Dividend stocks are not created equal, but it is easy to see which ones shine brighter than others. A group distinct from regular dividend-payers is called dividend stars. These stocks have raised dividends for at least five consecutive years. However, not all stocks that have earned this status command a very high price.
Open Text (TSX: OTEX) and North West Company (TSX: NWC), for instance, have 14- and 15-year dividend growth streaks, respectively. Yet, both stocks are relatively cheap today due to macro headwinds. These two Canadian dividend stars offer a good price and an attractive entry point if you invest today. The dividend yields are decent, too.
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Rare gem
Open Text is a rare gem, as very few growth-oriented companies pay dividends. The tech stock trades at a deep discount, down nearly 29% year-to-date. However, at $31.06 per share, the dividend yield is a hefty 4.9%. OTEX’s 52-week high is $56. The recurring Software-as-a-Service cash flows and 52.8% payout ratio assure payout sustainability.
The $7.5 billion enterprise software company is known globally for its secure Information management software for artificial intelligence (AI). It operates a high-margin business in a fast-growing market worth a potential US$200 billion. Open Text introduced a dividend program in fiscal 2013 and has returned over $2.2 billion to shareholders since then.
Open Text completed divesting non-core assets in May 2026 and will use the US$150 million proceeds to reduce debt. According to its newly appointed CEO, Ayman Antoun, the sale is part of the company’s non-core divestiture strategy. “This is how we optimize to grow and deliver sustained value creation for our clients, partners, and shareholders,” he said.
In the first three quarters of fiscal 2026 (nine months ending March 31, 2026), total revenues and net income (GAAP-based) increased 1% and 19.7% year-over-year, respectively, to US$3.9 billion and US$487 million. Notably, free cash flow (FCF) rose 21.7% to US$686 million from a year ago.
In Q3 fiscal 2026, net income climbed 86% to US$173 million versus Q3 fiscal 2025, with a 13.5% margin. The quarter also marked 21 consecutive quarters of cloud organic growth. Antoun said data is OTEX’s most precious natural resource. “OpenText is uniquely positioned to help clients securely unlock the value of that data to solve complex challenges and win,” he added.
Safety net
North West Company is a safety net, offering protection against recession. The current share price is 14% lower than its 52-week high of $56.77. At $48.78 per share (+0.5% year-to-date), this consumer staples stock pays a 3.4% dividend. The captured market in remote communities is a powerful competitive moat.
The $2.3 billion Winnipeg-based company sells food, medicine, and everyday essentials. There is hardly any competition in rural and remote markets in Northern Canada and Alaska. North West’s transportation network is vertically integrated to support the retail grocery business. It gives NWC superior logistics and supply chain capabilities while preventing new players from entering.
North West has delivered consistent profitability over the last three fiscal years. The company strives to deliver sustainable, total returns through earnings growth and dividends.
Valuable additions
OTEX and NWC are not your typical dividend anchors. However, as dividend stars, both stocks are valuable additions, if not prime second-liners, in any income portfolio. Buy them now at good prices.
