When it comes to investing and picking dividend or growth stocks for your portfolio, one of the most important yet often overlooked lessons from Warren Buffett is to keep things simple.
He’s never been focused on chasing the highest yields or trying to time the market.
Instead, Buffett looks for high-quality businesses that generate consistent earnings, have durable competitive advantages, can grow over time, and, most importantly, he understands.
And when it comes to dividend investing for Canadians, that same philosophy should apply.
It’s not necessarily about finding the highest yield today. It’s about owning companies that can consistently increase their dividends year after year. Because over time, that dividend growth is what really drives long-term income and total returns.
In fact, some companies are so consistent with their operations and cash flow that you can all but expect them to continue raising their dividends annually each year going forward.
So, with that in mind, if you’re looking for reliable dividend growth stocks to buy now, here are two Canadian companies that fit Warren Buffett’s approach.
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A top-tier dividend-growth stock with a dominant moat
One of the best examples of a Buffett-style business on the TSX is Canadian National Railway (TSX:CNR).
The stock operates one of the largest rail networks in North America, moving essential goods across the continent every single day. So, what makes it one of the best Warren Buffett stocks to buy is how difficult it would be to replicate.
Rail infrastructure requires massive upfront investment, regulatory approval, and decades to build out. That creates a huge competitive advantage and allows Canadian National to operate with limited competition.
On top of that, the company has strong pricing power. So, as costs increase or demand rises, Canadian National can adjust its pricing accordingly, which helps protect its margins and maintain steady earnings growth over time.
And that consistency is what supports its dividend. While the yield isn’t the highest, the company has a long track record of increasing its dividend, and those increases are backed by real earnings growth, not forced payouts.
Furthermore, the dividend is intentionally kept lower because Canadian National has enough growth potential to continue reinvesting a significant portion of its earnings back into the business to drive long-term expansion.
That’s what makes it one of the best Warren Buffett stocks to buy now. In addition to the current yield of 2.6% it offers, the stock has increased that dividend every year for three straight decades, and with its strong earnings growth and dominant competitive position, there’s no reason to expect that trend to slow down anytime soon.
A high-yield Warren Buffett stock to buy and hold for the long haul
In addition to CNR, if you’re looking for a higher-yielding, Warren Buffett-style dividend stock to add to your portfolio, Bank of Nova Scotia (TSX:BNS) is another name to consider.
The bank currently offers a yield of 4.6%, significantly higher than its peers, which is one of the main reasons it attracts income-focused investors.
It’s not just about the yield, though. In fact, Scotiabank is one of the largest banks in Canada, with a diversified business that spans retail banking, wealth management, and international operations.
That scale and diversification help support its earnings and allow it to generate consistent cash flow.
And like the other major Canadian banks, it has a long history of paying and increasing its dividend over time. In fact, the bank has increased its dividend annually for 16 straight years now.
So, while the yield is higher than CNR’s dividend, it’s still backed by a business that can continue growing and supporting those payouts.
Of course, it’s not without some concerns. The bank’s international exposure can lead to more volatility, and its growth profile hasn’t always been as strong as some of its peers.
However, much of that is already reflected in the stock’s valuation, which is why the yield is more attractive today. And in the current environment, stable banking demand and strong margins continue to support its earnings and dividend.
So, if you’re looking for dividend stocks you can buy and hold for years, both are excellent options that fit the kind of simple, durable, and predictable businesses that Warren Buffett has always preferred.
