The markets are volatile. Tech stocks are sliding, oil stocks are rising, and uncertainty around the Iran war has made investors jittery. Hence, investing in oil stocks is a gamble at the moment. In these volatile markets, non-energy Canadian dividend stocks can help you produce steady returns from your investments.
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Finding a steady Canadian dividend stock in volatile markets
Several dividend-paying stocks slashed dividends or changed their dividend policy in the last five years. At such times, finding a steady dividend stock requires a keen look at the fundamentals.
Look for a dividend stock that meets the following criteria:
- A share price trading near its average price at the right valuation
- A dividend payout ratio not above 85%
- Earning steady profits and cash flows
- Manageable debt
One Canadian dividend stock that could help steady a volatile portfolio
One such stock is CT REIT (TSX: CRT.UN). The REIT is not directly affected by the geopolitical tensions that are keeping the markets volatile. In fact, its business model is shielded from the volatility thanks to the retail business model of its parent company, Canadian Tire (TSX: CTC.A).
Canadian Tire, in partnership with Suncor Energy, retails petroleum through Petro-Canada. The retailer also supplies auto parts, tires, auto accessories, batteries, and auto fluids. While this segment generates resilient revenue, it also caters to seasonality, selling sports and seasonal home essentials. In economic weakness, the demand for auto parts increases as customers stall their decision to buy new cars.
Canadian Tire’s True North strategy to expand and intensify stores benefits CT REIT. The REIT purchases, develops, and intensifies Canadian Tire stores, and saves on brokerage. The retailer pays rent to the REIT, which annually increases by 1.5%. The intensified store and new stores earn more rent.
Better dividend stock: Canadian Tire or CT REIT
If Canadian Tire has a resilient business model, then why not invest in that stock?
Canadian Tire stock has a 3.8% dividend yield, and it grows its dividend per share by 1.4% annually. CT REIT has a 5.5% yield and a 2.5–3% dividend growth rate. Moreover, CT REIT gives a monthly payout, which you can reinvest through a dividend reinvestment plan (DRIP). Even Canadian Tire has a DRIP, but the payout is quarterly, which means reinvestment also happens quarterly. CT REIT’s special arrangement with the retailer and its trust status make it the ideal dividend stock to buy.
If you invested $10,000 in both CT REIT and Canadian Tire, the former would pay you $175 more in annual dividends. This gap will only widen as the dividend growth of the REIT is better than that of the retailer.
| Stock | Share Price | Dividend per Share | Dividend on $10,000 | Number of Shares |
| Canadian Tire | $189.22 | $7.20 | $381.60 | 53 |
| CT REIT | $17.09 | $0.95 | $555.75 | 585 |
Do CT REIT fundamentals meet the four requirements for a steady portfolio
It is established that CT REIT is a better dividend-paying stock. But does it have the fundamentals to keep your volatile portfolio steady?
- Right valuation: CT REIT is trading at $17.12, slightly below its net asset value (NAV) of $18.53 per unit. This hints that the valuation is right.
- Below a 75% dividend payout ratio: The REIT has kept its payout ratio below 75% since 2022. In 2025, its ratio was 73.5%, giving it ample flexibility to sustain its payout even in lean periods.
- Steady profits and cash flows: CT REIT has grown its funds from operations at a 3% compounded annual growth rate for the last 11 years.
- Manageable debt: The REIT has $3.1 billion in debt, of which 99.7% is unsecured. Debt makes up almost 40% of the fair market value of its property portfolio. It has enough cash to comfortably service its debt with its steady cash flow.
In summary, CT REIT has the balance sheet strength to give you stable dividends in volatile markets.
