Investing in proven dividend growers that have raised the bar on their payout through all sorts of conditions may not be the most exciting draw into the financial markets, especially these days, with the AI boom and growth investing capturing the hearts and investment dollars of many market newcomers.
Undoubtedly, a growth stock on the move tends to be more exhilarating than a simple, cash-flow-generative, lower-growth company that offers stability and consistent dividend increases every single year. While the dividend growth plays may be more appealing to older investors, I still think there’s reason for younger investors to consider the names, especially for those who don’t need the dividend income today but might in 15–20 years down the road.
Some of the fastest dividend growers don’t have the largest upfront yields, but after many years’ worth of dividend hikes, the payout does begin to act as more of a needle-mover over time. And for those seeking to keep their income streams ahead of inflation, I think the proven dividend growers are tough to overlook, especially in an era where the CPIX (consumer price index excluding more-volatile items) could stay mildly elevated for longer (around 3%).
In any case, here are two dividend growth gems that I view as a bargain in a market environment that’s turned against value and towards full-on growth amid the AI boom.
CN Rail
CN Rail (TSX:CNR) stock is closing in on multi-year lows again, with shares falling to around $128 per share in the past few sessions on seemingly no bad news. In many ways, CNR stock looks broken right here, even at a strong area of technical support.
Undoubtedly, the last couple of quarters were really nothing to get behind amid the industry slump. But now doesn’t seem like the time to give up on one of Canada’s brightest dividend growth titans.
Though tariff uncertainties and a less-than-stellar operating ratio could keep CNR shares depressed for a longer duration, perhaps through 2026, I must say that the valuation has me compelled to keep buying despite all that’s wrong with the railway story nowadays and how relatively unattractive they are to the rest of the market, especially tech and financials, which are gaining amid this bull market.
Just how long will the rails miss out on the glorious market rally?
Time will tell. But good things might be in store for the Canadian economy in 2026, especially if we’re in for some positive surprises on the trade front. At 16 times forward price-to-earnings (P/E), though, I must say shares of CNR are close to the cheapest they’ve been in a long time. And the yield, currently at 2.7%, also makes CNR stock a dividend grower with a very respectable upfront yield.
Even if growth flattens, I expect the dividend to keep powering higher year after year. In 2026, look for a modest dividend hike in the ballpark of 5%. However, once things pick up, I’d look for a return to double-digit percentage hikes. In the meantime, it might be time to start buying before the rails turn higher.
Enbridge
Enbridge (TSX:ENB) is another star when it comes to dividend raises. Unlike CN Rail stock, which is in a historic rut, Enbridge seems ready to keep making new highs again, even though the latest fall dip may be a cause for concern for some. The 5.6% yield is poised to keep on growing, thanks in part to new projects that will keep the energy moving from the Canadian energy patch to the refineries south of the border.
As a less-sensitive energy stock with a steady cash flow stream, I’d be inclined to stick with the name and keep collecting the sweet, growing dividend payments. As Enbridge continues faring well, I’d also look for more generosity come the next payout hike announcement. Over the past decade, Enbridge has rewarded shareholders for their patience, and as shares stall again, perhaps it’s time to think about buying rather than bailing.
