In this piece, we’ll check in on a few Canadian dividend stocks that long-term investors may wish to consider picking up as they look to keep the magic of long-term compounding going strong. Undoubtedly, when it comes to the higher-yielding dividend stocks, the key to maximizing the power of compounding is to keep reinvesting the dividends.
Sure, it might be quite tempting to spend the cash dividends that are coming in. But if you’re a younger investor who doesn’t need the extra income boost at the end of the quarter, perhaps it’s a better idea to put that money back into your favourite dividend (growth) stock.
Let’s have a look at two very different dividend stocks that I view as premier candidates to help you compound your wealth, not only in 2026, but over the next decade and beyond.
Canadian Tire
Canadian Tire (TSX:CTC.A) is one of my top picks to play the Canadian retail scene, which is in a bit of a muted spot right now. Either way, Canadian Tire’s management is doing a great job, and the dividend, currently yielding 4.1%, looks poised for growth in the new year.
In the latest (third) quarter, Canadian Tire reported an outstanding number, seeing revenues rising close to 6%. Of course, it’s too early to tell if the hint of strength is the start of a trend, but I do think many investors are discounting the solid results. The big story going into the new year is whether the retailer can deliver margin gains and high single-digit percentage sales growth. If it can, the stock might be worth a far richer multiple than it’s currently commanding.
Any way you look at it, I view Canadian Tire as incredibly well-positioned to make up for lost time, and the stock looks way too cheap at 12.3 times trailing price-to-earnings (P/E), especially as the “buy Canadian” retail tailwind looks to power the retailer for yet another year.
Agnico Eagle Mines
Agnico Eagle Mines (TSX:AEM) shares haven’t just been overbought; they’ve been one of the hottest large-cap stocks on the entire TSX Index, thanks in part to gold’s historic rally, which might have room to the upside in 2026, as investors grow anxious about mounting macro headwinds.
With the U.S. Federal Reserve’s independence being challenged and uncertainties over the fate of Greenland, perhaps it should come as no surprise that gold and its miners surged higher on Monday’s session. Either way, gold looks like a fantastic hedge, even if it feels like you’re chasing momentum here.
Of course, the momentum could reverse quickly, but given the forces that are driving gold (central bank buying or growing macro anxiety), I certainly wouldn’t be surprised if AEM stock and other premier miners have more gas left in the tank. Either way, the latest rally, I think, has staying power. Though I would be more of a slow, incremental buyer of gold plays, rather than plowing a lump sum into a single name at once. Even gold, a safe-haven asset, carries its own share of downside risks!
