Large-cap firms with stable core businesses often spin off niche divisions into standalone entities to unlock and maximize shareholder value. TC Energy spun off its liquids pipelines business in October 2024. Maple Leaf Foods followed a year later by turning its pork business into a separate company.
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Dividend continuity
TC Energy is a TSX dividend powerhouse, and South Bow Corporation (TSX: SOBO) promises dividend continuity post-spin-off. This large-cap stock has advanced nearly 40% since its first trading day on October 1, 2024.
This $8 billion pure-play liquids infrastructure company is 100% focused on liquids and brownfield expansion. The Blackrod Connection Project, a key infrastructure development, could be ready for in-service by the first half of 2026. South Bow expects to generate new cash flow from the 25-kilometre crude oil pipeline and a 25-km natural gas lateral.
The key investment takeaway for South Bow is the hard-to-replicate assets that connect North America’s strongest supply-and-demand markets. Management commits to focus on strengthening and expanding its strategic corridor. South Bow’s highly contracted cash flows provide stability in dividends and income.
In Q3 2025, revenue declined 14% year-over-year to US$461 million, while net income rose 52% to US$93 million versus Q3 2024. Notably, distributable cash flow (DCF) increased 24% to US$236 million from a year ago.
For 2026, the Board-approved capital budget is US$35 million, with US$10 million as growth capital to complete the Blackrod Connection Project. The balance of US$25 million is earmarked as maintenance capital. Management also projects DCF for the year to be approximately US$655 million.
Because of a strong financial foundation and stable, predictable cash flows, paying a sustainable base dividend is one of South Bow’s top priorities. Prioritizing the balance sheet over new massive builds is another. At $38.79 per share, SOBO pays a juicy 7.2% dividend.
Century-long heritage
Maple Leaf Foods created Canada Packers (TSX: CPKR) to have a direct strategic focus on the pork business, including integrated production from hog operations through processing and sales. If you invest in CPKR today, the share price is $15.89, with a corresponding dividend offer of 5.8%.
The $472.5 million company aims to be the global standard in sustainable pork (antibiotics-free). According to the Executive Chairman of the Board, Michael H. McCain, the journey as a public enterprise has begun. “This is a unique business with a unique business model. Our strategic direction is clear, and the prospects for profitable growth are enormous.”
In Q3 2025, sales and earnings increased 14.7% and 31.7% to $481.8 million and $25.6 million, respectively, versus Q3 2024. On a year-to-date basis, free cash flow climbed 108% year-over-year to $134.3 million. Other positives for the stock include a century-long heritage and a dominant position in the premium protein market.
Income and growth
Some analysts say spin-offs sometimes outperform in the first 1–3 years. South Bow and Canada Packers could prove them right in 2026. SOBO is an energy infrastructure play, while CPKR has a strong growth profile. Both stocks are good options for income and growth investors.
