New investors could easily overlook a small dividend payout when the Toronto Stock Exchange is filled with stocks offering much higher yields. But long-term dividend investing is not always about collecting the biggest payout right away. A growing business could steadily increase its dividend over time, making a small starting dividend far more attractive after many years.
RB Global (TSX: RBA) could be an interesting example on the TSX today. Its less than 2% yield may not stand out among TSX dividend stocks, but rising earnings, dividend growth, marketplace investments, and share repurchases strengthen the overall investment appeal. And those qualities could matter a lot over a 20-year holding period.
In this article, I’ll explain why RB Global could be an attractive dividend growth stock for patient investors.
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This stock with a small dividend deserves your attention
If you don’t know it already, RB Global operates global marketplaces for commercial assets and vehicles through brands including Ritchie Bros and IAA. Its platforms serve buyers and sellers across industries such as automotive, construction, transportation, agriculture, energy, and mining.
RBA stock currently trades at $114.56 per share with a market cap of about $21.3 billion. At that price, it offers a 1.6% annualized dividend yield, paid quarterly.
Although the stock has struggled lately, falling 23% over the last year, the business itself has continued to grow, making it look undervalued based on its long-term growth outlook.
The business continues to strengthen
That gap between RB Global’s recent share-price weakness and operating growth looks interesting right now. In the second quarter, the company’s gross transaction value (GTV) climbed 11% year-over-year (YoY) to US$4.7 billion, with the help of strong automotive activity and contributions from acquisitions.
For the quarter, RB Global’s total revenue also rose 11% YoY to US$1.3 billion due mainly to the 5% rise in its service revenue and 28% jump in the inventory sales revenue.
On the profitability side, the business posted a 31% YoY surge in its net profit to US$143.6 million, while its diluted earnings climbed 34% to US$0.71 per share.
Following its encouraging results, RB Global also raised its full-year 2026 GTV growth outlook to 9% to 11% from the previous range of 6% to 9%.
On the path to a bigger income story
If you’re looking at RB Global’s dividend potential many years down the road, its recent capital allocation decisions could play an important role. In July, the company increased its quarterly dividend from US$0.31 to US$0.33 per share. Then in September, it doubled the maximum value of its share repurchase program from US$500 million to US$1 billion. By September 11, RB Global had already repurchased more than 5.3 million shares under the program.
At the same time, the company continues to invest for future growth. Its subsidiary brand Ritchie Bros recently launched a redesigned mobile app that lets buyers search inventory, manage watchlists, and bid directly from their phones. During pre-launch testing, users moved from search to watchlists at more than twice the rate seen on the web platform.
In addition, RB Global is expanding through acquisitions. Its recent purchase of BigIron strengthens its position in the U.S. agriculture market while broadening its customer reach.
Considering these growth initiatives, coupled with its consistent earnings growth, marketplace investments, acquisitions, dividend increases, and share repurchases, RB Global looks like an appealing long-term dividend stock to buy and hold. Its 1.6% yield is small today, but if the business continues to grow and management keeps raising the payout over time, its dividend could grow much higher over the next 20 years.
