2 Canadian Dividend Stars Set for Strong Returns

These two “dividend stars” can pay you monthly while their steady, cash-generating businesses quietly work on long-term total returns.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published December 31, 2025 3:30 pm EST

| More on: EIFGEI

Key Points

Dividend stars can deliver strong total returns by paying reliable income now
Exchange Income earns steady cash from essential aviation services and niche manufacturing
Gibson Energy generates mostly fee-based infrastructure cash flow

Dividend stars can create strong returns as these quietly do two jobs at once. The stocks pay you consistently. This smooths out the emotional ups and downs of the market. And they compound in the background as payouts are reinvested or simply reduce the need to sell shares later.

Over long periods, that steady cash flow often matters more than short bursts of price growth. When dividends rise alongside earnings, investors benefit from income today and a higher valuation tomorrow. This is why dividend stocks have historically delivered surprisingly competitive total returns.

Canada Day fireworks over two Adirondack chairs on the wooden dock in Ontario, Canada — Source: Getty Images

EIF

Exchange Income (TSX:EIF) is a classic example of a dividend star built for durability. The dividend stock operates a diversified group of aviation and manufacturing businesses. Many of these provide essential services under long-term contracts. Its aviation segment includes regional airlines and medevac services that operate regardless of economic cycles. Meanwhile its manufacturing businesses supply niche products tied to defence, aerospace, and infrastructure. This mix has helped EIF produce steady revenue even during periods when growth stocks or cyclical names struggled.

From a performance perspective, EIF has rewarded patient investors by steadily growing cash flow rather than chasing rapid expansion. The dividend stock isn’t flashy, but it has shown resilience during downturns and recoveries alike. Earnings continue to support the dividend, and management remains disciplined about acquisitions, focusing on businesses that add immediately to cash flow. That consistency is a big reason why the market tends to treat EIF as a reliable long-term holding rather than a trade.

Valuation is another part of the dividend star appeal with EIF. It typically trades at a reasonable multiple relative to its cash-generating ability, reflecting its mature, essential-business profile rather than speculative growth. The dividend yield is attractive without being extreme, and the payout has been supported by recurring revenue and predictable expenses. For investors seeking strong total returns, that combination of fair valuation, dependable income, and modest growth can quietly add up over time.

GEI

Gibson Energy (TSX:GEI) offers a different but equally compelling dividend star profile. The dividend stock operates energy infrastructure assets such as terminals, pipelines, and storage facilities, many of which generate fee-based revenue. This structure reduces direct exposure to commodity price swings and shifts the focus toward volumes and long-term contracts. As a result, GEI’s cash flow tends to be steadier than that of producers, which helps support its dividend through energy cycles.

In terms of performance and earnings, GEI benefits from ongoing demand for North American energy infrastructure. Even when oil prices fluctuate, producers still need to move and store product. This keeps utilization levels relatively stable. Earnings have reflected that stability, and management emphasizes maintaining balance sheet strength while continuing to invest selectively in growth projects. That approach has allowed the company to sustain and gradually grow its dividend over time.

Valuation and income are where GEI really stands out as a dividend star. The dividend stock often trades at a level that reflects caution toward the energy sector as a whole, which can keep yields elevated despite solid fundamentals. For long-term investors, that creates an opportunity to lock in income while waiting for modest growth and potential multiple expansion. The dividend is a core part of the investment case, and when combined with steady infrastructure cash flows, it can drive strong total returns without relying on rising oil prices.

Bottom line

Taken together, dividend stars like EIF and GEI show why income-focused investing does not have to mean settling for weak returns. When dividends are supported by real businesses, disciplined management, and steady cash flow, the foundation for long-term wealth creation is formed. In fact, here’s what $7,000 invested in each can bring in today.