1 Dividend Stock That’s Been Quietly, But Constantly, Raising Its Dividend

Chemtrade’s monthly distribution has been climbing, and its cash-flow coverage suggests the payout isn’t just a headline.

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 June 8, 8:15 pm EDT

| More on: CHE.UN

Key Points

Chemtrade pays a monthly distribution yielding about 4.3%, with three straight years of increases.
Q1 2026 was mixed, but operating cash flow rose and management maintained full-year EBITDA guidance.
Chemical pricing cycles, facility uncertainty, and debt still create risk, so it’s not a “set-and-forget” income pick.

Dividend investors usually chase the obvious names. Banks, utilities, telecoms, and pipelines get most of the attention. Yet some of the better income stories sit outside those crowded corners. Chemtrade Logistics Income Fund (TSX:CHE.UN) fits that category. It doesn’t have the household name power of a big bank, but it keeps giving investors something they love: a monthly payout that keeps moving higher.

dividends grow over time — Source: Getty Images

CHE

Chemtrade provides industrial chemicals and services across North and South America. Its products support water treatment, pulp and paper, oil and gas, semiconductors, and other industrial markets. That may not sound exciting at first, yet many of Chemtrade’s products serve essential uses, so demand doesn’t depend only on consumer confidence or a hot economy.

The dividend story looks especially relevant now. Chemtrade raised its monthly distribution to $0.06 per unit in 2026, up from $0.0575 in 2025. That works out to $0.72 per unit annually, now yielding about 4.3% at writing. That yield doesn’t scream “too good to be true,” and that’s part of the appeal. It looks generous, but not reckless.

Even better, this marks the third straight year of increases. Chemtrade raised the payout by 10% in January 2024, lifted it again by about 5% in January 2025, and then added another roughly 4% increase in 2026. For investors who want income growth, that pattern suggests management feels more confident in the cash flow base.

Into earnings

The latest quarter showed a business with some moving parts, but still enough strength to support the thesis. In the first quarter of 2026, Chemtrade reported revenue of $503 million, up 7.9% year over year. Cash flow from operating activities rose 23.3% to $42.4 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell 5.5% to $113.5 million, mainly because some electrochemical products saw lower prices and volumes.

That mix tells investors not to treat Chemtrade like a straight-line growth stock. It sells chemicals tied to pricing cycles, input costs, currency moves, and industrial demand. Some quarters will look better than others, yet the company still reiterated its 2026 adjusted EBITDA guidance of $485 million to $525 million. That gives investors some comfort after a choppy quarter.

The payout also looks more comfortable than that of many high-yield stocks. Chemtrade reported a first-quarter payout ratio of 51% and a last-12-month payout ratio of 38%. Those figures leave room for maintenance capital spending, debt work, and growth projects. Management also kept buying back units, purchasing about 2.3 million units during the quarter.

Looking ahead

The growth angle doesn’t stop at the dividend. Chemtrade plans to invest $35 million to $55 million in growth capital projects this year, with a focus on water solutions. Municipalities and industries need reliable water treatment chemicals, regardless of market mood. Chemtrade also continues work in ultrapure acid, which connects the company to semiconductor demand.

Valuation helps as well. Chemtrade isn’t priced like a market darling, even after a stronger run, and that gives income investors a cleaner entry point than many defensive dividend stocks. The trade-off comes from complexity. This fund needs steady operations, sane commodity pricing, and careful capital spending. Yet the current yield, coverage, and buyback plan make the risk-reward feel reasonable.

That said, investors should respect the risks. Chemical prices can swing, maintenance spending can climb, and the North Vancouver chlor-alkali facility faces rezoning uncertainty. The latter could affect long-term operations beyond 2030. Debt is also important, even though leverage sat at 2.5 times net debt to last-12-month adjusted EBITDA at quarter end.

Bottom line

So, is Chemtrade too easy to overlook? For dividend investors, yes. It offers monthly income, recent dividend growth, share buybacks, and exposure to essential industrial markets. Investors who want dependable cash flow without chasing the biggest names may find CHE.UN worth a closer look inside a portfolio today.