The Smartest Dividend Stocks to Buy on the TSX Right Now

Three TSX financial dividend stocks stand out right now because they pair resilient earnings with shareholder-friendly payout growth.

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 25, 4:00 pm EDT

| More on: IAGIFCPOW

Key Points

Intact Financial is the quality compounder, with strong underwriting profits and a well-supported dividend.
iA Financial is raising its dividend quickly, supported by solid earnings growth and a diversified business mix.
Power Corporation offers the highest yield here, plus diversification across major financial holdings, often at a discount.

Smart dividend investing doesn’t need to feel complicated. The best stocks usually do simple things well. They earn money through cycles, raise payouts when cash flow allows, and protect investors from chasing every hot trade on the market. Right now, three TSX dividend stocks look especially smart to buy, namely Intact Financial (TSX: IFC), iA Financial (TSX: IAG), and Power Corporation of Canada (TSX: POW).

four people hold happy emoji masks — Source: Getty Images

IFC

Intact looks like the quality pick. The dividend stock sells home, auto, business, and specialty insurance across Canada, the United States, the United Kingdom, and Ireland. Insurance doesn’t sound exciting, but a well-run insurer can turn pricing power, underwriting discipline, and investment income into steady profits.

The latest quarter showed why Intact deserves attention. Net operating income (NOI) per share rose 8% to $4.33, while the combined ratio came in at 91.3%. In insurance, a combined ratio below 100% means the company made an underwriting profit before investment income. That’s a strong sign, especially when severe weather and claims costs keep pressuring the industry.

Intact also benefits from scale. It can spread risk across markets, price policies with better data, and lean on a strong distribution network. The dividend yield isn’t huge at about 2%, but the payout looks well supported. Investors buy Intact for quality first and income second. For investors who want a dependable compounder with a dividend attached, it looks like one of the smartest financial dividend stocks on the TSX.

IAG

iA Financial brings more income and growth potential. The dividend stock offers insurance, wealth management, group benefits, auto and home warranty products, and dealer services. It has a strong base in Canada and a growing U.S. business. That mix gives investors more than one way to win.

The first quarter looked solid. Core diluted earnings per share (EPS) rose 12% year over year to $3.25, and core return on equity reached 17.5% over the trailing 12 months. Management also raised the common dividend by 11%. That’s the kind of move dividend investors should notice, now yielding 2.3%.

iA Financial also trades at a valuation that can still look reasonable beside its growth, at just 17.6 times earnings at writing. The dividend stock has spent years building capital strength, buying back shares, and expanding in areas where it can earn attractive returns. Its dealer services business adds a different driver from traditional life insurance, which can help smooth results over time. Altogether, iA has improved its profile, and the dividend increase shows management still sees room to reward shareholders.

POW

Power Corporation is the broader, more diversified dividend stock. It gives investors access to Great-West Lifeco, IGM Financial, wealth management, insurance, alternative assets, and fintech-related holdings. For investors who want one stock with several financial engines inside it, Power remains a practical option.

The latest quarter offered steady progress. First-quarter net earnings rose to $283.8 million from $233.8 million a year earlier. Assets under management and advisement reached $314 billion at the end of March, up 14.2% from last year. Earlier in 2026, Power also increased its quarterly dividend by 9% to $0.6675 per share, now yielding about 3%.

Power’s appeal comes from patience. It often trades at a discount to the value of its underlying holdings at just 21.5 times earnings. That can frustrate investors when the market doesn’t close the gap quickly. But it can also create an attractive entry point for those willing to collect the dividend and wait.

Bottom line

Intact, iA Financial, and Power Corporation are smart dividend stocks that don’t need to grab attention every day. They need strong businesses, reasonable payouts, and enough growth to keep income moving higher. And even now, $7,000 can bring in strong income to use towards compounding.