Interest Rates Are on Hold, and That May Not Last. These 2 TSX Dividend Stocks Are Worth Owning Either Way.

Rate cuts can boost dividend stocks two ways: making yields look better and lowering refinancing pressure for cash-flow businesses.

| More on:
Key Points
  • AltaGas offers steady utility and midstream cash flow with clear 2026 guidance, but its yield is relatively modest.
  • Manulife combines a stronger yield with dividend growth and capital strength, though results can swing with markets and rates.
  • The best setup is owning dividends you trust before cuts, not trying to time the first rate move.

The Bank of Canada held rates at 2.25% this week — for the third consecutive meeting — but this time, the tone shifted. Governor Macklem warned explicitly that rising oil prices and economic weakness create a dilemma, and that the bank could respond in either direction. Bond markets are already pricing in a small probability of a hike by October.

Rate cuts may come eventually, but they are no longer the base case they were three months ago. That makes dividend stocks that can earn their payouts in a hold environment — and still benefit if cuts eventually arrive — worth more than ever. When cuts do come, markets rarely wait for the headline. The businesses worth owning now are the ones that don’t need perfect timing to justify the dividend.

staying calm in uncertain times and volatility

Source: Getty Images

ALA

AltaGas (TSX: ALA) sits in a sweet spot for a rate-cut cycle. It sells essential energy services that people use no matter what. The dividend stock runs regulated utilities in the U.S. and a midstream business that moves and exports natural gas liquids, with a footprint tied to North American energy demand and infrastructure buildout. Over the last year, it kept signalling confidence, including a 2026 annual dividend set at $1.34 per share, and framed its next phase around steady, boring execution rather than big promises.

The earnings and valuation picture supports the “paid-to-wait” case. For 2026, AltaGas guided to normalized earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.93 billion to $2.025 billion and normalized earnings per share (EPS) of $2.20 to $2.45. this implies the business expects to keep growing even without perfect macro conditions. Recently, it traded at 19 price-to-earnings (P/E) with a dividend yield of 2.86%. The Bull case? Lower rates ease interest expense pressure and improve equity appetite for infrastructure-like cash flow.

AltaGas is the infrastructure-and-utility pick for investors who want income that holds up when rates are stagnant and gets a bonus lift when cuts eventually arrive — the 2026 earnings guidance does not depend on the BoC moving at all.

MFC

Manulife Financial (TSX: MFC) brings a different kind of rate sensitivity, and that can help your portfolio balance. It sells insurance, wealth solutions, and asset management, and it earns money by investing premiums and managing long-duration liabilities. Over the last year, the dividend stock delivered the kind of headline dividend investors love, raising its quarterly dividend by 10.2% to $0.485 per share, starting with the March 2026 payment, which signalled confidence in capital generation and earnings resilience.

The earnings and valuation backdrop looks supportive if the market starts chasing yield again. Manulife reported 2025 core earnings of $7.5 billion, with core EPS of $4.21, and net income attributed to shareholders of $5.6 billion. Recently, it traded 15.3 times earnings, with a dividend yield at 3.78%. The upside is that lower rates can improve sentiment and still leave room for growth through better wealth flows, steady insurance demand, and disciplined capital returns. All while earning income from this dividend stock.

Manulife can earn in multiple rate scenarios. Investment income can benefit from rates staying elevated, while a 10.2% dividend increase and 15x earnings valuation give income investors a durable anchor regardless of when the BoC moves next.

Bottom line

Whether the Bank of Canada holds, cuts, or even raises interest rates, the businesses worth owning are the ones that earn their payouts without needing a specific rate outcome to deliver. AltaGas offers steady infrastructure and utility cash flow with clear 2026 targets that do not depend on rate relief. Manulife pairs a 10.2% dividend increase with a business model that can earn through multiple rate scenarios. Even $7,000 in each starts earning income today.

COMPANYRECENT PRICENUMBER OF SHARES YOU COULD BUY WITH $7,000ANNUAL DIVIDENDTOTAL ANNUAL PAYOUTPAYOUT
FREQUENCY
ALA$47.50147$1.34$196.98Quarterly
MFC$47.08148$1.81$267.88Quarterly

You don’t need to predict the exact date of the next rate cut — or whether cuts are coming at all. You just need to own dividends you can trust through whatever the Bank of Canada decides next.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

woman checks off all the boxes
Dividend Stocks

5 CRA Red Flags to Watch in Retirement Tax Returns

A few common retirement-return mistakes can trigger CRA follow-up, and most are avoidable with a quick pre-filing checklist.

Read more »

A worker overlooks an oil refinery plant.
Dividend Stocks

An Ideal TFSA Stock With a Steady 4.4% Yield

Here's why this defensive growth stock offering a yield of roughly 4.4% today is such an ideal investment for a…

Read more »

Dividend Stocks

3 Undervalued Canadian Dividend Stocks to Buy Now and Hold for Years

Three Canadian value ideas offer a mix of growth, income, and a real-asset discount, without relying on a “too-good-to-be-true” yield.

Read more »

House models and one with REIT real estate investment trust.
Dividend Stocks

1 Dividend Stock I’d Feel Good About Owning for the Next 7 Years

Choice Properties REIT offers a reliable 4.8% yield backed by Loblaw leases. Here is why this Canadian dividend stock is…

Read more »

holding coins in hand for the future
Dividend Stocks

My 2 Favourite Stocks for Monthly Passive Income

Unlock the potential of monthly dividends with Canadian stocks, focusing on REITs and royalty companies for consistent cash flow.

Read more »

hand stacks coins
Dividend Stocks

3 Dividend Stocks Yielding +4% Canadians Can Own Even When Growth Falls Out of Favour

These three dividend stocks are worth considering for passive income and long-term growth, particularly on market dips.

Read more »

arrows hit bullseye on target
Dividend Stocks

This 5.4% Dividend Play Pays Every Single Month

H&R REIT offers investors a 5.4% yield paid monthly. Here's what its Q1 earnings call reveals about occupancy, asset sales,…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

An Easy Way to Use Your TFSA Contribution Room to Build $757 in Annual Cash Flow

If you're looking to generate tax-free annual cash flow, put your available TFSA contribution room into these top dividend stocks.

Read more »