The Canadian equity market has remained resilient despite recent volatility, with the S&P/TSX Composite Index pulling back in August while remaining firmly higher year to date. However, persistent inflationary pressures, elevated geopolitical risks, and renewed trade tensions with the United States continue to create uncertainty for investors.
Against this uncertain backdrop, investors may want to focus on stocks that offer a combination of long-term growth potential and reliable dividend income. These companies can offer capital appreciation while generating consistent cash flow, helping investors build more resilient portfolios over time. With this in mind, let’s look at my two top picks.
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Savaria
Through its well-diversified global manufacturing and distribution network, Savaria (TSX: SIS) provides accessibility and mobility solutions across international markets. Earlier this month, the company delivered an impressive second-quarter performance, with revenue and adjusted EPS (earnings per share) increasing 8.4% and 20.7%, respectively. The adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin also expanded by 50 basis points to 21.1%, supported by the favourable impact of its Savaria One initiative. Meanwhile, the company further strengthened its balance sheet, lowering its net debt-to-adjusted EBITDA ratio to 0.87 from 1.03 at the end of 2025.
The aging global population could benefit Savaria with sustained long-term demand for accessibility and mobility products and services. Its diversified manufacturing footprint further provides flexibility in managing geopolitical and trade-related challenges. At the same time, the company is investing in product innovation and pursuing strategic acquisitions to broaden its capabilities, expand its market presence, and support future growth.
These favourable trends have supported Savaria’s robust five-year outlook. Management expects revenue to reach $1.6 billion by 2030, implying an annualized growth rate of 11.8%, while maintaining an adjusted EBITDA margin above 20%. Adjusted EBITDA per share could reach $4.25 by 2030, representing an annualized growth rate of 10.4%. If Savaria delivers on these targets, the resulting earnings growth could provide further support for share-price appreciation and its monthly dividend payments.
The stock has already delivered a return of more than 27% year to date, while its dividend yield stands at 2%. Overall, Savaria is an attractive option for investors seeking a combination of long-term growth potential and reliable dividend income.
Bank of Nova Scotia
My second pick is Bank of Nova Scotia (TSX: BNS), which has gained 22.9% year to date and currently offers an attractive dividend yield of 3.8%. With a diversified financial-services business spanning multiple countries, Scotiabank benefits from multiple revenue sources, which can provide greater earnings stability across different market conditions. The bank also has an exceptional track record of returning capital to shareholders, having paid uninterrupted dividends since 1833. Over the past decade, it has increased its dividend at an annualized rate of 4.5%.
Scotiabank is also repositioning its business toward higher-return North American markets while reducing its exposure to riskier, lower-return operations in Latin America. This strategy could improve the quality and stability of its earnings over the long term. As part of this effort, the bank is pursuing the acquisition of MapleMark Bank, which would strengthen its presence in the growing Dallas market. It is also seeking to acquire the remaining shares of Scotia Group Jamaica Limited, potentially giving it greater control over the business while creating opportunities to improve operational efficiency and capital allocation.
Meanwhile, a relatively higher interest-rate environment could continue to support Scotiabank’s core lending operations and net interest income. The bank is also enhancing shareholder returns through its new share-repurchase program, under which it plans to repurchase up to 15 million shares through April 2027. The buybacks could reduce its outstanding share count by approximately 1.2%, potentially providing additional support for earnings per share and shareholder returns.
Overall, Scotiabank’s diversified business, strong dividend history, strategic shift toward higher-return markets, and ongoing capital returns make it an attractive option for investors seeking a combination of income and long-term growth.
