Dividend stocks are great; there are no two ways about it. But when it comes to finding dividend stocks that can survive further rate cuts, it gets a bit tricky. Dividend stocks most likely to survive further rate cuts are those with strong free cash flow, essential services, and business models that don’t rely heavily on high interest income. Think utilities, pipelines, industrial real estate investment trusts (REIT), and defensive consumer names.
These stocks aren’t dependent on high borrowing rates to stay profitable, so they can continue paying, and often raising, dividends regardless of where interest rates go next. So let’s look at two dividend stocks that belong on that rate cut watchlist.
CAR.UN
Canadian Apartment Properties REIT (TSX:CAR.UN) is one of Canada’s largest and most diversified residential-rental REITs. It owns and manages thousands of apartment units, townhomes, and manufactured home communities across major urban centres in Canada, and some holdings abroad. Because it focuses on apartment rentals, a necessity for many Canadians, the demand for its properties tends to stay relatively stable regardless of economic cycles. That gives it a resilient business model. Occupancy rates remain high, rent collections tend to stay steady, and tenant demand doesn’t vanish if people delay buying homes or face higher mortgage costs.
CAR.UN continues to pay monthly distributions, currently at $1.54 per year dished out monthly, which translates to an annual dividend yield of about 4.1% at writing. The REIT recently reported strong occupancy levels and stable funds-from-operations, underpinning its ability to maintain steady payouts. Those monthly payments have been consistent through 2025, which tells investors that CAR.UN’s rental-income model remains robust even in a rising-interest and inflationary environment.
As for why CAR.UN is well-positioned to survive and even benefit from further rate cuts in Canada, there are several factors. Lower interest rates generally reduce borrowing costs across the economy, and this can ease pressure on renters and improve affordability. That tends to support demand for rental housing, boosting occupancy and giving residential landlords like CAR.UN leverage. At the same time, the REIT’s business hinges on recurring rental income rather than interest-rate sensitive financing. Therefore, cash flow remains relatively insulated from rate fluctuations.
CPX
Capital Power (TSX:CPX) is another top choice as a North American power producer focused on natural gas, renewables, and contracted electricity generation. Its portfolio includes long-term power purchase agreements, utility-grade assets, and a growing pipeline of wind and solar projects across Canada and the U.S. What makes CPX stand out is its blend of stable contracted revenue and long-term growth through decarbonization investments. The company operates in an essential sector as electricity demand doesn’t disappear in tougher markets. This provides the dependable cash flow and a defensive profile that income investors often look for.
In its most recent earnings, Capital Power reported steady year-over-year revenue supported by its contracted generation assets. The dividend stock highlighted continued strong performance from its natural-gas fleet and ongoing contributions from renewable projects coming online. Cash flow remained healthy, allowing CPX to reaffirm its dividend outlook and maintain its long-term annual dividend-growth guidance.
CPX is well positioned to survive and grow from rate cuts in Canada from its predictable, contracted cash flow and essential-service nature. Rate cuts typically lower financing costs, which is a major advantage for a capital-intensive utility like Capital Power. Cheaper borrowing makes it easier to fund new renewable projects, refinance existing debt, and maintain dividend growth without stretching its balance sheet. Since its revenue doesn’t depend on interest rates but rather on electricity demand and long-term contracts, CPX remains steady even as rates move.
Bottom line
Not only can you invest in dividend stocks that thrive from rate cuts, investors can get in on a strong dividend as well. In fact, here’s what $7,000 invested in each stock could look like today.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| CAR.UN | $37.40 | 187 | $1.54 | $287.98 | Monthly | $6,993.80 |
| CPX | $61.07 | 114 | $2.69 | $306.66 | Quarterly | $6,962.00 |
All together, if you’re looking for two stable dividend stocks that can provide growth and income even in a rate-cutting environment, these two belong on your watchlist.
