Canadian investors seeking to create a growing stream of passive income should consider gaining exposure to quality dividend stocks, such as Element Fleet Management (TSX: EFN) and Gildan Activewear (TSX: GIL).
Both companies just wrapped up strong annual meetings with record results to back them up, and both are raising dividends while guiding for meaningful earnings growth.
They are cash-generating businesses with clear competitive moats and the kind of leadership that shareholders can trust.
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Element Fleet Management is a top dividend stock
Element is the world’s largest pure-play fleet management company. It manages vehicles for large corporations, handling everything from procurement to maintenance to fuel and data analytics.
What makes Element worth holding for five years is the combination of recurring revenue, expanding digital capabilities, and a management team laser-focused on what it calls “intelligent mobility.”
During the May 7th annual meeting, President and CEO Laura Dottori-Attanasio said the company is entering 2026 “with momentum, with clarity and with confidence” after delivering record financial results in 2025.
In February 2026, Element’s board authorized a quarterly cash dividend of $0.15 per common share, representing a 15% increase, raising the annualized payout from $0.52 to $0.60 per share.
The company is also guiding for 8-10% net revenue growth in 2026, along with positive operating leverage. Analysts forecast EFN stock to expand its free cash flow from $861.5 million in 2025 to $1.02 billion in 2027, which should support consistent dividend hikes.
Gildan just got a lot bigger, and the payoff is coming
Gildan makes the blank T-shirts, socks, and innerwear that sit behind some of the world’s biggest brands. It is a vertically integrated manufacturer, meaning it controls everything from yarn to finished product, giving it a cost structure that very few competitors can match.
In 2025, the company had a year that most executives only dream about. During the April 30th annual meeting, CEO Glenn Chamandy told shareholders that 2025 delivered “record sales of $3.6 billion, up 11% versus 2024,” along with more than 35% total shareholder returns.
Gildan recently closed the Hanesbrands acquisition, transforming the company from a wholesale-focused manufacturer into a dual-channel powerhouse.
The combined business now generates roughly 50% of revenue from wholesale and 50% from retail, with no single customer accounting for more than 20% of sales.
For 2026, CFO Luca Barile outlined guidance that is hard to ignore.
- The company expects revenue from continuing operations of $6 billion to $6.2 billion.
- Gildan pays an annual dividend of $1 per share, yielding approximately 1.30%.
- Free cash flow is expected to exceed $850 million in 2026, and the company has a clear plan to bring its leverage ratio back within its target range of 1.5 to 2.5 times net debt to EBITDA after taking on debt to fund the Hanesbrands deal.
At its current valuation, Gildan offers a rare combination: a dominant low-cost manufacturer with a growing brand portfolio, a dividend that has grown in the double digits, and a management team with a decade-long track record of buying back shares and compounding shareholder value.
The bottom line
Neither EFN nor GIL will make headlines for moonshot returns in any given week. But over five years, businesses that consistently raise dividends, reliably grow earnings, and reinvest in durable competitive advantages tend to outperform.
Both Element Fleet Management and Gildan Activewear check those boxes in 2026.
