The stock market is volatile, as its performance is influenced by macro factors and investor sentiments beyond a company’s control. Factors beyond anyone’s control, such as geopolitical tensions affecting supply chains, tariffs, inflation, consumer spending, and unemployment rates, cause uncertainty. And uncertainty fuels market volatility. How can you build a steady cash flow in such volatile markets?
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TSX dividend stocks that give steady cash flow in any market
The answer lies in building a diversified portfolio of stocks across sectors with a strong balance sheet and cash flow management. Note that even sturdy balance sheets can tumble in an economic crisis. Hence, it is important to review the fundamentals of your portfolio stocks once a year.
CT REIT
From the real estate sector, CT REIT (TSX: CRT.UN) gives you a monthly payout annually adjusted for inflation, with average dividend growth of 3%. Its 5.08% annual yield makes it attractive compared to a term deposit. You can bank on the dividend as it comes from the rent CT REIT receives from its parent, Canadian Tire. Any new store the REIT buys, intensifies, or develops is occupied by Canadian Tire. REITs do not retain income and distribute most of it after expenses and capital expenditure to maintain their tax-free status, further ensuring payout.
CT REIT has an assured rent coming from the parent, removing the need to incur marketing, brokerage, and other costs to find tenants. Canadian Tire provides a cushion against market volatility but also exposes it to concentration risk and changes in property prices. In your annual review, look for the occupancy ratio, dividend payout ratio, and indebtedness ratio. For the first quarter of 2026, all three are strong at 99.4%, 72.5%, and 39%.
Manulife Financial stock
A low-yield (3.2%), high-dividend-growth (10% annually) stock from the finance sector, Manulife Financial (TSX: MFC) is enjoying strong growth in premiums from its expansion in Asia. The insurer is growing through acquisitions and joint ventures. What makes me bullish is its consistent double-digit growth in Contractual Service Margin (CSM). CSM is the unearned profit for keeping insurance active, which it realizes in core earnings as the insurance term passes. The dividend source is the premium transferred to core earnings. It also has a wealth management division that invests in equity and alternative investments and earns asset management fees.
It can give dividends in any market as premiums rise when the market is fearful, and asset management fees increase when the market is bullish. The fee is charged on the portfolio value, which increases in a bull market. However, it carries risk when several insurance claims come at once, or a major claim is processed. Another risk is mass withdrawal of investments. Be vigilant of these two risk parametres in your annual review.
Suncor stock
It is impossible not to buy an energy stock in Canada. Suncor Energy (TSX: SU) doesn’t have an attractive dividend yield at present as geopolitical tensions at the Strait of Hormuz are driving oil prices. The integrated oil company has not increased its capacity but is focused on reducing costs through technological innovation. The goal is to maximize profits in an upcycle and contain losses in a downturn. Hence, it remains conservative in its approach given the steep dips of cyclical stocks when the upcycle ends.
Consider buying Suncor stock at the dip and lock in a higher yield than the present 2.76%. There are many risks associated with the stock, but Suncor has overcome all with disciplined capital allocation, making me bullish on the stock.
Capital Power stock
Unlike Suncor, which carries the risk of fluctuating oil prices, Capital Power (TSX: CPX) sources its dividends from its long-term power supply agreements with companies from different sectors. Its latest growth spurt is from power-hungry data centres.
Capital Power’s 3.87% annual yield may not look attractive. However, its 6.8% average annual dividend growth in the last 12 years and the dividend-reinvestment plan introduced in August 2023 make it an attractive stock to compound dividends. Watch out for its leverage ratio, which stands at 4.3. Any sharp dip in earnings before interest, taxes, depreciation, and amortization could affect dividends.
Investor tip
Every investment carries risk. Knowing the risk helps you manage it well and ensure steady cash flow in every market.
