Dividend stocks are starting to look like an attractive asset, given the volatility that is starting to hit Canadian stocks. While the TSX Index has largely been soaring higher in 2025, many stocks have experienced painful pullbacks.
Dividend stocks are not immune to broad market pullbacks. Yet the best dividend stocks can pay and even grow their dividend streams through tough markets. As a result, your dividend income can be a powerful neutralizer against near-term drawdowns.
If you are looking for high-quality dividend stocks to hold through any market tumult, here are three of the best in Canada.
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A top energy stock for dividends
Canadian Natural Resources (TSX:CNQ) is a top dividend legend in Canada. 25 years of consecutive annual dividend increase by a 21% compounded annual growth rate (CAGR) is incredibly impressive.
Canadian Natural might operate in the cyclical energy industry. However, it has built an energy production platform that should last for decades. Currently, its energy reserves are expected to last for at least three decades ahead.
This dividend stock generates tonnes of cash. Last quarter, it delivered record production and $3.9 billion of cash. The company yields 4.9% today. Watch your yield on cost grow as this top Canadian stock continues to execute with precision.
A top real estate stock for income
First Capital Real Estate Investment Trust (TSX:FCR.UN) has built an enviable portfolio of some of Canada’s best grocery-anchored retail properties. Its mix of essential service tenants provides a very defensive revenue mix, especially if the economy were to weaken.
First Cap has been working on a turnaround strategy over the past few years. It has been selling off non-core assets and lowering leverage. The REIT has over 97% occupancy and mid-single-digit rent growth.
First Capital stock yields 4.6%. This dividend stock remains undervalued. As it executes its strategic plan, you may get some upside from the stock as well.
A top Canadian bank stock for dividend growth
National Bank of Canada (TSX:NA) might be the smallest Big Six bank, but it has been the best performer. Its stock is up 130% in the past five years and 300% in the past 10 years.
National Bank has built a very strong franchise in Quebec. That market tends to be less volatile than others in Canada. Likewise, it has been very successful in wealth management and capital markets.
Speaking of niches, it just made a big move into Western Canada. If it can replicate its success out east, there could be attractive upside ahead for shareholders.
National has a sector-leading dividend-growth rate. This stock has grown its dividend by an 11% CAGR in the past five years and a 10% CAGR over the past 20 years. It only yields 2.9% However, for one of the best financial platforms in Canada (with leading dividend growth), it’s a fair compromise.
The Foolish bottom line
Dividend stocks like Canadian Natural, First Capital, and National Bank all serve an essential part in the Canadian economy. They are excellent buys for their defensive characteristics and attractive dividends.
