. The dividend stock consistently delivers returns on equity (ROE) above 20%, with an operating ratio improving to 61.7% in the second quarter of 2025, even with revenue dipping.
Guidance for 2025 remains strong, with earnings per share (EPS) growing at mid-to-high single digits, and dividend growth running at 8% to 10% growth per year. Compared to a 5% GIC, CNR does have a lower yield. But looking ahead a decade or two, the steady dividend hikes combined with strong capital gains make it far outpace GICs. CNR is, after all, part of a duopoly, providing it with irreplaceable infrastructure that provides a defensive strategy for decades.
Bottom line
GICs have the right time and place, but when they drop, it’s time to look at other investments. FTS holds a safe and regulated investment with a solid yield. BEP offers a higher yield, plus growth, though a bit more volatile. Finally, CNR has a small yield, but is the best dividend growth and capital appreciation story. Together, all three provide a diversified growth story. One that GICs simply cannot offer.
