Top Canadian dividend stocks can help build a resilient stream of passive income for decades. While several TSX stocks are reliable dividend payers, the recent rally in many of these dependable income stocks has pushed their share prices higher, in turn compressing their dividend yields. Thus, waiting for a temporary pullback allows investors to gain exposure to top dividend stocks at more attractive valuations, enhancing both yield and long-term return potential.
Against this background, here are two top Canadian dividend stocks to buy on a pullback.
Top Canadian dividend stock #1: Emera
Emera (TSX:EMA) is a top Canadian dividend stock to buy on a pullback. Over the past year, the stock has delivered a gain of more than 34%, reflecting resilient earnings, disciplined capital allocation, and steadily rising energy demand across its core markets.
Emera’s regulated electric and natural gas utilities, along with related energy infrastructure assets, position it well to deliver steady earnings. This regulatory framework enables Emera to generate predictable cash flows even amid economic uncertainty. That defensive business model supports both the company’s share price performance and its ability to return capital to shareholders.
Emera has increased its dividend for 19 consecutive years, reflecting its low-risk earnings base and management’s commitment to enhancing shareholder returns.
Emera recently announced a $20 billion capital program spanning 2026 to 2030, designed to expand its regulated rate base and profitability. Management expects this investment cycle to support annual rate-base growth of 7% to 8% and adjusted EPS growth of 5% to 7%. Moreover, management plans to increase its dividend by 1% to 2% annually.
Its investments in solar generation and grid modernization at Tampa Electric, expanded energy storage and transmission infrastructure in Nova Scotia, and ongoing natural gas development at People’s Gas augur well for growth. Further, Emera is likely to benefit from its growing footprint in markets with rising electricity demand.
Overall, Emera offers a compelling mix of stability and income.
Top Canadian dividend stock #2: Bank of Montreal
Bank of Montreal (TSX:BMO) is another top stock to buy on the pullback. Over the past year, shares of this Canadian banking leader have climbed nearly 39%, reflecting strong operating momentum. Further, BMO has an exceptional dividend payment history. It has paid dividends for 197 consecutive years. Moreover, it has grown its dividend at a compound annual growth rate of 5.7% over the past 15 years.
The bank’s diversified business model and resilient deposit base support its earnings across economic cycles. BMO’s core banking, capital markets, and wealth management businesses are all contributing to earnings, creating multiple engines of growth.
Operational discipline is another key strength. BMO’s improving efficiency ratio highlights effective cost management, boosting margins, and providing flexibility to support shareholder returns.
Looking forward, BMO’s digital-first strategy, supported by ongoing investments in artificial intelligence, is designed to modernize operations, improve client engagement, and unlock new growth opportunities. These initiatives should enhance productivity and competitiveness over time. Moreover, its strong balance sheet and high-quality assets augur well for growth.
Overall, BMO is well-positioned to maintain its dividend payments in the years ahead.
