The top dividend icons of the TSX Index are worth sticking with, even as the TSX Index becomes a tad overheated, overbought, and maybe overdue for a bit of a steep pullback. Undoubtedly, when it comes to top-tier dividend players, I think investors should seek to hang onto them for more than five years. Of course, when you factor in the dividend growth, investors may very well be setting themselves up for a nice income stream going into (early) retirement. Of course, it’s going to be tough for the TSX Index to top or match the gains of 2025.
Though there’s still probably more room to run after an impressive 27.4% annual gain, I would reset my expectations and gravitate more towards the less-appreciated, lower-cost dividend stocks, especially the ones that investors have given up on. In this heated market, you don’t have to look too far for performance, but ditching last year’s laggards, especially the ones that continue to pay rich dividends, for the high-momentum heroes, I think, might be a strategy that yields results that are less than stellar in the new year.
So, whether you’re looking for ideas for your next TFSA contribution or you’re serious about rotating out of overbought names that might be at greater risk of a decline, the following pair of iconic dividend stocks, I think, has what it takes to do well despite their market-trailing past year of returns. Where some see “dead money,” others see an opportunity to get more for less. And in the case of these names, I must say the risk/reward is starting to get enticing.
Source: Getty Images
Brookfield Renewable Partners
It was quite a turbulent year for the renewable stocks, and Brookfield Renewable Partners (TSX: BEP.UN) shares were certainly not spared from the wild volatility. With shares back in correction territory, now down more than 16% from those November 2025 highs, I think it’s time to start thinking about initiating a position as shares approach a level of support close to $35 per share. Today, the dividend yield is now sitting at a bountiful 5.7%. And it’s a payout that looks primed for further growth as the firm moves ahead with various wind and solar projects.
Of course, buying dips can be tricky, especially if the rest of the market is running higher. Either way, I think you’re getting a great deal at today’s multiples, with shares trading at 1.2 times price-to-sales (P/S) or 2.2 times price-to-book (P/B).
Northland Power
Northland Power (TSX: NPI) stock seems to have settled a bit since shares fell off a cliff back in November following a surprise dividend cut that few saw coming. Undoubtedly, nobody wants to see their payout be reduced, but the 30% decline, I think, was overdone and could present an opportunity for investors who care more about value than yield. The company’s latest Investor Day was pretty solid and outlined growth initiatives that I think should renew investor enthusiasm.
Sure, a smaller payout is never great, but given there are better ways to put the cash to work, I’d not give up on the name, as it seeks capital expenditures north of $6 billion in the next five years. As Northland returns to the growth track, perhaps income investors with a long-term horizon may wish to forgive the name for the dividend reduction. In my view, Northland is still an iconic dividend value pick, even if it’ll take a while for investors to move on from a horrid 2025.
