Telus (TSX: T) remains a familiar stock for many Canadian investors, and its latest results show why. The telecom giant delivered 262,000 total mobile and fixed customer additions in the first quarter of 2026, grew free cash flow by 19% from a year ago, and reaffirmed its 2026 targets.
Yet familiar does not always mean best positioned for growth. Telus is still dealing with pressure on net profit, higher restructuring costs, competitive wireless pricing, and the need to reduce leverage. That’s why, in my opinion, it’s better for investors to look beyond the usual large-cap dividend stocks.
Doman Building Materials (TSX: DBM) could be a great example of a dividend stock that offers a more compelling blend of income and growth potential right now. While the housing market has faced periods of uncertainty, Doman has continued to generate solid cash flow and maintain an attractive dividend. At the same time, its valuation remains relatively modest compared to that of many well-known income stocks.
Let me give you some more reasons why I think Doman stock could outperform many traditional dividend stocks over the next several years.
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A cheaper dividend stock with room to grow
While Doman Building Materials may not have Telus’s profile, it offers a great combination of income and growth potential. The company is an integrated distributor of building materials and related products, with operations across Canada and select regions of the United States. Its network includes distribution centres, treating plants, specialty planing mills, sawmills, and related facilities.
At the time of writing, DBM stock traded at $10.43 per share with a market cap of about $915 million. Over the last 12 months, the stock has climbed 22% but still offers an attractive 5.4% dividend yield, paid quarterly. That gives investors a lower-priced income stock with a stronger recent growth profile than many traditional defensive dividend stocks.
More importantly, Doman’s business is backed by a broad operating footprint. In Canada, it operates through Doman Building Materials Canada and Doman Treated Wood Canada, while its U.S. operations include Doman Building Materials USA and Doman Treated Wood USA. The company also manages private timberlands and forest licences, adding another layer to its supply chain and revenue base.
Why Doman stock keeps looking resilient
In the first quarter of 2026, Doman’s revenue came in at $762 million. That was slightly lower than a year ago due to weaker pricing in some construction materials categories, but the company still improved its gross margin to 17%.
The company also generated EBITDA (earnings before interest, taxes, depreciation, and amortization) of $68.1 million, reflecting its ability to manage costs through changing market conditions. Adding to the optimism, its quarterly net profit also rose nearly 2% year over year to $23.9 million, giving investors another sign that Doman can navigate commodity price swings without losing its financial footing.
Strong long-term growth prospects
Doman’s long-term growth prospects also look appealing. The firm’s extensive distribution network positions it to benefit if housing starts recover and infrastructure spending continues to support demand for building materials. Its ownership and management of private timberlands and forest licences also provide access to raw materials, which could help it with cost control and supply reliability.
Moreover, Doman’s focus on specialty products and treated wood helps set it apart from many competitors. These categories could strengthen its competitive position and support margin expansion over time, especially if demand across residential, repair, and construction markets improves.
That’s why, for investors comparing income stocks, the point is not that Telus is a poor business. Rather, Doman offers a cheaper entry point, a higher current yield, and stronger upside potential.
