Investors don’t have to choose between dividend income (that could provide steady returns) and long-term capital growth. The smartest TSX investors know you don’t have to sacrifice one for the other. The right businesses can generate dependable income today while compounding shareholder value for years to come.
If you’re looking to collect income while positioning your portfolio for meaningful upside, these TSX stocks deserve serious attention right now.
Source: Getty Images
Proven compounders with growing dividends
When it comes to blending income and growth, Brookfield Asset Management (TSX:BAM) is an excellent choice. After pulling back more than 16% from recent highs, the global alternative asset manager looks increasingly attractive. It currently yields close to 3.9% after raising its quarterly dividend by nearly 15% — a strong signal of management’s confidence in future cash flow.
BAM’s fee-related earnings continue to expand as institutional capital flows into infrastructure, renewable power, private equity, and real estate strategies. Even assuming a conservative 10% annual growth rate, investors could be looking at total long-term returns of about 14% when combined with the dividend. With shares trading 15% below consensus price targets, there’s also room for valuation expansion.
Another good dividend stock idea to investigate is Intact Financial (TSX:IFC). The property and casualty insurer has industry-leading returns on equity and quietly built a two-decade track record of dividend growth. Its most recent dividend increase of 10.5% suggests management’s confidence in the business despite a 15% pullback in the stock from the 2025 highs.
At around a 2.2% yield, Intact may not be a top income stock. But long-term earnings growth layered on top of that dividend can drive long-term total returns of about 12% per year. Trading at a 17% discount to the analyst consensus target, it offers both growth potential and the bonus of growing dividend income.
A growth story that still pays you
Premium Brands Holdings (TSX:PBH) offers a more entrepreneurial income-and-growth profile. The specialty food producer and distributor has been aggressively expanding in the U.S., integrating the Stampede Culinary acquisition and expects to unlock operating synergies.
If management successfully executes on revenue growth, margin expansion, and deleveraging, the stock could see substantial upside over the next few years.
Meanwhile, investors collect a dividend yield near 3.3%, supported by improving cash flows. It’s a compelling combination of income and operational turnaround potential.
A high-yield turnaround idea
Then there’s TELUS (TSX:T) — arguably the most intriguing opportunity of the group. With a dividend yield hovering near 9%, the stock reflects significant skepticism from the market.
Leadership transition adds another layer of uncertainty. Victor Dodig, former CEO of CIBC, will be stepping into the top role on July 1. His track record illustrates that he could help turn around TELUS’s situation.
From the Globe and Mail article, “How Telus’s unexpected CEO change came about”: “Over a decade at the helm of CIBC, Mr. Dodig delivered the largest takeover in the bank’s history and rebuilt the balance sheet and culture, moving the bank from worst to first on customer satisfaction.”
Some analysts believe that under new leadership, TELUS could pursue asset sales or even reduce its dividend to accelerate debt reduction. While a dividend cut may initially disappoint investors, it could ultimately strengthen the company’s financial position and restore long-term confidence.
For patient investors willing to hold three years or longer, total returns could come from a mix of reset dividends and capital appreciation.
Investor takeaway
If you want both income and growth, focus on businesses with durable competitive advantages, disciplined management, and visible long-term expansion.
Brookfield Asset Management and Intact Financial offer proven dividend growth with compounding potential. Premium Brands provides operational upside alongside income. TELUS presents a higher-risk, higher-reward turnaround anchored by an elevated yield.
Together, these TSX stocks demonstrate that you don’t have to choose between income and growth — you can build a portfolio designed to deliver both.
