Finding the top dividend-growth stocks in Canada isn’t as simple as screening for high dividend growth. True dividend-growth investors want consistency, longevity, and the financial strength to keep those increases coming through thick and thin. Investors also don’t want to pay for pricey stocks.
With that in mind, I set out to identify the most reliable dividend-growth names today by screening for Canadian stocks that delivered the highest one-, three-, five-, and 10-year dividend-growth rates.
The goal was simple: be objective. Let the math do the talking.
Guardian Capital Group and Imperial Oil initially looked promising, each showing up in three of the four dividend-growth time frames. But both came with meaningful caveats.
Guardian Capital is being acquired by Desjardins Global Asset Management, introducing too much uncertainty for long-term dividend-growth investors.
Meanwhile, Imperial Oil has soared roughly 57% year to date, leaving it trading more than 20% above the analyst consensus price target. Neither situation is ideal for investors looking for dependable value today.
This process left two names that stood out: Alimentation Couche-Tard (TSX: ATD) and goeasy (TSX: GSY) — the only stocks to appear across all four dividend-growth lists and still trade at valuations that offer potential upside. These two companies not only have excellent dividend-growth histories but also have catalysts that support continued increases.
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Alimentation Couche-Tard
Alimentation Couche-Tard may not generate headlines the way tech or energy stocks do, but few Canadian companies deliver its level of consistency and growth.
At around $76 per share, the stock trades at a forward price-to-earnings (P/E) ratio of about 18.5 — reasonable for a global operator with a long runway. Analysts see near-term upside of roughly 12%, but the real story lies much deeper.
Couche-Tard’s 15-year dividend-growth rate sits at an astonishing 25.7%. The company just raised its dividend in late November by more than 10%, continuing a tradition of shareholder-friendly capital allocation.
This growth comes from decades of disciplined mergers and acquisitions, which have expanded its convenience-store empire to around 17,270 locations across 29 countries.
What could drive more growth going forward is the company’s shift toward tapping more into organic growth. Analysts expect earnings per share (EPS) to climb at least 10% annually over the next few years.
While the stock’s current dividend yield is modest at 1.1%, its ability to raise that payout at double-digit rates makes it one of the most compelling dividend-growth names in Canada today. Couche-Tard is a reasonable buy for long-term compounding — and an even better one on market weakness.
goeasy
goeasy tells a different story — one of volatility, sharp drawdowns, and exceptional long-term returns for investors willing to stomach the risk and turbulence.
As a non-prime consumer lender, goeasy faces unique risks tied to funding costs and consumers’ financial health. This year, those pressures intensified.
A short-seller report and disappointing third-quarter results drove diluted EPS down 21% to $9.47, triggering a nearly 46% drop from peak to trough in the stock.
But if history is any guide, these steep pullbacks have consistently created outstanding buying opportunities.
Over the past decade, goeasy delivered a diluted EPS growth rate of 27.6%, yet the stock still trades at a long-term normal P/E of roughly 11.8 due to the risks in the business. Yet, this is a low P/E for a company with this growth profile.
Its dividend growth is particularly impressive: a 10-year average increase of 30%, the highest among Canadian dividend-growth stocks.
Trading around $136 per share and yielding 4.3%, goeasy looks undervalued by about 32%. Volatility may persist in the coming quarters, but for investors comfortable with higher risk — and equipped with a long time horizon — the stock is a compelling buy now, with potential for even better entry points if weakness continues.
Investor takeaway
Canada offers several strong dividend-growth performers, but Alimentation Couche-Tard and goeasy jump out as the top buys today. Both companies consistently land among the best one-, three-, five-, and 10-year dividend growers while still trading at good valuations.
Couche-Tard provides steady, global growth with decades of proven execution, while goeasy offers higher risk and higher reward through powerful earnings and dividend expansion potential over the long haul. Together, they represent two compelling opportunities for investors seeking long-term income growth and capital appreciation in the Canadian market.
