Some investors feel they must choose between growth stocks and dividend stocks. Growth companies can generate strong capital appreciation but often pay little income, while high-yield stocks may offer attractive cash flow but limited upside. Fortunately, some Canadian companies provide both.
Investors seeking a combination of rising income and long-term capital gains should look further into Brookfield Asset Management (TSX: BAM) and Restaurant Brands International (TSX: QSR). Both offer dividend yields well above the broader Canadian market while having attractive growth prospects that could drive strong total returns over time.
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Brookfield Asset Management: A global growth engine with income
Brookfield Asset Management is one of the world’s leading alternative asset managers, overseeing more than US$1 trillion in assets under management. The company invests across infrastructure, renewable power, real estate, private equity, and credit, giving it exposure to multiple long-term growth trends.
What makes Brookfield Asset Management particularly attractive is its capital-light, fee-based business model. Rather than relying heavily on its own capital, it earns recurring management fees and performance-based carried interest from the funds it manages. As a result, earnings are relatively predictable and scalable.
Importantly, approximately 95% of Brookfield’s fee revenues are tied to long-term or perpetual capital. This provides strong visibility into future earnings and reduces the risk of investor withdrawals during market volatility.
The company’s growth remains impressive. In the 12 months ending in the first quarter, Brookfield Asset Management raised US$108 billion in new capital, increased fee-related earnings by 18%, and grew distributable earnings per share (EPS) by 12%. Management continues to target double-digit earnings growth, supported by increasing demand for alternative investments from institutional and private wealth clients.
At roughly $64 per share at writing, BAM offers a dividend yield of about 4.3%, more than double the yield available from the broader Canadian market, represented by iShares S&P/TSX 60 Index ETF. Meanwhile, the analyst consensus price target suggests the stock trades at a discount of 20%, implying solid upside potential.
Restaurant Brands International offers income and growth potential
Restaurant Brands International is one of the largest quick-service restaurant companies in the world. Its portfolio includes Tim Hortons, Burger King, Popeyes Louisiana Kitchen, and Firehouse Subs, with more than 33,000 locations across over 120 countries.
The company’s franchise-focused business model is particularly attractive because it generates high-margin royalty income while requiring relatively modest capital investment. This allows Restaurant Brands to generate strong cash flow that supports both growth initiatives and dividend payments.
Management has outlined growth targets through 2028, including annual organic adjusted operating income growth of more than 8% and net restaurant growth exceeding 5%. Continued international expansion, menu innovation, and improvements in franchisee profitability should help support these goals.
At about $101 per share at writing, QSR offers a dividend yield of about 3.6%, roughly 70% higher than the Canadian market average. The analyst consensus price target also points to potential upside of about 12%, making the stock a reasonable choice for investors seeking both income and growth.
Investor takeaway
Investors don’t have to sacrifice growth to generate meaningful dividend income. Brookfield Asset Management and Restaurant Brands International combine durable business models, attractive yields, and clear long-term growth opportunities. For investors building a portfolio focused on both rising income and capital appreciation, these two Canadian stocks deserve serious consideration.
