Sixteen years of dividend increases can turn one modest investment into a paycheque that grows alongside its owner. Add a second company targeting dividend growth through 2030, and $1,000 suddenly has a far more interesting job than gathering dust.
The biggest yield won’t always produce the best result. A double-digit payout can disappear quickly when cash flow weakens, while a smaller dividend backed by rising earnings may keep growing for years. So, why not get both?
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What makes a smart dividend stock?
For me, I’d look for manageable payout commitments, improving operations, and a business capable of raising prices or expanding its assets. Reinvesting payments from those Canadian dividend stocks can then purchase more shares, allowing each new dividend to help produce the next one.
Diversification still matters, even with only $1,000. That leads me to Canadian Tire (TSX: CTC.A) and AltaGas (TSX: ALA), which combine consumer spending with regulated utilities and energy infrastructure.
Canadian Tire
Canadian Tire reaches households through its namesake stores, SportChek, Mark’s, financial-services business, and Triangle Rewards program. That collection gives the company several ways to earn from customers buying automotive products, clothing, sporting goods, and everyday household essentials.
First-quarter retail revenue rose 5% excluding petroleum, while automotive sales increased for the 23rd consecutive quarter. Diluted earnings reached $2.02 per share, showing that cautious consumers haven’t stopped maintaining their vehicles or searching for value.
Canadian Tire now pays $1.80 per share quarterly, equal to $7.20 annually and a yield near 3.7% at recent prices. The company raised its annual dividend for the 16th consecutive year, giving investors a strong income record before moving into infrastructure.
AltaGas
Meanwhile, ALA stock operates regulated natural gas utilities while processing and exporting Canadian energy products to overseas customers. The utilities provide steadier earnings, while its midstream assets offer growth as global buyers seek reliable North American energy supplies.
That combination produced record normalized earnings before interest, taxes, depreciation, and amortization (EBITDA) of $818 million in the first quarter, up from $689 million a year earlier. ALA stock also exported nearly 125,000 barrels of liquefied petroleum gases per day, keeping its terminals impressively busy.
Future growth could come from the Ridley Island Energy Export Facility, which was approximately 75% complete at quarter-end. ALA stock also signed another agreement supporting a Virginia data centre, connecting its regulated network to rising electricity and backup-power demand.
The company pays $1.34 per share annually after raising the dividend 6% for 2026. Management expects dividends to grow by 5% to 7% annually through 2030, giving investors a smaller initial yield near 2.4% but a clearer path toward rising income.
Earning income
Using recent prices, two Canadian Tire shares and 11 AltaGas shares would invest almost the entire amount. The portfolio could generate about $29.14 annually before any future dividend increases.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| CTC.A | $198.05 | 2 | $7.20 | $14.40 | Quarterly | $396.10 |
| ALA | $54.49 | 11 | $1.34 | $14.74 | Quarterly | $599.39 |
| TOTAL | $29.14 | $995.49 |
That said, Canadian Tire remains exposed to weaker consumer spending and credit losses, while ALA stock must complete major projects on budget and manage substantial debt. Those risks could create volatility, although owning two different businesses keeps one difficult quarter from controlling the entire investment.
Bottom line
Canadian Tire offers a higher starting yield and a 16-year dividend-growth record, while ALA stock brings expanding infrastructure and targeted increases through 2030. Reinvesting their payments could let compound growth turn today’s $1,000 into a much more useful income stream over the decades ahead.
