Canada’s best dividend icons might not be the most exciting of stocks in the world, but they have a profoundly impressive track record of paying (and raising) dividends. And when the times get tough, and the bear market is ready to make a return, perhaps taking over after the bull’s had its run for a few years, it’s the steady defensive dividend plays that tend to be the new “hot” asset in town. If there’s a rush for safety, low beta and dividends could have a chance to become stellar once again. When the bear is in control, defence is what I believe wins championships.
So, if you’ve neglected playing defence and are too overweight in the tech names, perhaps a bit of rebalancing is in order, especially before a correction has a chance to come knocking. So, if you’re not sure what to make of the AI bubble talks, I’d argue that one doesn’t need to be drastic when it comes to diversifying beyond tech. Perhaps trimming a few 2024-25 winners here and there can be good enough, as you look to buy some of the long-forgotten dividend icons, many of which could catch a leg higher as boring becomes beautiful again.
Though there’s no formal definition of what a dividend icon in Canada is, the following dividend stocks, I think, fit the definition for a reliable stock that’s worth hanging onto for years at a time, not only through 2026, but perhaps well into the 2030s.
Canadian Utilities
Canadian Utilities (TSX:CU) has been raising its dividend well before many investors were born. The streak spans many decades, and it’s unlikely to be broken anytime soon, even if the TSX Index were to crash at some point. Either way, Canadian Utilities is one of those sleep-easy names that you can hold and not need to follow up with all too much. Unlike the tech scene, the business isn’t as dynamic, and not a whole lot changes about the long-term thesis in any given year!
That’s the beauty of boring utilities! The stock trades at 17.7 times forward price to earnings (P/E), which is a fair price to pay for one of the steadiest 4.2% yielders in the equity markets!
The kicker? The stock recently blasted off to a new all-time high above $44 per share. It’s the new momentum play on the block, and I think it’s a great buy for numerous “types” of investors. The young and nervous, the value-chasing momentum seekers, or the content dividend seekers looking to go beyond Guaranteed Investment Certificates (GICs); there’s something for everyone with CU stock.
Fortis
Fortis (TSX:FTS) is probably the closest thing to a dividend icon. Like Canadian Utilities, it’s on a multi-decade dividend-growth streak, one that’s pretty much unbreakable. Shares are having a breakout moment as well, with the name flirting with $73 per share, thanks in part to its low-risk growth plans and potential AI-induced upside, which, in due time, will hit the energy grid.
I’m a huge fan of FTS stock as a riskier alternative to GICs and low-duration bonds. The 3.46% dividend yield seems slim, but it’s far more appealing than GICs, at least in my view. And there’s capital gains upside to be had as well! As is the case with low-beta (0.40) stocks, they’re likely to be less-moved by the fearful market headlines that tank the S&P on any given day. Shares held up well on Tuesday, as markets dipped over Trump tariffs and Greenland worries. That’s steadiness that only a few names can provide!
