The pursuit of reliable passive income often leads Canadian investors toward the familiar corridors of the real estate sector. However, the market has a way of testing our patience. Even when fundamentals are firing on all cylinders, stock prices can lag behind the actual value of the assets they represent. Today, one of Canada’s largest retail landlords with a monthly dividend that yields 5.5% annually, RioCan Real Estate Investment Trust (TSX:REI.UN), or RioCan REIT, presents exactly this kind of monthly dividend stock investment opportunity.

While REI.UN units have enjoyed a 23% gain over the past 12 months, they remain roughly 20% below their 2022 peaks of approximately $26. This persistent pullback has created a valuation disconnect that is becoming increasingly difficult for income seekers to ignore.

A massive vote of confidence on RioCan REIT’s future financial trajectory

The most compelling price recovery catalyst for RioCan REIT units arrived just two months ago. In February 2026, Morningstar DBRS revised RioCan’s investment-grade BBB credit rating trend to Positive from Stable. This shift in sentiment was a major signal to the market. It suggests that despite the noise of the broader economy, RioCan’s balance sheet and operational strategy are successfully navigating a higher-for-longer interest rate environment.

Improving debt coverage metrics, supported by a $1.5 billion liquidity cushion, back the latest credit rating “upgrade”. For a business that effectively acts as a corporate structure compelled to pay you a cut of its annual profits, a strengthening balance sheet is the ultimate safety net for your monthly distributions.

Speaking of distribution safety, RioCan REIT’s distributions for 2025 represented 90% of its core adjusted funds from operations (AFFO). Management targets the AFFO payout rate to fall to 80% by 2028. AFFO measures the most distributable cash flow from rental income.

RioCan’s urban moat supporting long-term dividend investment mandates

RioCan’s Major Market strategy is the engine behind its operational resilience. Approximately 90% of its rent is generated in Canada’s six largest urban centers, with a heavy concentration in transit-oriented locations in the Greater Toronto Area. If e-commerce ever intended to kill retail, RioCan has proven that necessity-based shopping is here to stay.

The trust currently boasts a record-high retail occupancy rate of 98.5%. Because its tenant base is anchored by “all-weather” essentials like groceries, pharmacies, and liquor stores, RioCan maintains defensive moats during recessions. High demand for its space is allowing the trust to flex its pricing power. In early 2026, RioCan reported aggressive leasing spreads of 21.1%, including massive 37.3% spreads on new leases during the fourth quarter of 2025.

Beyond simple retail, the trust is successfully evolving through its mixed-use “RioCan Living” portfolio developments. What was once a capital-intensive development pipeline is now transitioning into a stable contributor of Funds From Operations (FFO) as high-density residential projects come online in supply-constrained urban markets.

The price makes sense

The bull case for RioCan REIT is grounded in a significant discount to its intrinsic value. At writing, REI.UN units traded around $21.03, yet their Net Asset Value (NAV) could be sitting between $27.00 and $28.00 per unit today. New investors can effectively buy a slice of Canada’s premium real estate at a 20% to 25% discount.

Looking at portfolio cash flow, RioCan REIT trades at a price-to-FFO multiple of approximately 11.5 times based on its 2025 FFO of $1.87 per unit. This is noticeably lower than its five-year historical average, which typically ranges between 13 times and 14 times.

For income-focused investors, the reward for patiently holding RioCan REIT units is a 5.5% distribution yield, paid in monthly installments that have been increasing for four consecutive years now.

While these distributions are steady and desirable today, there was formerly trouble. The REIT had to reset its payout in 2021 to better execute its current growth strategy while repurchasing units.

Take note that distributions from REITs are generally taxable as ordinary income. To maximize your returns, it is often best to stash these units in a tax-advantaged account like the Tax-Free Savings Account (TFSA) to keep the taxman away from your monthly cheques.

The post 1 Dividend Stock That Looks Like an Easy Decision to Buy on a Pullback appeared first on The Motley Fool Canada.

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Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Canada’s nation-building push has fast morphed from a political talking point to a massive industrial mobilization in 2026. It’s designed to insulate the country from trade impasses and global supply chain shocks while addressing the domestic housing crisis and insatiable power demands of an artificial intelligence (AI) boom. A multi-year infrastructure spend like this one represents a generational opportunity for Canadian investors to own stakes in growth stocks of companies physically building the foundations of a more economically resilient Canada.

The $1 trillion nation-building investment opportunity

The catalyst for Canada’s sudden urgency was a combination of disruptive tariffs and a realization that reliance on a single major trading partner for prosperity is a strategic vulnerability. The federal government has committed to massive expenditures to sustain economic growth and promote a structural transformation. Total federal spending may reach approximately $159 billion between 2025 and 2030.

Furthermore, the government expects its public seed money to attract more than $1 trillion in total private-sector investment, creating a multiplier effect that could define the TSX’s growth mood for years to come.

2 TSX stocks harvesting cash from Canada’s infrastructure projects

Two engineering and construction industry stocks stand at the forefront of Canada’s nation-building push, and they have already surged by 50% year to date. Bird Construction (TSX:BDT) stock and Aecon Group (TSX:ARE) stock are rising after spending the last year cleaning up their balance sheets and winning massive, high-margin contracts that are just now beginning to hit their income statements in 2026.

Bird Construction stock

Bird Construction stock is perhaps the most compelling “pure play” on this nation-building trend. The construction company entered 2026 with a staggering $11 billion backlog of future higher margin revenue, representing more than three years of guaranteed work already on the books.

BDT has strategically positioned itself to benefit from the AI boom by securing contracts for data centre construction, which requires specialized industrial expertise.

The beauty of BDT stock’s revenue and earnings growth story right now lies in the company’s execution of revenue and earnings growth. Through a combination of organic wins and smart acquisitions, the company has built a fortress balance sheet that allows it to take on these massive projects without the financial strain that often plagues smaller builders.

Aecon Group stock

Aecon Group is equally vital to nation building, but focuses on the heavy-lifting side of infrastructure. It’s a critical partner in the clean energy transition, particularly in the nuclear sector. It’s successful completion of Ontario’s Darlington Nuclear Refurbishment project, which finished under budget and four months ahead of schedule, has cemented its reputation as a premier operator for complex power projects. Its revenue backlog has surged from $6.7 billion at the end of 2024 to $10.7 billion heading into 2026.

While Aecon Group stock previously struggled with high-risk, fixed-price legacy projects, it has since transitioned to more favourable contract structures that protect its gross margins from inflationary pressure. Earnings per share could grow at triple digits rates over the next year or two.

Which Canadian infrastructure stock to buy right now?

Both infrastructure stocks have substantially taken off this year. New investors may wish to look past simple price movements and utilize a valuation methodology based on the Price-Earnings-to-Growth (PEG) ratio.

Bird Construction stock still trades at a reasonable forward price-to-earnings ratio of 12.9. With growing earnings, BDT’s forward PEG ratio of roughly 0.6 suggests the stock remains undervalued relative to its earnings growth potential.

Aecon Group stock also looks attractive from a growth perspective, sporting a forward PEG ratio between 0.2 and 0.6, even with a higher forward P/E of 23.7.

If you have to choose just one favourite buy right now, Bird Construction stock may take the prize. Its lower valuation, record-breaking backlog levels, and specific exposure to both the housing and blazing-hot data centre markets, among other infrastructure projects, make it a quintessential nation-building stock. As new contracts morph into revenue throughout 2026, BDT stock may deliver strong earnings growth that creates long-term wealth for patient retail investors. This is an investment opportunity where national necessity and corporate profitability are perfectly aligned.

The post These Stocks Will Power Canada’s Nation-Building Push in 2026 appeared first on The Motley Fool Canada.

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Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Vermilion Energy (TSX:VET) is positioned to benefit from surging oil prices in 2026 and its premium European gas exposure, enabling it to aggressively pay down debt and exceed production targets this year. This high-quality Canadian energy stock is quietly building German moats, beating production targets, and strengthening its balance sheet while the market is distracted by broader volatility.

With West Texas Intermediate (WTI) crude hovering near US$87 a barrel at writing, well above the US$60 range most Canadian oil producers budgeted for, TSX energy stocks are increasingly flush with “unexpected” cash. But unlike past cycles where profits were gambled away on expensive drilling expenditures, this oil rally is being used to fix the sector’s oldest and nagging problem: debt. One stock that increasingly exemplifies this disciplined, value-creating approach is Vermilion Energy.

Vermilion Energy stock’s 2026 production: More barrels, sooner than expected

Vermilion Energy stock started 2026 with a bang, pumping more oil and gas than even its own management initially predicted. New wells came online early, and the company’s pivot to natural gas is paying off with premium European pricing.

If you’re scanning for operational momentum, look at the first quarter. Vermilion produced approximately 125,000 barrels of oil equivalent per day (boe/d), beating the high end of its prior guidance for 122,000 to 124,000 boe/d.

What drove the production beat? Core Canadian assets in the Deep Basin and Montney outperformed, while German production ramped up ahead of schedule.

Crucially, only 28% of that production is liquids. The rest is gas — 59% Canadian and 13% European. That European gas piece is a desirable structural advantage. While North American gas prices can be fickle, European gas trades at a premium, and geopolitical tensions have widened that spread in Vermilion Energy’s favour.

A balance sheet fix: VET stock solving the “nagging challenge”

The biggest risk for Canadian energy stocks has always been high debt. Vermilion is fixing this fast, slashing net debt by $700 million in the last year alone. The balance sheet is increasingly an asset, not a liability.

The “nagging challenge” that has mostly haunted small and growing Canadian energy stocks is a history of high leverage from aggressive acquisitions and debt-funded capital expenditure budgets. Vermilion is actively erasing this financial drag.

In 2025, the company generated $1 billion in funds from operations (FFO) and a healthy $375 million in free cash flow. Instead of chasing growth at any cost, management fully funded its $635 million capital program and still reduced net debt to $1.3 billion. With a net-debt-to-FFO ratio of just 1.4 times, the company has ample breathing room now, and could exhale even better as debt reduction programs extend to 2026, with more cash flow generation capacity to support it. Vermillion even returned $116 million to shareholders via dividends and buybacks last year. A more encouraging financial year is setting up for 2026.

The Canadian energy stock’s quiet catalyst: Doubling down on Europe

While other Canadian energy stocks look to the Permian, Vermilion Energy is expanding in Germany, positioning itself for years of exposure to higher global gas prices.

Vermilion is quietly building a fortress in Europe. During the first quarter, the company doubled its German concessions acreage to over one million net acres and inked deals for additional producing assets. This is a long-term trade, a deliberate pivot toward a market where gas commands a structural premium and where deep gas exploration offers significant upside.

Speaking of upside, VET stock currently trades at a low forward P/E of 11, and a forward price-earnings-to-growth (PEG) ratio of 0.2 implies the Canadian energy stock could be undervalued given its strong earnings growth potential. Investors earn a 3.4% dividend yield while waiting for long-term capital gains.

Investor takeaway

Vermillion Energy stock may not essentially be a lottery ticket on oil prices but it’s a potentially rewarding bet on a management team that is using cash flow windfalls to build a leaner, stronger business in 2026. With production growing, costs falling, and debt shrinking, VET stock is a quiet setup for a strong year.

Yes, oil price volatility and potentially wider Canadian oil differentials remain risks. But for investors seeking a Canadian energy stock that is actually using high prices to create long-term value, Vermilion Energy stock is a compelling candidate. It’s an “improving-quality” business first, and a “surging oil” play second.

The post 1 Canadian Energy Stock That May Be Quietly Setting Up for a Strong Year appeared first on The Motley Fool Canada.

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Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool recommends Vermilion Energy. The Motley Fool has a disclosure policy.

The Canadian real estate investment trust (REIT) sector looks like a bargain bin full of high-yield passive-income specials right now. But not all real estate portfolios are created equal. Some retail shopping malls still signs of struggle with empty anchor stores. If you’re looking to put your money to work while you sleep, CT Real Estate Investment Trust (TSX:CRT.UN) is one high-occupancy retail REIT giant quietly churning out reliable and growing monthly cash payouts for investors.

With a fresh $10,000 investment, CT REIT is positioned to pay you $44.26 every single month (or $531.08 annually), and that’s just the starting point of a sustainable dividend growth story that’s already lasted 13 years.

CT REIT’s “all-star tenant” advantage

CT REIT’s growing portfolio of 375 retail properties comprising 31.7 million square feet of gross leasable area (GLA) makes it a passive-income seeker’s fortress during periods of market volatility. This REIT is essentially the landlord to convenience stores giant Canadian Tire, which accounts for over 90% of the REIT’s annual rent income.

Why should CT REIT make you sleep better at night? CT REIT boasts an almost unheard-of 99.5% portfolio occupancy rate while other REITs have to deal with vacancies from departing department stores. Your passive-income provider is anchored by Canadians buying motor oil, hockey gear, and patio furniture. It isn’t betting on a fickle fashion trend. CT REIT’s resilient, necessity-based retail moat pays the bills month after month.

A dividend raise every year? That’s how you beat inflation

Most investors may look at a 5.3% dividend yield and think, “Nice.” But smarter Foolish investors will look at the trajectory of that yield. Since CT REIT’s initial public offering in 2013, CT REIT has grown its rental income and raised its monthly distribution every single year. We’re talking 13 consecutive years of raises — a track record that has boosted the payout by more than 45% since inception.

CRT.UN Dividend data by YCharts

As ever persistent inflation keeps grocery bills climbing, the REIT’s consistent distribution raises help your passive-income stream fight back against inflation to retain your purchasing power.

Management delivered a 2.8% bump in adjusted funds from operations (AFFO) per unit in 2025, keeping the payout ratio incredibly safe at an AFFO payout rate of just 73.5%. AFFO measures a REIT’s most sustainable distributable cash flow from operations, and CT REIT’s low payout rate leaves a thick cushion of cash for more development expenditures and — you guessed it — more dividend hikes in 2026 and beyond.

As CT REIT’s CEO Kevin Salsberg noted during an earnings call in February, demand for Canadian retail space is outpacing supply, and CT REIT’s development pipeline — 629,000 square feet of which is 95.2% pre-leased predominantly to Canadian Tire — is pure, low-risk growth that builds more distributable cash flow and supports future distribution raises.

How to turn $10,000 into $44.26 per month passive income

At writing, CT REIT units traded for roughly $17.84 per unit and pay a monthly distribution of $0.07903 per unit. With $10,000 to invest for dependable passive income, the maths to transform the capital into a cash flow is shown in the table below.

A $10,000 investment buys about 560 CRT.UN units that pay $44.26 a month in distributions. That’s $530 a year you didn’t have to clock in to earn. And remember, that’s based on today’s payout. If the trust continues its 13-year streak of distribution increases, that $44.26 monthly paycheck is likely to be higher this time next year.

Should CT REIT investors worry about its “single” tenant concentration risk?

This is perhaps the only question that matters with this monthly dividend stock. Is it dangerous to have all your dividend eggs in the Canadian Tire basket? It would be terrifying if Canadian Tire was on financially or operationally shaky ground. But the chief tenant is thriving as its True North reset takes shape. The retailer carries an investment-grade BBB credit rating from Morningstar DBRS and its stores remain the go-to destination for the stuff Canadians actually need. Canadian Tire isn’t likely to struggle with paying its monthly rentals any time soon.

The post Got $10,000? This Dividend Stock Could Deliver $44.26 a Month in Passive Income appeared first on The Motley Fool Canada.

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Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

If you’re building a passive-income fortress inside your Tax-Free Savings Account (TFSA), you’re likely hunting for two things: income reliability and tax efficiency.

Let’s talk about the tax part first, because it’s where most Canadian investors trip over their own shoelaces. Income funds and Real Estate Investment Trusts (REITs) are wonderful creatures that pay no corporate tax as long as they shovel substantially all their profits into unitholders’ pockets. That’s fantastic, but it means the Canada Revenue Agency (CRA) comes knocking on your door. Those delicious monthly distributions are taxed as ordinary income.

The solution isn’t to avoid REITs and income trusts; it’s to house them properly. You stash them in a TFSA, hold long term, and let the compounding magic happen without a single dollar leaking to the CRA.

This brings us to a tiny Canadian REIT with an outsized 5.4% distribution yield and a track record that deserves a spot in the tax-sheltered corner of your stock portfolio: Canadian Net Real Estate Investment Trust (TSXV:NET.UN).

Canadian Net REIT: The little passive income powerhouse

Trading under $7 per unit, Canadian Net REIT isn’t as popular among retail investors as industry giants like RioCan REIT or Choice Properties REIT. It’s a small-cap player on the Toronto Stock Exchange’s Venture Exchange (TSXV) with a market cap hovering around $131 million. It’s still tiny, but sometimes it pays to be the minnow rather than the whale.

Canadian Net REIT’s portfolio is comprised of 97 single-tenant retail properties spanning about 1.5 million square feet of gross leasable area (GLA). Retail real estate puts bread on the table — literally. The tenant roster is anchored by grocery giants Loblaws (18% of NOI) and Sobeys (16%), alongside Walmart and Metro as major tenants.

Invest for steady financials and growing TFSA payouts

There were a few numbers in the REIT’s 2025 financials that should make income investors lean in closer.

Rental revenue bumped up 7% year-over-year, but net operating income (NOI) leaped 10%. Even better, adjusted funds from operations (AFFO) per unit – the true lifeblood of a REIT’s distribution – climbed a cool 12% during the past year.

And here’s the stat that should let you sleep soundly at night: The payout ratio based on the AFFO dropped from 61% in 2024 to just 55% in 2025. The REIT is earning nearly twice as much cash as it needs to pay you your monthly dividend. That’s a massive cushion in an industry where some Canadian REITs are skating on thin ice with above 90% AFFO payout ratios.

Canadian Net REIT has paid distributions every single month since 2012 without a skip. The annual distribution has grown from $0.13 per unit in 2012 to $0.348 today. The only year they held the distribution flat was in 2020 – and if you remember COVID-19 pandemic lockdowns of 2020, you’ll forgive any retail landlord for being a little cautious.

Any risks to consider with this TFSA stock?

There’s always a catch, but on Canadian NET REIT, the income investing risks aren’t that unsettling.

The trust’s Quebec concentration is a significant factor to digest. Roughly 80 of the 97 properties are in the Quebec province. That’s a provincial economic bet, whether you intended to make one or not.

Secondly, consider the single-tenant gamble. The REIT’s portfolio is 100% occupied, a rarity even among the best industrial REITs, with a weighted average lease term of 5.9 years. But with single-tenant properties, if a Loblaws or Sobeys decides to pack up and leave when the lease matures, that’s a 100% vacancy on that asset instantly.

And lastly, let’s acknowledge the venture exchange discount. Being on the Toronto Stock Exchange’s Venture Exchange means less liquidity and a bit more volatility than the big boards. Of course, it also means there’s potential upside if (or when) the small REIT graduates to the TSX main board.

The Foolish bottom line

Canadian NET REIT is a monthly income investment that could deliver for Canadian investors looking to deploy cash in a TFSA stock and simply forget about it for a decade. It offers a compelling mix of a sustainable 5.4% yield and a management team that clearly respects the dividend.

Its tenants sell groceries and gas – the last things Canadians stop buying during recessions. That steady cash flow, compounded tax-free inside a TFSA, could be how you turn a modest $7 stock into a meaningful passive income stream.

The post Why This Steady 5.4% Yield Makes an Ideal TFSA Stock appeared first on The Motley Fool Canada.

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Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Net Real Estate Investment Trust. The Motley Fool has a disclosure policy.

While high-yield traps and deep-value bargains can look tempting, they aren’t nearly as reliable as the steady 3% to 5% yields that TSX dividend stocks offer passive-income investors. Dividend stocks share a portion of their annual income with investors as regular dividends. Among the top Canadian dividend stocks, real estate investment trusts (REITs) reign supreme as monthly income sources. And Granite Real Estate Investment Trust (TSX:GRT.UN) stands out as one of the most dependable monthly dividend stock picks on the entire exchange.

Let me be honest with you. In April 2025, greed got the better of me. Viewing it as a turnaround play, I fell for Allied Properties REIT’s 11.4% distribution yield after Canadian office market figures showed some recovery promise. For six months, capital gains alone delivered a 40% return. But by September, portfolio occupancy hadn’t materially improved. The payout ratio soared past 100%, debt kept rising, and management slashed the payout by 60% that December.

That’s when diversification became a saviour. And it’s exactly why I’m emphasizing turning to dependable monthly dividend stocks that don’t keep you up at night.

A dependable passive-income investment

Granite REIT is a $5.4 billion Canadian industrial property REIT that has delivered 15 consecutive years of distribution increases. Formerly a real estate subsidiary of auto giant Magna International, Granite still counts Magna as a significant tenant (26% of annual rent), but tenant diversification and portfolio growth have made it a trusted passive-income play to own in 2026 and beyond.

In November 2025, Granite raised its monthly payout by 4.4% to $0.296 per unit, yielding a rock-solid 3.8% today. More importantly, its most recent payout ratio sits at just 66% of adjusted funds from operations (AFFO) — one of the safest distribution coverage levels in the Canadian REIT space.

AFFO measures a REIT’s most distributable cash flow from operations, after property maintenance costs. Management forecasts Granite REIT’s AFFO per unit to grow 4% to 7% in 2026, which means more room for future distribution raises from this dependable dividend stock.

Why this reliable monthly income play works

Granite’s high-quality logistics hubs remain in high demand despite U.S. tariff fears and Canada’s macroeconomic shocks. Going into 2026, in-place occupancy was 98%, up 310 basis points year over year. By February 25, 2026, committed occupancy had hit 98.6%. Even as new industrial property supply has cooled the industrial REIT “sector,” Granite’s properties are nearly fully occupied today.

Most impressive: Granite REIT recognized average rent spreads of 45% over expiring rents in 2025, with same-property net operating income (SPNOI) rising 5.6% on a constant-currency basis. Management sees SPNOI rising by 6% this year.

If you love discounts, Granite REIT’s units trade at a 10% discount to their most recent net asset value of $103.43 per unit.

What about tariffs and Canadian industrial REIT risks?

U.S. tariffs on Canadian goods remain a real concern during the Trump administration. But Granite REIT owns properties across North America and Europe, with a balanced portfolio that reduces single-country risk. The REIT’s diversified tenant base — logistics, warehousing, and advanced manufacturing — remains resilient. Tariffs haven’t materially impacted occupancy or rent collection to date.

And the trust’s current At-The-Market (ATM) equity program? Granite REIT may issue up to $250 million in new equity at market prices to fund acquisitions (like the $292.3 million of U.S. and U.K. assets bought during the fourth quarter of 2025). Management is deploying capital quickly, and dilution has been minimal. The REIT’s payout ratio has stayed low, while AFFO per unit keeps growing. I would view the ATM program as a welcome capital raising program that’s responsibly expanding the dependable dividend stock’s income-generating capacity.

The Foolish bottom line

Granite REIT checks every box for investors who want a dependable monthly dividend stock without the heartburn of double-digit yield traps. A near 4% yield paid monthly, 15 consecutive years of raises, a conservative 66% AFFO payout ratio, and a portfolio running at full occupancy combine to provide the kind of sleep-well-at-night passive income to Canadian TFSAs or RRSPs.

The post A Dependable 4% Dividend Stock That Pays You Every Month appeared first on The Motley Fool Canada.

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Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool recommends Granite Real Estate Investment Trust and Magna International. The Motley Fool has a disclosure policy.

Canadian telecom sector giant TELUS (TSX:T) stock offers a jaw-dropping 9.9% annual dividend yield. That’s more than double the 4.4% you’d get from Rogers Communications (TSX:RCI.B) and nearly double BCE (TSX:BCE) stock’s 5.3% payout.

But here’s the catch: TELUS paused its semi-annual dividend growth policy back in December 2025. The quarterly payout remains stuck at $0.4184 per share and could stay flat all the way through 2027. For passive income investors, that’s a worrying signal. What if management decides to cut the juicy payout so the yield falls towards “current industry norms”?.

So, is the payout still worth counting on for passive income purposes? Let’s break down the risks – and the reasons for hope.

What threatens TELUS’s dividend?

After a period of heavy capital spending, TELUS exited 2025 with a net-debt-to-EBITDA (adjusted earnings before interest, taxes, depreciation and amortization) ratio of 3.4 times – elevated by historical standards. If interest rates climb again before the company successfully deleverages, interest costs could surge, squeezing distributable cash flow.

Worse, wireless average revenue per user (ARPU) keeps declining thanks to fierce price competition. During the fourth quarter of 2025, adjusted net income fell 18.4% year over year. Based on earnings, TELUS stock’s dividend consumes more than 100% of normalized earnings.

But here’s the twist: because TELUS carries expensive telecom equipment on its balance sheet, leading to heavy depreciation and amortization charges, the earnings payout ratio isn’t the right metric to watch. Investors should watch cash flow instead.

Three reasons TELUS stock’s dividend will survive

TELUS stock’s dividend may easily survive a chop because the company is growing its free cash flow (FCF), its revenue base is still steadily growing in the low single digits, and management is working on strengthening the balance sheet through debt repayments.

Free cash flow is king. It basically measures the discretionary cash from operations, after sustaining capital expenditures. Management may choose to use free cash flow to pay down debt, reinvest to grow the business, or to reward shareholders through dividends and share repurchases.

TELUS reported record FCF growth in 2025, up 11% year over year. Management targets 10% annual FCF growth through 2028, which would sustain a recent trend and comfortably cover the dividend. Lower capital spending in 2026 means more operating cash flow to service the dividend payout.

T Free Cash Flow (Annual) data by YCharts

TELUS’s revenue keeps growing. Canadian population growth, steady adoption of TELUS Digital, and client wins are driving top-line expansion. Potentially growing contributions from TELUS International also diversify cash flow.

Most noteworthy, deleveraging is underway. Real estate monetization and non-core infrastructure sales will help pay down debt and reduce interest expenses. Interestingly, TELUS already boasts the strongest balance sheet among Canada’s Big Three telecoms:

Investor takeaway: FCF vs. debt argument

TELUS stock has the cash flow capacity to sustain its dividend at current levels. Management’s payout ratio guideline of 60% to 75% of free cash flow should be achievable going forward.

But the market’s skepticism is still baked right into that 9.9% yield. Investors are clearly worried about the debt. Progress on repayment will be the single most critical factor to watch.

If interest rates start rising again before TELUS hits its deleveraging targets, management may prioritize debt reduction over the dividend. And that could mean a cut.

A near-10% payout is never a free lunch. This one still comes with real risk, but for patient investors willing to monitor the balance sheet, TELUS’s dividend may just survive.

The post Is TELUS’s Dividend Still Worth Counting On? appeared first on The Motley Fool Canada.

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Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool recommends Rogers Communications and TELUS. The Motley Fool has a disclosure policy.

Saving money is a vital first step toward financial security, but the real magic happens when you transform those savings into a productive investment portfolio. For many Canadian investors, the ultimate goal is to make a reliable, consistent stream of passive income that can supplement a lifestyle or fund a long-term retirement.

With $50,000 in capital, you have several opportunities to turn that dry powder into a significant annual dividend stream yielding nearly 6% per annum. Pipelines giant South Bow (TSX:SOBO) stock is one of the premier candidates to do the heavy lifting in a modern dividend portfolio.

A passive income investment case for South Bow stock

Investors seeking substantial and reliable passive income should take a close look at South Bow stock right now. As an operator of critical crude infrastructure, the company owns approximately 4,900 kilometres (3,045 miles) of pipelines connecting Canadian oil production to vital U.S. refineries.

What makes South Bow stock particularly attractive for income seekers is its utility-like business model. The company enjoys stable cash flows underpinned by take-or-pay contracts with Canadian oil producers. This market is currently in a growth phase as oil-sands production continues to expand, providing a solid foundation for the company’s revenue and distributable cash flow.

Growth catalysts in 2026 and beyond

South Bow stock is actively growing its cash flow base. A major milestone was reached on March 1, 2026, when the company placed its Blackrod Connection Project into commercial service. This was the first major growth project completed since South Bow spun out of TC Energy in October 2024.

Execution on the Blackrod project was exemplary, as it arrived both on schedule and on budget. The project began contributing to operating cash flow this quarter, a trend expected to continue through 2027. Furthermore, management’s performance has already exceeded expectations: distributable cash flow for 2025 reached $709 million, surpassing the initial guidance of $700 million.

How to turn $50,000 into $2,988 in annual passive income

South Bow pays its dividend in U.S. dollars, which currently offers a lucrative yield for Canadian investors. At current prices, the stock yields approximately 5.9% annually. Here is how a $50,000 investment breaks down:

If the Canadian dollar weakens against the USD in the future, the effective yield for Canadian holders could climb even higher.

Financial health and sustainability

For a dividend to be reliable, it must be well-covered by recurring cash flows. South Bow pays roughly $104 million in quarterly dividends ($416 million annually), which is comfortably covered by its growing distributable cash flow.

The company is also focused on strengthening its balance sheet. South Bow entered 2026 with a net debt position of $4.8 billion. Its leverage metric, measured as net debt-to-normalized earnings before interest, taxes, depreciation and amortization (EBITDA), stood at 4.7 times at the end of 2025, which was significantly better than management’s original expectations for 4.8.

As debt levels decline and new revenue from projects like Blackrod chip in, the dividend’s security should only improve through 2027.

Management may review the dividend for a potential raise as SOBO moves towards attaining a net debt ratio of 4. Your passive income stream could grow.

A Foolish reminder: Diversify

While South Bow offers high-quality, stable cash flows, it’s always advisable to spread your capital across many dividend stocks, sectors and asset classes to diversify your capital and income risks. If $50,000 represents a significant portion of your total portfolio, consider splitting that investment across multiple Canadian dividend payers.

Spreading your capital across various sectors, such as energy, telecommunications, and Real Estate Investment Trusts (REITs), lowers the risk that a single company’s dividend cut will derail your entire passive income strategy. South Bow is an excellent anchor for an income portfolio, but it works best when paired with other reliable TSX dividend giants to ensure long-term financial resilience.

The post How Putting $50,000 Into This High-Yield Dividend Stock Could Generate $2,988 in Annual Passive Income appeared first on The Motley Fool Canada.

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Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

If you are looking to bolster your passive income this month, Parex Resources (TSX:PXT) and High Liner Foods (TSX:HLF) are two Canadian dividend stocks that deserve a closer look right now. The two companies have religiously grown their dividend payouts over the past five consecutive years – a prestigious achievement. One is riding a crude oil wave, while the other has recently experienced what could be a temporary decline that raised its yield to 5% annually.

Let’s see why one of these stocks looks worth adding to your passive-income focused dividend portfolio.

High Liner Foods: A dividend stock to buy at a discount

Frozen seafood processor High Liner Foods has pulled off a noble feat by increasing its dividends at an average annual rate of 20% over the last five years. However, the Consumer Defensive sector stock recently hit a rough patch, dropping nearly 15% over the past month, and this could be an opportunity to load up on HLF stock.

The excruciating dip on High Liner Foods stock was triggered by an 11.2% decline in adjusted operating income for 2025. The company faced a perfect storm of margins-reducing input cost pressures, tariffs, and temporary high inventory costs following its acquisition of Conagra Brands.

From an income investing perspective, could the payout be at risk? Hardly. High Liner recently raised its quarterly dividend in November 2025 to $0.175 per share. The payout yields a solid 5% annually, and with a historical earnings payout rate of just 40%, which compares very well to an industry average of 77.5%, the dividend appears well-covered right now.

Management is currently engineering a return to adjusted EBITDA (adjusted earnings before interest, taxes, depreciation and amortization) growth for 2026. As part of a major restructuring to enhance margins, the company cut 9% of its North American office workforce in March this year.

At a forward P/E of just 8.9, the stock is objectively cheap and poised for a revaluation as these cost-cutting efforts take hold.

Parex Resources stock

For energy-focused investors, Calgary-based Parex Resources offers a unique combination of aggressive growth and dividend income. The stock could one day earn a place in the prestigious S&P/TSX Dividend Aristocrats Index after raising its payout for five consecutive years.

Parex is currently on the cusp of a transformation. If its US$725 million acquisition of Frontera Energy (TSX:FEC) assets closes as expected in the second quarter of 2026, Parex could nearly double its upstream production rates. This deal may grow revenue and increase operating cash flow per share by more than 40%.

Parex currently offers a juicy yield of 5.6%. Management has already indicated its commitment to maintaining the $0.385 per share quarterly payout post-acquisition, with room for marginal increases as the balance sheet deleverages.

While oil prices are always a factor, the dividend appears well-covered even at pre-Iran war crude prices in the US$60s per barrel. Given that the recent Iran war has entered a ceasefire period, reconstruction efforts may keep global crude logistics tight and oil prices elevated for longer.

Buying PXT today lets you own a growing producer at a historical P/E of just 7.5 – an attractive multiple for an undervalued Colombian energy producer committed to returning capital to shareholders.

Investor takeaway

Both High Liner Foods and Parex Resources stock offer single-digit earnings multiples and a proven commitment to dividend growth. Whether you prefer the potential consumer defensive revenue stability of seafood or the high-upside potential of Colombian oil, these two stocks look like dividend-stream bargains worth adding more of right now.

The post 2 Dividend Stocks That Look Worth Adding More of Right Now appeared first on The Motley Fool Canada.

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Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool recommends High Liner Foods and Parex Resources. The Motley Fool has a disclosure policy.

Munching on passively earned dividend income is one of life’s great pleasures – especially when you’re retired. Many top Canadian dividend-paying companies understand this, which is why they regularly boost the regular payouts they send to shareholders. Some dividend giants have turned raises into an art form. Canadian Utilities (TSX:CU) stock has increased its dividend for 54 consecutive years. Fortis (TSX:FTS), another TSX-traded utility stock, isn’t far behind with 52 straight years of rising dividend payouts.

But here’s the thing: CU stock currently yields just 3.8%. So what has half a century of dividend growth actually done for long-term investors? Let’s forget 1972 for a moment (the year when CU stock’s dividend growth streak began with a split-adjusted $0.065 annual dividend). Instead, zoom in on the past 30 years – a timeframe that feels real for anyone retiring today.

An investor who bought CU stock in April 1996 at a split-adjusted price of $6.60 per share would be collecting a $1.85 annualized dividend in 2026. That’s a staggering 28% yield on their original cost! Early investors get back their entire initial investment every 3.5 years from dividends alone. Any future payout hikes just pile on top.

The secret? Buy a quality Canadian dividend stock with strong earnings and growing cash flow, even when it offers a low yield, and hold tight for the longest time.

2 TSX dividend growth stocks that raised payouts recently

While some companies announce dividend hikes with great fanfare, others are quietly building their own impressive track records. Here are two Canadian dividend growth stocks you may have missed: Power Corporation of Canada (TSX:POW) stock and BRP Inc. (TSX:DOO) stock.

Power Corporation: A 9% hike that doubled the dividend in a decade

Power Corporation of Canada is a $40 billion financial conglomerate with fingers in insurance and asset management. On March 18, 2026, it raised its dividend by 9% – marking 11 consecutive years of payout growth.

The company is also ramping up share buybacks to fight a persistent “conglomerate discount.” At writing, POW stock trades at a 20% discount to its net asset value (NAV) of $85.77 per share. That’s a potential bargain hiding in plain sight.

The recent hike lifts POW’s yield to 3.9%. But for investors who bought the conglomerate’s stock a decade ago, the yield on cost is now a juicy 8.8% after the dividend has doubled over those 10 years. That dividend growth helped turn a 135% capital gain into a 298% total return.

BRP joins an elite club of TSX dividend stocks

Recreational vehicle maker BRP Inc. – the company behind Ski-Doo, Lynx, and Sea-Doo – raised its quarterly dividend by 16.3% to $0.25 per share in March 2026. That marked five consecutive years of dividend growth, earning DOO stock a spot in the prestigious S&P/TSX Canadian Dividend Aristocrats Index this past February.

BRP’s dividend has now grown 127% since December 2020, recovering smartly from a COVID-19 disruption. And it achieved this despite early sales threats from U.S. tariffs once introduced in 2025. Fiscal year 2026 (ended January) saw sales rise 6.8% to US$8.4 billion, with normalized earnings per share up 7.2% – beating management’s own guidance.

Management felt confident enough to raise the dividend again as it projects strong adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) to grow 40% this quarter.

Yes, DOO stock’s current yield is only 1%. That’s what happens when shares have soared 164% over the past decade. You don’t buy BRP for passive income today – but the rising payout has helped push 10-year total returns past 180%.

The Foolish bottom line

Consistent dividend growth is a telltale sign of a strong, well-run profitable business with stable cash flow. Whether you’re chasing a 28% yield on cost like long-term CU stockholders or betting on the next dividend champion like BRP, the formula is simple: buy quality, hold tight, and let those dividend raises compound. Your future retired self will thank you for creating a passive income source for the golden years.

The post The Canadian Companies That’ve Been Quietly Raising Their Dividend Payouts appeared first on The Motley Fool Canada.

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• How Splitting $30,000 Across 3 TSX Stocks Could Generate $1,315 in Dividend Income
• Canadians: Here’s How Much You Need in Your TFSA to Retire
• 2 TSX Stocks I’d Buy Before the Next Market Dip

Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool recommends BRP and Fortis. The Motley Fool has a disclosure policy.