A 7.1% Dividend Stock That's Quietly Becoming a Top Pick for 2026

A 7.1% Dividend Stock That’s Quietly Becoming a Top Pick for 2026

This overlooked Canadian dividend pick offers a 7.1% yield along with strong financial growth and expanding mortgage assets.

Jitendra Parashar

Author Bio Jitendra Parashar is a financial journalist who has been writing for The Motley Fool Canada since June 2020. With more than 13 years of experience in financial journalism, equity research, and market analysis, he helps investors understand market developments and identify long-term investment opportunities. Before joining The Motley Fool Canada, Jitendra spent several years at Market Realist covering U.S. equities, major economic developments, and developments in the automotive and technology industries. He also worked in commodity and currency research at brokerage firms, gaining insight into how economic trends, central bank decisions, and geopolitical events influence financial markets. Jitendra writes for beginner investors, dividend seekers, and Canadians looking to build wealth over the long term. He also contributes to the daily TSX Today series, explaining key Canadian market developments and highlighting news investors should watch. Based in India, Jitendra follows Canadian and U.S. markets closely. Outside of work, he enjoys travelling in the Himalayas, street and nature photography, and exploring programming and artificial intelligence. Education MBA in Finance and International Business Bachelor's degree in Journalism Areas of Expertise Canadian and U.S. financial markets, long-term equity investing, dividend investing, macroeconomic and geopolitical trends, automotive stocks, emerging technologies, and artificial intelligence. Social Media Profiles LinkedIn Muck Rack Favorite Investment Quote “Simplicity is the master key to financial success.” — John C. Bogle

Published May 21, 4:40 pm EDT

Dividend investing works best when you can find companies that quietly deliver strong returns without creating too much noise. While popular growth stocks tend to dominate day-to-day headlines, dependable dividend payers with solid fundamentals can create meaningful long-term wealth through a combination of passive income and capital appreciation.

That’s especially true today, when many investors are looking for stable businesses capable of generating reliable cash flow amid escalating geopolitical tensions and an uncertain macroeconomic environment. One TSX stock that appears to be gaining momentum on both fronts is MCAN Mortgage (TSX: MKP).

With a high dividend yield, improving financial performance, and steady growth initiatives, the company looks like a top income pick for 2026. In this article, I’ll explain why MCAN Mortgage could deserve a closer look from long-term investors right now.

Real estate investment concept with person pointing on growth graph and coin stacking to get profit from property — Source: Getty Images

MCAN Mortgage stock

To put it simply, MCAN Mortgage operates as a Canadian mortgage investment firm with exposure to residential, construction, and commercial lending markets. Its business model focuses on generating stable income through a diversified portfolio of Canadian mortgages while maintaining disciplined underwriting standards.

MKP stock has climbed by nearly 29% over the last 12 months due mainly to growing investor confidence in its business and income potential. With this, it currently trades at $24.60 per share with a market capitalization of slightly more than $1 billion. At this market price, the company offers a juicy dividend yield of 7.1%.

Strong financial growth is supporting investor confidence

One of the biggest factors behind MCAN Mortgage’s recent strength has been the continued expansion of its mortgage portfolio. Through its divisions like MCAN Home, MCAN Capital, and MCAN Wealth, the company has maintained steady mortgage originations while also growing its uninsured securitization business.

Its strategic partnership with MCAP has also played a major role in supporting growth. In the first quarter, MCAP’s income rose by 43% year-over-year (YoY), boosting shareholder returns and strengthening profitability.

Overall, MCAN Mortgage’s net interest income rose by 8% YoY, supported by continued mortgage portfolio growth. Its net profit surged 39% from a year ago as stronger equity income from MCAP and realized gains on securities boosted results.

The company’s return on equity reached 14.2% in the latest quarter, reflecting efficient capital management and strong profitability. Meanwhile, its assets under management also increased significantly, climbing 35% to $8.3 billion.

Disciplined lending standards could support long-term stability

Interestingly, MCAN Mortgage’s residential mortgage assets are also continuing to grow. Its uninsured residential mortgage balances have risen 4% year-to-date to reach $4.7 billion. Similarly, its construction and commercial mortgage balances also expanded to $1.2 billion.

At the same time, the company maintains a disciplined approach to risk management. Despite economic uncertainty, MCAN Mortgage’s average loan-to-value ratio remained conservative at 67.4% for uninsured residential mortgages and 60.8% for construction loans.

Why MCAN Mortgage stock could be a top dividend pick for 2026

Going forward, MCAN Mortgage continues focusing on long-term growth initiatives, including expanding the company’s uninsured residential mortgage securitization program and investing in infrastructure designed to support sustainable growth.

For income-focused investors, the combination of a 7.1% dividend yield, rising assets under management, and disciplined lending standards clearly makes it an attractive dividend stock to buy and hold in 2026 and beyond.