2 Canadian Dividend Stocks That Could Raise Payouts Again

Dividend growth matters more than headline yield, and these two TSX financials look positioned to keep raising payouts.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published May 14, 3:45 pm EDT

Dividend stocks are great, aren’t they? These companies pay you on a regular basis just to own them! But what’s even better than that? Finding companies that then increase those payouts not just once, but year after year.

That’s why today we’re looking at likely candidates for further payout increases. These are companies that see earnings grow, keep cash flow steady, maintain manageable debt, and feel confident in management in the next few years. That’s why today we’re going to look at two dividend stocks that may not offer the highest yield, but certainly look like the most likely candidates for further increased payouts.

dividend growth for passive income — Source: Getty Images

POW

Power Corporation of Canada (TSX: POW) is a Montreal-based holding company with major stakes in Great-West Lifeco, IGM Financial, and alternative asset manager Sagard. The dividend stock gives investors exposure to insurance, retirement, wealth management, mutual funds, private assets, and fintech-style investments through one TSX stock. As financial stocks can benefit when markets stabilize, savings balances grow, and investors regain confidence, this helps the dividend increase.

That was proven recently when POW stock raised its dividend again. Its quarterly dividend of $0.6675 per share, up 9% from the prior quarterly payout, now yields about 3.3% at writing. Further growth is supported by earnings. For 2025, Power reported adjusted net earnings from continuing operations of $3.1 billion, up 12% from $2.8 billion in 2024. In the fourth quarter alone, adjusted net earnings from continuing operations reached $867 million, or $1.36 per share, compared with $829 million, or $1.28 per share, a year earlier.

Despite all this strength, the dividend stock still looks reasonable at 18.7 times earnings with a $49.2 billion market cap. What’s more, for long-term investors Great-West Lifeco keeps producing steady insurance and retirement income, IGM can benefit if markets stay firm, and Sagard gives Power longer-term exposure to private assets. In short, long-term investors will certainly receive growth and income from this dividend stock.

FFH

Investors might not think of Fairfax Financial Holdings (TSX: FFH) as a dividend stock. Yet the Toronto-based holding company built around property and casualty insurance, reinsurance, and investments is a top choice. The company collects premiums through insurance businesses, invests the float, and uses capital allocation to grow book value over time. Again this allows for a modest, but growing dividend, currently yielding 0.94% at $20.77 per share.

It’s not just the dividend either. In Q1 2026 alone, Fairfax stock bought back 374,883 subordinate voting shares for $631.3 million, at about $1,684 per share for major capital return. The quarter also saw net earnings attributable to shareholders of US$695.7 million, or US$31.11 per diluted share, in Q1 2026. That was down from US$945.7 million, or US$42.70 per diluted share, a year earlier, mainly as investment gains swung to losses. Yet the operating picture looked much stronger as operating income rose to US$1.2 billion from US$685.5 million.

Shares are now down about 16% year-to-date in a volatile market, with the dividend stock now trading at about 8 times earnings. Yet there are many items to look forward to. Fairfax expects to close the sale of a 23.1% stake in Poseidon for about US$1.9 billion, creating an estimated pre-tax gain of about US$837 million, and also expects to close the Eurolife Life Operations sale for roughly US$935 million, with an estimated pre-tax gain around US$350 million. So with underwriting strength, rising interest income, a large investment portfolio, and buybacks this could be a strong dividend stock for investors to consider.

Bottom line

POW stock and Fairfax stock won’t appeal to every dividend investor. Yet if you’re looking at increasing dividends, these are top choices. And both can create solid income even with $10,000 invested.