Every summer, the same question lands in my inbox. Where should I put my next dollar? This year, the answer starts with something investors have not enjoyed in a while: calm.
The Bank of Canada left its overnight rate at 2.25% again on June 10, the fifth “hold” in a row. Economists now expect regulators to maintain this rate through the fall as policymakers weigh soft domestic growth against inflation amid the ongoing conflict in the Middle East.
Here is where I would put fresh capital right now, and why one name stands above the rest.
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The bull case for this Canadian dividend stock
Artificial intelligence gets discussed as a software story, but the real bottleneck is electricity.
This megatrend is turning Canadian power producers into an unexpected AI trade. Capital Power (TSX: CPX) is one name investors should keep on their watchlist right now.
At its annual meeting in April, chief executive officer Avik Dey defended the company’s decision to scrap its net zero emissions targets after canceling a carbon capture project at its Genesee plant in Alberta due to a lack of economic feasibility.
Notably, Capital Power finished repowering its Genesee coal plant to natural gas in 2024, is building out roughly 1.5 gigawatts of renewable capacity, and completed 170 megawatts of battery storage in Ontario.
Analysts tracking the TSX dividend stock project free cash flow per share to expand from $6.44 in 2025 to $8.80 in 2028. If the stock is priced at 15 times forward FCF, it could deliver an 86% return over the next four years. If we adjust for dividends, cumulative returns could be closer to 100%.
A discount retailer to own in 2026
Dollarama (TSX: DOL) reported its first quarter of fiscal 2027 in June, and reported revenue of $1.9 billion, an increase of 21.4% year over year.
Same-store sales in Canada rose 5.6%, and net earnings stood at $302 million. Chief executive officer Neil Rossy told analysts that traffic and basket size grew in Q1, a sign shoppers are visiting more often and buying more in each trip.
The company also raised its quarterly dividend to $0.12 per share and spent $339.1 million, buying back nearly two million shares during the quarter, chief financial officer Patrick Bui said on the call.
Dollarama’s stake in the Latin American chain Dollarcity boosted earnings by 27.1%, and the company is now expanding into Mexico and rebranding stores across Australia.
Rossy explained that renovated Australian locations will not carry the Dollarama name until the shopping experience matches the brand, a patient approach that protects the reputation the company has spent decades building.
Dollarama thrives when consumers feel squeezed, and with inflation still running above target and tariffs adding cost pressure, that condition is not going away soon.
Add a growing footprint in three countries, a rising dividend, and steady buybacks, and you have a business built to survive economic downturns.
The bottom line for your portfolio
Rate stability will not last forever, so use this window while it is here. Power and infrastructure names tied to AI demand deserve a look, but read the fine print before you buy. Defensive retail, led by Dollarama, offers something rarer: growth and safety in the same stock.
