One of the biggest investing mistakes is assuming yesterday’s biggest risk has disappeared simply because it isn’t dominating the headlines anymore. Inflation is a good example. While price pressures have eased from their peak lately, crude oil price volatility and other factors that pushed costs higher haven’t vanished entirely. That’s why both the U.S. Federal Reserve and the Bank of Canada have shown caution by pausing rate cuts in recent meetings.
If inflation starts picking up again, investors will want businesses that could adapt by passing higher costs on to customers, generating healthy cash flow, and continuing to reward shareholders.
Let’s look at three Canadian dividend stocks I find well-positioned if inflation starts biting again.
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Canadian Natural Resources stock
Canadian Natural Resources (TSX: CNQ) could be a strong stock for investors looking to add an inflation-sensitive income stock to their portfolio. The oil and natural gas producer operates across Canada, the North Sea, and offshore Africa. Its shares trade at $62.43 each, giving the company a market cap of $129.4 billion. The stock also offers a 4% annualized dividend yield.
In the first quarter, Canadian Natural produced an average of 1.6 million barrels of oil equivalent per day, up 4% year-over-year (YoY). Its adjusted net earnings came in at $2.4 billion, which was close to the $2.4 billion reported a year ago.
Meanwhile, the company continues to advance work on the Jackfish expansion and Pike 2 project, along with investments tied to future thermal production. More importantly for income investors, the business has increased its dividend for 26 straight years.
That combination of scale, low-decline assets, production growth, and a long record of dividend increases gives CNQ strong appeal.
Choice Properties stock
For investors who prefer a consistent source of income, Choice Properties Real Estate Investment Trust (TSX: CHP.UN) could be worth considering. The trust owns grocery-anchored retail properties, industrial buildings, residential assets, and mixed-use developments across Canada. Its units currently trade at $16.12 each, giving the real estate investment trust (REIT) a market cap of $5.3 billion. It also offers a 4.8% annualized dividend yield.
In the second quarter, Choice Properties reported funds from operations of $192.9 million, up 0.7% YoY. Its diluted funds from operations rose 0.8% to $0.267 per unit.
The operating picture also remained solid as it finished the quarter with an occupancy of 97.7%, while long-term renewal leasing spreads reached 19%.
For investors worried about another wave of inflation, that mix of reliable rental income, monthly distributions, and rent-reset potential is appealing. Choice Properties offers a practical way to add defensive real estate exposure to a dividend portfolio.
Saputo stock
Saputo (TSX: SAP) can bring defensive exposure to your portfolio. This dairy processor produces and sells cheese, milk, cream, cultured products, and dairy ingredients across several international markets. At the time of writing, its shares traded at $41.58 each, giving Saputo a market cap of $16.6 billion. The stock currently offers a 2% annualized dividend yield.
For fiscal 2026 (ended in March), Saputo’s revenue from continuing operations fell 1.5% YoY to $17.6 billion. Nevertheless, its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 10.4% to $1.7 billion. This growth was supported by better pricing, a more favourable product mix, efficiency gains, and tighter cost control.
At the same time, Saputo continues to benefit from investments in its production network while focusing its portfolio on higher-return opportunities. Since dairy products remain everyday essentials, demand largely stays resilient even when household budgets come under pressure.
That defensive demand, combined with improving margins and stronger cash flow, makes Saputo an attractive Canadian dividend stock for investors preparing for another period of higher inflation.
