Shopify (TSX:SHOP) reported third-quarter 2025 results, which surpassed guidance across the board — yet the stock sold off.

Motley Fool lead advisor Jim Gillies explains what’s going on with Shopify stock and whether it’s a buy now. Prefer to read? There’s a transcript below.

Is Shopify a good stock to buy?

Nick Sciple: I’m Motley Fool Canada Senior Analyst Nick Sciple, and this is The Five-Minute Major, here to make you a smarter investor in about five minutes. Today, we’re discussing Shopify’s third-quarter 2025 earnings and what’s behind the stock’s reaction. My guest today is Hidden Gems Canada lead advisor Jim Gillies. Jim, thanks for joining me.

Jim Gillies: Thanks for inviting me, Nick.

Nick: Shopify just reported their third-quarter 2025 earnings results. They surpassed their guidance across the board, yet the stock sold off. Last I checked, it was down about 4% in middle of the day here on Tuesday, November 4. What is going on with Shopify today?

Shopify’s third-quarter 2025 earnings

Jim: This was a great quarter, in my opinion. You had gross merchandise volume, GMV, up 32%. You had revenue also up 32%.

Gratifying to see as a long-term owner of Shopify, that didn’t really make a lot of cash in the early days. I think going back to 2016 when we bought it, early 2016, now is clocking in at free cash flow margin of 18%.

These revenue and GMV growth — if you look over the past couple years, quarter to quarter — performances, frankly, in the last eight quarters. I thought it was an excellent quarter, just in general. As you mentioned, they surpassed guidance on every front.

There’s not much more to say. I mean, their guidance for going forward was also excellent. Originally guidance for this quarter was revenue in the mid-20% range up. Like I said, it came in at 32%. They do tend to be a little sandbaggy, I think, if that’s even a word. But, you know, honestly, it was pretty good.

Why is Shopify stock falling?

The only reason I can see for selling the stock off is just it is a richly valued stock. There’s about 21 times sales, 22 times sales coming in. I generally hate the sales multiple, but it’s what we’re going to use for these high-growth names.

But, my take on it is high revenue growth forgives a lot of sins, okay? And, Stock Advisor Canada and the now-defunct Pro Canada, we both bought this in Q1 of 2016, I believe, and at about $4 or $5 Canadian per share.

And we’ve maintained those positions, or at least Stock Advisor has. And the rationale at the time was high valuation, but revenue growth could go on forever and ever in investing terms.

High revenue growth forgives a lot of sins. So, for example, if they hit their Q4 guidance, which is for low to mid-20% range, so let’s say they do 22%, okay?

If they do 22% revenue growth over Q4 of 2024, the incremental revenue that is produced by that growth rate will be roughly 3 times the trailing 12 months’ revenue at the time we recommended it in Stock Advisor Canada.

And that, to me, is remarkable, and they’re not slowing down. If anything, they’re speeding up.

Nick: Jim, you raise an important point, right? When you see a company come out there, beat expectations really across the board, and the stock trade down, often the answer is the stock market is overvalued, or potentially the valuation of the stock got a little bit ahead of what the company was able to deliver. But if you look over the long pull of the history of Shopify’s presence on the public market, it’s been a highly valued company that’s been able to continue to exceed the market’s expectations year over year, if maybe not every single quarter.

Is Shopify stock overvalued today?

As you think about Shopify today, how are you thinking about the company’s valuation from here and its ability to potentially keep raising the bar?

Jim: I think the valuation remains rich.

We literally said in the original recommendations in Stock Advisor Canada and Pro Canada back in 2016, we said, look, it’s gonna hit an air pocket at some point. And by the way, it has, several times. I think it fell almost 70% from November 2021 through 2022.

These things are richly valued, but as I said, revenue growth forgives a lot of sins. So a company like this, it’s going to perpetually look rich until the growth slows, and if anything, growth has been accelerating in recent quarters.

So even at 21 times sales, which, again, I hate the sales multiple, for valuation purposes, but I think it’s very, illustrative here.

This will continue to be richly valued, but as long as they’re posting that growth, I think it’s warranted. There was a little throwaway comment in the press release about global iconic brands taking on more and more space in the Shopify universe. And they specifically called out Estee Lauder. But even in my own day-to-day life, we’ve seen it move away from these small and medium-sized businesses that we originally were attracted to for the story nine years ago. Like, my local junior hockey team, their merch sales are all through Shopify. Netflix Canada, last I checked, was using Shopify, to do their order-taking and what have you. The Globe and Mail, Canada’s national newsletter, guess who they use? Again, Shopify.

And this is just, you know, intrinsic to Canadians in Ontario. The Ontario online cannabis sales, so it’s all regulated by the government. If you don’t want to go to one of the 35 pot stores in your local neighbourhood, you can order online. Guess who powers that? Of course, it’s Shopify, and you can go on and on and on.

That is something that I think is really, really valuable, and kind of not really appreciated in the Shopify story, even today. It’s kind of become the choice of who you’re going to go to to provide your online sales.

It’s starting to look to me like Shopify’s kind of the first choice, and maybe the last choice for a lot of people, so I think that’s excellent.

Nick: Shopify looks like the type of company that can continue to become the default when it comes to online commerce. It’s important to remember this is a stock that was up more than 60% coming into this earnings report. So while the stock may be taking a little bit of a tumble post-earnings over the long pull, it’s been a great performer, and the longer your time horizon is, the less important these quarter-to-quarter fluctuations become. It’s not the two-day, two-week, two-month moves that matter, it’s the two-year, two-decade moves that really make the big money for you as an investor.

That’s all the time we have for this edition of the Five-Minute Major. If you want some more stock ideas from us, maybe the next Shopify, you can click the icon in the upper right corner of your screen. Thank you for joining us for this edition of the Five-Minute Major, and we’ll see you next time.

The post Is Shopify Stock a Buy After Crushing Its Q3 Guidance? appeared first on The Motley Fool Canada.

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Fool contributor Jim Gillies has positions in Shopify. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.

The U.S. government is partnering with Westinghouse Electric to build nuclear reactors, and Westinghouse just happens to be owned by Canadian powerhouses Brookfield Asset Management and Cameco.

Motley Fool senior analyst Nick Sciple breaks it down in this short video. Prefer to read? There’s a transcript below.

Iain Butler: I’m Motley Fool Canada Chief Investment Advisor Iain Butler, and this is “The Five-Minute Major,” here to make you a smarter investor in about five minutes.

Today we’re discussing the massive $80 billion nuclear deal and what it means for Canadian investors.

My guest today is Fool Canada senior analyst Nick Sciple. Nick, thanks for joining me.

Nick Sciple: Great to be here with you, Iain. It’s fun to be in the other chair today.

Iain: We’re gonna drill you here on this big deal.

$80 billion deal to build nuclear reactors in the U.S.

Earlier this week, big news: An $80 billion partnership announced between the U.S. government and two very big Canadian companies, Brookfield Asset Management (TSX: BAM) and Cameco (TSX: CCO). Can you break it down, Nick, what this deal is, and why it’s happening right now?

Nick: This is a first-of-its-kind partnership that is set, as you say, to build at least $80 billion of new nuclear reactors across the United States. In terms of what’s going on, the U.S. government is partnering with Westinghouse Electric, one of the leading companies building nuclear reactors around the world. The U.S. government will help arrange the financing and secure permits to get these plants built as part of the broader agenda to maximize U.S. energy output and achieve energy sovereignty.

Obviously, it’s a huge story for Canadian investors because Westinghouse is co-owned by two big Canadian-based companies, that being Brookfield Asset Management, which owns 51% of Westinghouse, and the uranium mining giant Cameco, which owns the other 49%. So these Canadian firms are at the absolute center of this American nuclear renaissance. They are the equity holders in the company that’s going to be building these new, big reactors. The big driver for this nuclear renaissance, as I’m sure folks have seen, is the insatiable demand for power from artificial intelligence and data centres.

This AI power boom is causing U.S. power demand to grow for the first time in the better part of two decades and is straining the grid. AI needs massive, 24-7 reliable power, and nuclear energy is one of the only carbon-free ways to do that at scale.

Iain: Awesome. Perfect rundown. And I think, just to throw a blanket over everything here, we Canadian investors are sort of missing out on all the semiconductor sort of technical aspects of this AI boom. Where we are fitting in, or I was going to say plugging in, is the energy side of the equation.

So, what are the short-term, long-term implications for Canadian investors of this deal specifically, especially regarding both Cameco and Brookfield?

Nick: The short-term reaction, you saw it on the day of the announcement. Cameco’s shares up over 25% on the day the deal was announced.

That’s not just because of the ownership in Westinghouse, where they are a co-owner of the reactor builder, but they also offer secure Western-based fuel supplies for the uranium that you’re going to need to run these plants. And then if you look longer term, this deal is structured to be very lucrative for the U.S. government, for Cameco, and for Westinghouse. The U.S. government gets a 20% share of future profits from Westinghouse, but that’s only after Westinghouse has paid out at least $17.5 billion in profits to Cameco and Brookfield. There’s also a clause where the U.S. government can require an IPO of Westinghouse by 2029 if the value of that subsidiary surpasses $30 billion.

The U.S. federal government would like to lock in those gains. I think Cameco and Brookfield will as well. So this puts Westinghouse on a real clear path to IPO. That said, there are some risks. Investors need to remember that building nuclear reactors is notoriously difficult and expensive. The last two Westinghouse reactors built in the U.S. were about 7 years behind schedule and ran at more than double their original $14 billion estimate. In fact, those cost overruns are what drove Westinghouse into bankruptcy back in 2017. It’s why this is a company that’s owned by Brookfield Asset Management.

today. Also, another point on kind of where we are in the nuclear cycle … that plant that was abandoned back in 2017 for cost overruns?

Just this past month, announcements that Brookfield is going to partner with the government in South Carolina to try to get that facility back underway and under construction. So we’re in an environment where all hands on deck for AI power demand, that’s leading to potential for new construction, and also picking up all the scraps that are out there for potential energy production in the near term. So while the U.S. government is promising to fast-track these permits, and that can help put this new construction on better footing, there is still execution risk on these projects, and that is massive. So, like all things when it comes to investing, this situation is not without risk, but this deal continues this emerging theme that power demand from AI is only going to go up in the years ahead, and that nuclear energy is going to be a key player in meeting that demand. That should be music to the ears of Canadian investors like Brookfield and Cameco. And also, if we look out broader in the Canadian market, I think there’s going to be more opportunities for uranium producers and talented nuclear engineers, which Canada has many, to contribute to this boom.

Iain: Just, on the Brookfield angle, this is such a Brookfield story. This is what Brookfield does. They pick up struggling assets, like Westinghouse in 2017, and they see the value in it, bring it up to snuff, and, they’re gonna benefit for years and years ahead. Okay, just over 5 minutes. Thanks for joining us. If you want more stock ideas from us, please click the info icon in the upper right corner.

The post Why an $80 Billion Nuclear Deal to Power AI in the U.S. Means Profits for Canadian Investors appeared first on The Motley Fool Canada.

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Fool contributors Iain Butler and Nick Sciple have no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Asset Management and Cameco. The Motley Fool has a disclosure policy.

By investing in Rogers Communications (TSX:RCI.B), you can become a (very small) part owner of the Toronto Blue Jays. But should you? Motley Fool advisor Jim Gillies walks you through it. Prefer to read? There’s a transcript below.

Nick Sciple: I’m Motley Fool Canada Senior Analyst Nick Sciple, and this is “The Five-Minute Major,” here to make you a smarter investor in about five minutes. Today, we’re discussing the Blue Jays’ return to the World Series for the first time since 1993 and how investors can actually own a piece of Canada’s baseball team.

My guest today is Hidden Gems Canada Lead Advisor, Jim Gillies. Jim, thanks for joining me.

Jim Gillies: Thank you, Nick. As a lifetime Blue Jays fan, very pumped about this.

Nick: I’m pretty sure all of Canada knows the Blue Jays are back in the World Series for the first time since Joe Carter’s historic walk-off World Series-winning home run, but fewer folks probably know that the Blue Jays are owned by Canadian telecom giant Rogers. What’s Rogers’s relationship to the Blue Jays and to Canada’s pro sports ecosystem as a whole?

Jim: Rogers IS Canada’s pro sports ecosystem, or at least a good chunk of it. Certainly in Toronto, they pretty much own everything. They own the assets, the teams. Rogers, of course, owns the Blue Jays, who play in the Rogers center, formerly known as the Sky Dome.

All 162 games a year are broadcast on SportsNet, sort of Canada’s version of ESPN, which is owned by Rogers. Rogers, of course, sells the advertising for the game in stadium, or in stadiums, as well as over the air. So they own the team, they own the stadiums, they own the media, distribution, advertising.

And if you’re watching this over your high-speed Internet connection, either on your mobile devices or in your home, that’s probably also provided by Rogers, the telecommunications guys. They’re the largest player in Ontario, one of the largest players in Canada.

The thing is, Nick, it’s not just the Blue Jays.

Rodgers now also owns a controlling stake, 75%, in Maple Leaf Sports and Entertainment, MLSE, which owns the Toronto Maple Leafs (the most valuable team in the NHL), the 2019 champion Toronto Raptors, the Toronto FC soccer team, the Toronto Argonauts of the Canadian Football League, as well as the Leafs’ AHL (the minor league affiliate) the Toronto Marlies. It also owns the Scotiabank Arena, which is the home of the Leafs and the Raptors; and BMO Field, home of TFC and the Argos, and the Coca-Cola Coliseum, home of the Marlies. Most of these are all available, at least in part, via SportsNet, and those that aren’t on SportsNet are sold off to other carriers, so, for example, the Leafs will sell off some of the rights to competing network TSN.

Because Rodgers has the media rights for the NHL through 2037, 2038. And I could keep going, but basically the gist is, they kind of own Toronto sports, and they own most of Canadian sports as well.

Nick: That’s right, if you think about the crown gems, the Infinity Stones of Canadian sports, Rogers has completed the gauntlet. Investors, rightfully though, have historically focused on the telecom side of the business, which is much bigger than the sports and media side of the company. However, the sports side of the business is growing. All signs point to the company buying an additional 10% or 20% stake in MLSE in 2026, next year, when they have the option to do so. Why might now be an interesting time to consider looking at the sports side of the Rodgers portfolio?

Jim: So, investing in Rogers, which is a publicly traded company on the TSX, it’s RCI.B is the ticker, investing in Rogers for the sports portfolio is kind of problematic, because even everything I’ve just described to you, and the breadth of all of it is all in what they call the media division.

The media division accounts for between 12 and 14% of total revenue for Rodgers. Meaning, even if the Jays have an amazing year — and they did — and even if they win the World Series — they might — (murderer’s row for starting pitching for the Dodgers and some guy named Otani, notwithstanding) and they managed to boost revenues substantially, it’s still likely the media division only caps out at about one-sixth of total revenue.

And that’s in an aberration year where the Jays finished first and are going to the World Series. A year ago, they finished last, and revenues, we’ll say, were lower.

You didn’t have a difficult time picking up a ticket, I’ll put it that way.

But you also live in a world where the value of sports franchises is only going up. Live sports are valuable, right? It’s one of the few things we can watch in real time, rather than just having to Netflix it in three to six months, or whatever.

And so, hidden asset values aren’t always reflected. You can own these things. And Rogers has been a terrible investment for a decade. It’s gone nowhere for a decade; the market’s more than doubled. So, bluntly, I have no interest in Rogers, the company, even with all their riches of the sports and the communication.

But that said, there are rumblings that Rogers is contemplating spinning out the media division on its own as a publicly traded entity, similar to MSG, which is the holding company that owns the New York Rangers and Knicks.

Those rumblings are openly speculating on a spin-out or an IPO of a minority stake of the media division that, if fully valued, would raise substantial capital for Rogers. I would be REALLY interested in owning that

if they do complete that, and there’s probably no better time. You want to strike where the iron is hot? No better time than after maybe a World Series victory, and before the Leafs do their latest, whatever choke job they’re going to do. So, I’d be looking for this in the next few months, to be honest with you, and I’d be very interested in it.

Nick: As sports fans, it’s time to keep our eyes on the Jays in the World Series, and as business and investors, maybe time to keep an eye on what Rodgers is looking to do with its sports portfolio looking into the future. Jim, thanks for joining us for this edition of “The Five-Minute Major.” For our viewers, want more stock ideas from us? Click on the icon in the upper right of our corner. Thanks for joining us, and we’ll see you next time.

Jim: Thank you.

The post Blue Jays World Series: I’m Not Buying This Go-Nowhere Stock (but I Would LOVE to Buy This Instead) appeared first on The Motley Fool Canada.

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Fool contributor Jim Gillies has no position in any of the stocks mentioned. The Motley Fool recommends Rogers Communications. The Motley Fool has a disclosure policy.

Brookfield Infrastructure Partners (TSX: BIP.UN) currently yields 4.9%, but that’s not the only reason Motley Fool Canada’s Iain Butler thinks it could be a smart stock to buy now. Watch the video to learn more. Prefer to read? There’s a transcript below.

Nick Sciple: I’m Motley Fool Canada Senior Analyst Nick Sciple, and this is “The Five-Minute Major,” here to make you a smarter investor in about five minutes. Interested in more stock ideas from us, or even formal recommendations? Click the icon in the upper right corner for more.

Today on “The Five-Minute Major,” we’ll be discussing Brookfield Infrastructure and why it’s one of the top stocks on our radar this month in October 2025. My guest today to help me do that is Motley Fool Canada Chief Investment Officer Iain Butler. Iain, thanks for joining me.

Iain Butler: Great to be here, as always, Nick.

Nick: For the uninitiated, Iain, what is Brookfield Infrastructure? What does the company do?

What does BIP do?

Iain: Brookfield Infrastructure is but one — I like to use the term — “tentacle” in the Brookfield empire. At its core, Brookfield Infrastructure is one of the largest owners and operators of critical global infrastructure networks that exists. It owns essential backbone assets to the global economy, and I’m talking about long-life, high-quality assets that provide essential services, like utilities, transport, toll roads, data infrastructure. We’re talking pipelines, transport natural gas, and the data centres that are in the news every day these days. So, Brookfield Infrastructure is a very critical component of the global economy. It’s a business that’s diversified across four segments. It owns utilities. Regulated businesses are included in this segment, like electricity transmission, natural gas distribution, all of which generate very stable and predictable cash flows.

There’s also the components of transportation, midstream energy — which is pipelines — and again, data infrastructure. We’re talking rail lines, ports, natural gas pipelines, and again, the growing portfolio of data infrastructure, which includes cell towers as well, which is always an interesting asset.

All of this is bundled up into a package, but overarching this package of assets — a highly unique collection of assets, I’ll add — is the Brookfield strategy, and Brookfield’s strategy throughout the empire is to acquire assets on a value basis, and actively manage them. Brookfield is actually an operator of these assets, which tends to set them apart in a world where there’s financial owners of these things, but not necessarily operators. Brookfield combines them both, and they tend to buy these assets on the relative cheap. They do have some turnover in their portfolio, so they’ll pick something up, they’ll fix it up, operate it for a spell, and then sell it for a premium price. So, you get the steady income component that the assets provide, and you get a sort of a more active management strategy later on top of that.

Which is attractive.

Nick: Yeah, you think about these infrastructure assets, really important at all times to providing the backbone to our economy and what we need to maintain growth. When we talk about right now, here as we sit in October 2025, why should folks be excited about this business and the stock behind it?

Is Brookfield Infrastructure a good stock to buy?

Iain: One of the coolest things about Brookfield Infrastructure is that it’s publicly available to investors like you, me, and everyone watching this video. Historically, these are the kinds of assets that are owned by the likes of governments, sovereign wealth funds and other institutional investors, like pension funds or life insurance companies, companies with long life liabilities. You and I historically have not had access to own a toll road or a port or a private rail line, but Brookfield and others have really changed this game and cracked this niche open for our portfolios, and our portfolios are better off for it. But speaking to Brookfield Infrastructure specifically, the business is exceptionally well-positioned to benefit from three of the biggest global trends today. These are digitalization, decarbonization, and deglobalization. Massive capital investment is needed for data centres, renewable energy transmission, and the onshoring of critical supply chains, and Brookfield is a direct beneficiary of this spending.

Another point here is that in the current economic environment, Brookfield Infrastructure offers inflation-protected cash flows. It’s locked in with long-life contracts, and these contracts tend to move with inflation, so you don’t get an erosion of your value the longer you hold it.

Finally, it pays an attractive dividend, a dividend that offers a 4.9% yield, and management has stated a goal of delivering 5% to 9% annual growth, and this is something that they have stuck to over as long as I’ve followed this company. So, this is a reliable dividend grower to go along with the current attractive yield. Again, we’ll go back to that overarching value strategy that Brookfield offers, where you’re getting some portfolio turnover that’s going to add value along the way.

Nick: Yes, you got critical infrastructure, well-managed by a great management team, in a market environment where demand for those sorts of things is going up.

Also in a macroeconomic environment where inflation-protected cash flow is probably more attractive today than at least five and 10 years in the past. Iain, thanks so much for joining us for this edition of “The Five-Minute Major.” Hope to see everybody next time.

Iain Butler: Fool on.

The post BIP Is a Top Dividend Stock to Buy Today appeared first on The Motley Fool Canada.

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Fool contributor Iain Butler has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.

Natural gas production is getting a big boost in Canada thanks to the fast-tracking of Phase 2 of the LNG Canada project. Motley Fool Canada Chief Investment Officer Iain Butler shares two investing strategies to benefit from the news, along with a handful of dividend stocks.

Prefer to read? There’s a transcript below.

Transcript

Nick Sciple: I’m Motley Fool Canada Senior Analyst Nick Sciple, and this is the 5-Minute Major, here to make you a smarter investor in about 5 minutes. Last week, Canada’s Prime Minister Mark Carney announced a list of projects deemed in the national interest that the country intends to fast-track to approval within the next two years. One of those projects is Phase 2 of the LNG Canada project in British Columbia, and that Phase 2 would plan to double Canada’s liquefied natural gas export capacity. Today, we’ll discuss what that expansion could mean for Canada’s natural gas market and share a few companies that could benefit. My guest today is Motley Fool Canada Chief Investment Officer Iain Butler. Iain, thanks for joining me. 

Iain Butler: Great to be here, Nick. Lots of moving and shaking in the Canadian economy, thanks to big government injections here. 

Nick: Yeah, we’re just a few months on from wrapping up Phase 1 of this LNG Canada project, a $40 billion project that sent out its first liquefied natural gas export shipment back in June. Now the country already looking to double that capacity as soon as possible. At least the government can get in the way as little as possible. What has LNG Canada meant for the Canadian natural gas market so far, and how could those trends continue if we see a further expansion of the facility? 

Iain: As you say, it’s early days, and given the time it took to build Phase 1, we’re talking years here. It’s not as if the development was not unexpected by Canadian natural gas producers. Therefore, I’d say the impact on the price of the commodity natural gas has been negligible, as producers have been ramping up supply to meet these new sources of demand. 

The real win, though, is market access. For forever, Canadian gas producers could really only sell to the U.S. market. That was our only outlet. And now we have a direct route to sell to buyers in Asia, who often pay a premium. 

It was once described to me by a company from Malaysia that a lot of countries in Asia don’t have the resources we have, so when they flip the light switch, that energy has to come from somewhere else, so Canada is certainly going to be a key provider in the decades ahead. And so, we’ve got now a diversified customer base, we’ve created thousands of jobs, and we’ve got economic partnerships and friendly relations with the Indigenous, all go as part of these projects.

I think a lot of the same will come with Phase 2. It’s hard to predict on commodity prices, but structurally, the industry will just get bigger, and Canada is going to take an increasing part of the natural gas scene on the global stage. 

Nick: Yeah, so a bigger industry with more potential export markets, more options for growth in the future. The big question is, who cashes in on that bigger market? What are some Canadian companies you think could be set to benefit? 

Iain: When I think of this situation, there’s two angles to it. So on one hand, we have the aforementioned natural gas production companies. These are the companies that are extracting gas from the ground, drilling wells, and so on. So, with these expanded markets, they have the opportunity to produce more from the vast reserves that do exist. There’s significant natural gas reserves out west in Canada in the Monteney and Duvernay regions in BC and Alberta.

These reserves will be sent abroad. So, natural gas producers, again, to have in mind, all of which pay dividends. Company, Arc Resources, which is a major Motany producer, it’s already a key supplier for the Phase 1 facility.

Tourmaline Oil (TSX: TOU) is actually Canada’s largest natural gas producer. Vast reserves in the region as well. Peyto Exploration (TSX: PEY) is best known as a low-cost producer in the Canadian West, and its dividend yield is currently north of 7%, so attractive on that front. And then Canadian Natural Resources (TSX: CNR). A lot of the time, Canadian Natural Resources is lumped in with oil producers, and indeed, it’s got a significant oil sands operation. 

But it’s also a major, major natural gas producer as well. So, those are for the producers.

On the other hand, the other approach would be companies that own the infrastructure that carries the gas to the coast. These are essentially pipeline companies because that gas has to get there somewhere. This is a very different business model, where the producers are reliant on the price of the commodity for their financial statements. 

The infrastructure companies work more on a contract, sort of fee-for- fee-for-service, basis. So, a little more secure stream of income here.

The 2,000-pound gorilla in the industry is TC Energy (TSX:TRP), formerly TransCanada Pipeline. And that’s the company that built and operates the Coastal GasLink pipeline, and this is the primary artery that gets the gas to the coast. Phase 2 expansion would potentially require more Coastal GasLink pipeline, so an expansion project, and that could add to TC Energy’s coffers.
 

If we think of that as the main route, the Coastal GasLink, there’s a bunch of smaller routes that feed into that Coastal GasLink, and companies that own infrastructure that feed into it include Pembina Pipeline (TSX: PPL), which currently offers a dividend yield of 5.2%; Keyera (TSX: KEY), which offers a 4.6% dividend yield. 

And another 2,000 pound gorilla, although not to the same extent, at least with regards to a pipeline to the coast, is Enbridge (TSX: ENB). And Enbridge currently yields 5.6%. 

Enbridge also has a regional network out west that plays a big role in here. So, producers: relying on the commodity, but demand is shaping up well for them. They have vast reserves, so they are going to be producing gas for a long time. And infrastructure: if you want a little less volatile path to exposure on this front. 

Nick: I think it’s pretty clear the Canadian natural gas market is likely to expand meaningfully as more export capacity comes online. It puts those producers in a good position as more demand for their product comes online, and additional opportunities for those pipeline businesses to drive more volumes through their network, which is, you know, opportunities for more revenue. Those are some companies to keep on your radar as this project in the national interest of Canada moves forward. Thanks for joining us for this edition of the 5-Minute Major. Hope to see you next time.

The post Canadian Dividend Stocks Set to Cash In on Natural Gas Surge appeared first on The Motley Fool Canada.

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Fool contributor Iain Butler has positions in Keyera. The Motley Fool recommends Canadian National Railway, Enbridge, Keyera, Pembina Pipeline, and Tourmaline Oil. The Motley Fool has a disclosure policy.

Despite popular opinion, Canada hasn’t been left out of the AI revolution — far from it. Hear how Canadian stocks like Coveo (TSX:CVO), Kinaxis (TSX:KXS), and Shopify (TSX: SHOP) sit squarely in the middle of the boom.

Prefer to read? There’s a transcript below.

Transcript

Nick Sciple: I’m Motley Fool Canada senior analyst Nick Sciple, and this is the “Five-Minute Major,” here to make you a smarter investor in about five minutes.

Artificial intelligence isn’t just a Silicon Valley story anymore. It’s reshaping industries all over the world — and in Canada, there’s a growing group of companies putting AI to work. From enterprise software to logistics to e-commerce, Canadian AI stocks are carving out their place on the global stage. In today’s episode of “The Five-Minute Major,” we’ll look at what’s driving this trend and where investors should be paying attention.

My guest today is Motley Fool Canada Chief Investment Officer Iain Butler. Iain, thanks for joining me.

Iain Butler: Great to be here on this fine September day, Nick.

Nick: So AI is dominating headlines, but many Canadian investors may not realize how much of it is happening right at home. How is Canada actually participating in the global AI boom today?

Iain: I’m actually guilty of saying that very thing, that we’ve sort of felt left out of this boom within the Canadian market, but it’s just not true. We Canadians tend to be understated, and as you say, Nick, many of us don’t realize that Canada has actually been at the forefront of AI for decades, really.

So some of the core breakthroughs in deep learning came out of Canadian universities, and that foundation has really helped create world-class AI research hubs right here at home.

Today, that’s left us with over a thousand AI startups that are based in Canada. That’s according to the Vector Institute.

And the ground zero for this is actually Montreal. It’s where a real uprising has occurred, and Montreal serves as a home to the largest concentration of deep-learning researchers in the world. So, while many of us, we Canadians, might be in the dark on this proliferation, global tech giants sure aren’t. Google, Meta (formerly Facebook), Microsoft, and others all run major AI labs here in Canada, to the point that Toronto was one of the very first places Google’s DeepMind expanded outside the UK.

Surprisingly, even our politicians have gotten on the right side of this trend as well. So Canada actually launched the world’s first national AI strategy back in 2017, with hundreds of millions of dollars in federal funding to grow local talent and keep that research leadership.

And there’s a commercial payoff to this. We’ve got some actual companies, living and breathing companies that we can invest in, along these lines. Companies like Coveo, Kinaxis, and Shopify are all weaving AI directly into their products.

I’ve said a lot here. Let’s quick summarize: We are not a bystander. Canada is not just a bystander in this movement. We’re an early innovator, global talent hub, and increasingly a place where investors can find homegrown AI opportunities.

Nick: So, Iain, you mentioned a few publicly traded companies in that spiel. What are some AI opportunities available to Canadians on the public markets that should be on investors’ radar?

Iain: It was a spiel, you’re right! So those three companies, Coveo, Kinaxis, and Shopify are current recommendations in Stock Advisor Canada, which is our flagship members-only stock-picking service here at Motley Fool Canada. So starting with Coveo, a Quebec-based company, it’s in the business of using AI to make digital experiences smarter. Think about search bars on company websites, product recommendations, and even customer support. So they’re really in the business of monetizing AI for their customers, and that client list includes some powerhouses like Salesforce, SAP, and Adobe, which makes it a pretty compelling situation just on its own.

That’s Coveo.

Kinaxis is Ottawa-based. The company offers software that helps its customers with supply-chain management. I think if the pandemic taught us anything, it’s that supply-chain management is pretty darn important to get right. AI is baked into Kinaxis’s software offering. It serves as the backbone of the tools that it provides to its customers.

And these tools largely are capable of simulating just thousands of different what-if scenarios. What if part A doesn’t arrive? What if part B doesn’t arrive? How do we rectify that situation? So, Kinaxis has been a long-time recommendation of our service, and it’s performed very, very well, and it’s been fascinating to see it evolve over the years.

And then finally, speaking of long-term recommendations, we first put Shopify in front of our Canadian members way back, just after its IPO in 2016.

It’s done alright. Of the three, I suspect — and I kind of hope — that Shopify needs the least in terms of an introduction, but even though it’s the second-biggest company in Canada by market capitalization, I still don’t think a lot of Canadians know of it. So, Shopify is a platform where e-commerce occurs. Companies can put their business onto the Internet, with the help of Shopify, and use it to sell their wares.

We’re gonna run a little bit over time, but who cares?

Shopify has built this platform out with a variety of tools over the years. These are increasingly AI-oriented. Businesses on the platform, once they get on the platform, start using these tools, they can’t leave, otherwise their business goes away. So Shopify’s got one of the stickier business models that you’re ever going to find, and it’s been a glorious company to watch, and a glorious investment for our members and a lot of Canadians.

Nick: Yeah, Iain, so AI is one of the defining trends of this decade, the 2020s, and there are Canadian companies right in the mix, whether it’s lesser-known names like Coveo or Kinaxis, or the big dog in the TSX, Shopify, there are homegrown Canadian stocks building, enabling, and benefiting from AI that are available to invest on the public markets and that we talk about for our members at Motley Fool Canada. That’s all the time we have for today’s edition of “The Five-Minute Major. Thank you for joining us, and we hope to see you again next time.

The post 3 Secret Canadian AI Stocks to Buy Now While Everyone Else Chases Nvidia appeared first on The Motley Fool Canada.

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Fool contributor Iain Butler has positions in Alphabet, Coveo Solutions, Meta Platforms, and Shopify. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Adobe, Alphabet, Coveo Solutions, Kinaxis, Meta Platforms, Microsoft, and Salesforce. The Motley Fool has a disclosure policy.

Premium content from Motley Fool Stock Advisor Canada

Fellow Fools,

The headlines have been tough to tune out this year, from Donald Trump’s tariffs to warfare in Ukraine and Iran, stubborn inflation and a Canadian federal election.

Against that backdrop, though, the stock market has marched higher. In fact, Canada’s benchmark S&P/TSX Composite Index finished at record highs Monday.

When markets hit new highs, investors often ask: “Isn’t this a bad time to invest?”

But we Fools at Stock Advisor Canada see things differently. Long-term investing is less about timing the next headline and more about positioning yourself for the world that emerges a decade from now.

Here are a few things to consider doing when headlines rage, volatility strikes, and, yes, when we’re investing at all-time highs.

1. Find Opportunity in Uncertainty

Tariffs will roil trade, wars will disrupt supply chains, and inflation may stubbornly persist. These are textbook conditions that reward patience and perspective. Canada’s resource and energy sectors, with their global reach and pricing power, are well‑positioned. And innovation remains alive here — from fintech to nuclear power, Canada’s best companies are building durable value.

2. Focus on What You Can Control

You can’t control geopolitics, but you can control how you build your portfolio. Businesses with strong balance sheets, good governance, and pricing power tend to outperform over time. We like the companies on this month’s Best Buys Now list for their long‑term trajectory.

3. Embrace Volatility as the Price of Admission

If the recent all‑time high makes you nervous, you’re not alone. Markets climb a “wall of worry.” As long as people participate in markets, markets will be volatile. But in the real world, people are also constantly working to create better technologies, create new products, and find the next big thing. That drive to innovate is what continues to power the market higher, even if it doesn’t make the headlines.

4. Anchor Your Horizon in Decades

If you’re investing for retirement, today’s political headlines will likely be just a chapter in your story. The best stocks are the ones you never feel compelled to sell because they keep evolving and innovating.

5. Keep Learning and Stay Curious

In a noisy world, the investor who studies, asks questions, and stays engaged gains an edge. Read quarterly reports, pursue diverse sectors, and ask what problems companies are solving. It’ll make you smarter, happier, and richer.

The next time you’re thinking, “Is now the right time to invest?” or “Shouldn’t I sell right now?”, consider another question instead: “Am I building a portfolio that reflects my best ideas, and my best, realistic vision for the future?” If yes, you have reason to be bullish—even when concern abounds. If not, let this be your invitation to reassess, reposition, and recommit.

Don’t let short‑term fear knock you off the path to long‑term prosperity. Markets won’t make all-time highs every day, and every headline won’t be positive. But over decades, economies grow, innovation wins, and disciplined investors are rewarded. Here are five stocks we think will shine.

Foolishly yours,
Nick Sciple
Senior analyst, Motley Fool Canada

This small-cap owner of seismic data has been the Rodney Dangerfield of stocks. For years, Pulse Seismic (TSX:PSD) went about executing well — without getting any respect. The downturn in commodity prices certainly obscured the company’s improved earning potential for a while. But it appears that investors are starting to take notice of the results Pulse is generating for shareholders. 

Over the past year, the stock is up 37%, but total returns are much higher than that. So far in 2025, Pulse has paid out total dividends of $0.2325. That includes two quarterly dividends and a $0.20 special dividend. With no debt on the balance sheet and exceptionally low operating costs, these special dividends are becoming very … well, almost regular. Here’s a list of special dividends since 2021 (note: that’s the year Pulse paid off all its debt from a timely acquisition that roughly doubled the size of its seismic library):

Special Dividends

• $0.04 paid November 29, 2021
• $0.15 paid August 22, 2023
• $0.20 paid January 8, 2024
• $0.05 pad August 21, 2024
• $0.20 paid March 13, 2025

On April 22, 2025, Pulse boosted its regular quarterly dividend by 17% to $0.0175 per share. This higher quarterly dividend still only costs Pulse $889,000.

Pulse ended March with $14.3 million in cash on its balance sheet and no debt. On June 12, Pulse announced another sale of its seismic data for $13.5 million. That will leave Pulse’s balance sheet stuffed with cash again. Based on its current share count of 50,755,057 shares, a $0.20 special dividend will only cost Pulse just over $10 million. Pulse could do two of these and still be in fine shape.

Pulse’s management team has done everything right over the past few years, and shareholders have been rewarded. Pulse is in a position where business results will continue to drive stock results. The recent performance and announcement of that $13.5 million sale helped land Pulse on this month’s Best Buy list.

We fully expect more special dividends in the future, which will likely put yields well above 10%, based on the current prices. Keep in mind that Pulse’s future sales remain impossible to predict. We like that management doesn’t even attempt to do so. As Warren Buffett once quipped, “Charlie (Munger) and I would much rather earn a lumpy 15% over time than a smooth 12%.” Lately, Pulse has been doing much better than that.

The post Just Released: 5 Top Stocks to Buy in July [PREMIUM PICKS] appeared first on The Motley Fool Canada.

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Fool contributor Buck Hartzell has no position in any of the stocks mentioned. The Motley Fool recommends Pulse Seismic. The Motley Fool has a disclosure policy.

Canadian investors, take note: A dividend’s potential for growth is more important than its current yield. Learn why and get two ideas about TSX stocks with growing dividends to buy now.

Prefer to read? There’s a transcript below.

Transcript

Nick Sciple: I’m Motley Fool Canada senior analyst Nick Sciple, and this is the “Five-Minute Major,” here to make you a smarter investor in about five minutes.

Today we’re discussing dividend growth investing. We’ll discuss why — for long term investors, at least — dividend growth is more important than the starting dividend yield, and we’ll close with two Canadian dividend growth stocks to consider if you’re looking for passive income. My guest today is Motley Fool Canada Chief Investment Officer Iain Butler. Iain, thanks for joining me once again.

Iain Butler: Great to be back, Nick, [after a] couple of weeks away. We’re good to roll.

Why is dividend growth important?

Nick: So talking about dividend growth stocks today, when you’re looking at dividend stocks, many investors, especially beginners, look at that starting yield and stop the analysis right there. Why is it important for folks to focus on dividend growth?

Iain: I think you used the key word in the intro: “long-term” investing. Indeed, over long periods of time, studies show (I’m talking decades here) that companies that consistently grow their dividends generate higher total returns with less volatility than companies that maintain static dividends, cut their dividends, or pay no dividends at all. And when you think about it a little bit, logic flows. That dividend growth is actually a sign of a healthy, growing company with rising earnings, businesses with pricing power, strong balance sheets, discipline, management, and traits you just don’t find in companies that are either struggling to pay a dividend or cutting their dividend.

Are high-yield stocks good buys?

It’s important to realize, too, that people see that initial yield and they get excited when you see 6, 7, 8% on a stock.

But in fact, a stock yielding 3% but growing its dividend 10% annually, for example, you’re going to double your income over in just over seven years with that situation rather than just maintaining that 6% or 7% yield with a company that doesn’t increase its dividend.

It’s very important to realize that the market is sending a signal when it puts a high yield. When you’re looking at a high-yielding stock, it’s a signal to, in fact, stay away. It shouldn’t be a company that you’re attracted to. It should actually be one that you stay away from in most cases.

Dividend growth stocks Canadian investors can buy now

Nick: With that in mind, what’s one Canadian dividend growth stock, or a pair, that looks attractive to you right now? And why?

Iain: We’re going to go [with] two. These two companies offer somewhat of a best of both worlds situations. They currently offer a pretty attractive current yield, and they’ve got a long history of dividend growth. These two companies live within the mighty Brookfield empire, and we’re going to start with Brookfield Infrastructure (TSX:BIP.UN).

Brookfield Infrastructure is a leading global infrastructure company that owns and operates a high-quality portfolio of regulated assets and long life contracted businesses. So it’s got a portfolio that’s filled with utilities, transport like toll roads, midstream energy assets, and data centres across North and South America, Europe and Asia Pacific. So across the world a vast portfolio, and the company currently offers a dividend yield of 5.2%.

More importantly, though, it’s grown its dividend at a 6.3% average annual rate over the past decade or so. This has resulted in a 218% total return over that decade or so, and that handily beats the S&P TSX Composite total return of about 155%.

The other company that we’ll mention here is Brookfield Renewable (TSX:BEP.UN). So a cousin of sorts to Brookfield Infrastructure, but very different assets within Brookfield Renewable, as the name suggests. It’s one of the world’s largest public owners and operators of renewable power and decarbonization solutions

We’re talking hydroelectric, wind, solar and storage facilities that span across five continents. Similarly, the current yield for Brookfield Renewable is 5.9%, and the company’s dividend has grown at an annual rate of 3% on average over the past decade. So about half of Brookfield Infrastructure, but its total return is quite similar, at 220%. It’s another one that’s handily beaten the S&P TSX Composite, and just an interesting smattering of assets across both of them to put in one’s portfolio. All very important critical assets, and it’s just an easy way to blanket a vast array of renewable and infrastructure assets with two simple holdings.

Nick: One other thing to mention as well: With both of these companies, often their contracts for these types of important infrastructure are indexed to inflation. And so the payments they’re getting from their customers are going to increase in line with this high inflation environment we’ve seen, which helps support that growing dividend over time. Two great companies, if you’re looking to buy today, but also to hold for years and years on into the future. Iain, thanks so much for joining me for this edition of the Five-Minute Major. Hope to see you next time.

Iain: Awesome. Nick. Thanks.

The post 2 Canadian Dividend Growth Stocks to Buy for Passive Income appeared first on The Motley Fool Canada.

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Fool contributor Iain Butler has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

High dividend yield? It might be a bad sign. In this short video, learn a rule of thumb to tell the difference between value plays and value traps, plus hear about a top TSX dividend stock that looks undervalued right now.

Prefer to read? There’s a transcript below.

Transcript

Nick Sciple: I’m Motley Fool Canada senior analyst Nick Sciple, and this is the “Five-Minute Major,” here to make you a smarter investor in about five minutes. Today we’ll share a few things to look at when evaluating dividend stocks and close with one Canadian dividend stock that looks undervalued right now. My guest today is Motley Fool Canada Chief Investment Officer Iain Butler. Iain, thanks for joining me.

Iain Butler: Great to be here, Nick, as always.

Value play vs value trap

Nick: So we’re talking dividend stocks today, Iain, specifically undervalued dividend stocks. When you’re looking at a dividend stock for the first time, how do you separate a value play from a company that’s a value trap?

Iain: It’s a great question. And I think a lot of people actually do get hung up on this. So we’ll try and shed some light here. One tell that I’d highlight is when you see a sky-high dividend yield. That’s an indication, I think a pretty good indication, that you’re looking at a value trap. I can recall a study done by Bernstein Research 10 or 15 years ago — I’m pretty sure it holds up — that indicated a dividend yield north of 8% is a warning signal, and I think that’s pretty darn solid rule of thumb to follow when it comes to identifying value traps in the dividend sphere. Too good to be true is definitely a thing when it comes to investing. And frankly, the market is pretty darn good at deciphering cans and cannots when it comes to affording dividend payments. So it’s not like the market’s giving you anything for free here.

Financial red flags with dividend stocks

To dig a bit deeper, though, if you use that as a flag, then turn to the company’s financials, namely, the company’s cash flow statement and its balance sheet, you can glean some further insight there on the cash flow statement. What you want to do is have a look at free cash flow, which is cash from operations minus a company’s capital expenditures.

You want to compare that number to the company’s ongoing dividend obligation. So say a company’s earning $100 in free cash flow and paying out $70 in dividends. That’s a reasonable indication that the company is capable of handling that dividend. You want to string a few years together just to make sure. That’s a good indication if the company is paying out more than $100. Then again, you’re looking at value trap territory. On the balance sheet, you just want to see about debt. Debt comes before all other obligations for companies, so should they stub their toe at some point, they are obliged to fulfill their lenders through interest payments and principal repayments before people receive their dividends. So we’ve seen this as a cause of many dividend cuts over the years. I can think of any number of companies that have run into balance sheet problems and had to cut their dividend to appease their lenders. So those are some things to look for, a red flag: high dividend yield and then just a couple quick metrics on the financial statements.

1 smart TSX dividend stock to buy today

Nick: So with that in mind, what’s one dividend stock that you think looks undervalued right now?

Iain: The company that comes to mind for me is one that we’ve we’ve talked a lot about over the years amongst the Canadian investing team. It was one of our original recommendations in Stock Advisor Canada, and the company is called MTY Food Group (TSX: MTY).

People may not know MTY Food Group, but I suspect that they know some of the 80 different brands across Canada and the United States that MTY Food Group owns. It’s quick-service, fast-casual, and casual dining restaurants and names such as Baton Rouge, Thai Express, Mr. Sub, Papa Murphy’s, Cold Stone Creamery, Country Style and Cultures are all part of what make up MTY Food Group. MTY Food Group collects royalties from these restaurants. And it’s a wonderful model when it comes to generating free cash flow. Historically, it was not a dividend payer. The company introduced a dividend a few years ago. The stock currently yields 3.2%, which is at the very high end of its all-time range. It generated about $180 million in free cash flow. Remember, this is an important metric to look for. $180 million in free cash flow over the past 12 months. Annual dividend obligation of $27 million, so very, very capable of covering its dividend obligation. It’s been acquisitive over the years. They haven’t been acquisitive in recent years, focused on paying down debt, but they’ve also been buying back a lot of stock, and this dividend has grown steadily over the past four or five years.

This is not a yield that jumps off the page at 3.2%. But it is a dividend that’s grown, and we expect it will continue to grow. And this is a company that I think you can buy today at a really reasonable price and be quite happy in five years’ time with the total return that it provides.

Nick: That’s right. I mean, it’s often forgotten that your initial yield on a company — especially for a company that can grow its free cash flow — that distribution isn’t what your yield is going to look like in year two and year three and year four. For somebody who’s investing over the long term like we advocate at Motley Fool Canada, that is an important part of the calculus of the value of the company today versus where you think the business can be over the long term.

Iain, thanks for joining us for this edition of the Five-Minute Major. Look forward to seeing you next time.

Iain: Good stuff. Thanks, Nick.

The post 1 Undervalued Canadian Dividend Stock to Buy Now and Hold for Years appeared first on The Motley Fool Canada.

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Fool contributor Iain Butler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends MTY Food Group. The Motley Fool has a disclosure policy.

In this short video, learn how to identify reliable dividend stocks, and get two TSX dividend stock ideas that we think are good buys today.

Prefer to read? There’s a transcript below.

Transcript

Nick Sciple: I’m Motley Fool Canada senior analyst Nick Sciple, and this is the Five-Minute Major, here to make you a smarter investor in about five minutes. Today we’re discussing our favorite Canadian dividend stocks. My guest today is Motley Fool Canada Chief Investment Officer, Iain Butler. Iain, thanks for joining me.

Iain Butler: Great to be here, Nick. It’s been a couple of weeks since one of these, so it’s good to be back.

How to identify a good dividend stock

Nick: Excited to be here as well, Iain. Before we get into our dividend stock picks, what are the things investors should be looking for when they go looking for dividend stocks?

Iain: Well, this is going to sound a little ridiculous, and I wrote down some notes, and it sounds totally ridiculous. But what I look for is that the company that’s paying the dividend has the financial wherewithal to actually pay the dividend. Imagine that! So I mean, it sounds obvious. But where I found a lot of investors getting tripped up is that they focus on the wrong metrics to evaluate this capability.

What is a payout ratio?

So the most popular ratio is known as the payout ratio. You’ll see this figure on any number of websites as you travel the Internet.

Generally speaking, the lower the ratio, the more able a company is to afford its dividends. So said differently, a 50% payout ratio is more attractive than a 100% payout ratio. 100% means they’re paying out all of their — well, we’re going to get to how they’re paying out.

Why payout ratios can be misleading

So my problem with the payout ratio is that the calculation uses the dividend payout as the numerator, which is fine.

But the denominator is net income. And the problem with net income is that it has very little to do with a company’s ability to pay its dividend. All kinds of accounting trickery comes to mind. But that’s not necessarily the right word. Accounting “adjustments” come into net income, and the fact is, dividends are actually paid out of a company’s free cash flow. So the right way to calculate the payout ratio is to have dividend in the numerator and free cash flow in the denominator, and we could spend the full five minutes just on this metric. But I wanted to make that clear. And now we can jump into, Nick, your favourite Canadian dividend stock right now.

Canadian Natural Resources

Nick: My favourite Canadian dividend stock right now is Canadian Natural Resources (TSX:CNQ). For folks who aren’t familiar, Canadian Natural Resources is the largest oil producer in Canada, with among the longest-lived and lowest breakeven energy resources in the world, which provide the company with consistent and reliable cash flows — to your point on payout ratio. Canadian Natural Resources pays out about 50% of its free cash flow via dividends, which allows the company to support that dividend payout while also investing in the business for growth. Its current yield is 5.4%. That’s substantially higher than its Canadian oil and gas peers, and also more global oil and gas peers. Think about your Exxons (NYSE:XOM) and your Chevrons (NYSE:CVX). Moreover, this is a company that has regularly increased its dividend every year for the past 25 years, and if you look back over the past five years, the dividend has increased 176% during that time period. So with Canadian Natural Resources, you have a leading company in its industry with a very well covered dividend, offering an above average yield today with a consistent track record of increasing those dividends over time. That’s exactly what I look for in a dividend stock. Iain, what about you? What is one Canadian dividend stock on your radar right now? And why?

CN Rail

Iain: It’s fantastic, and I’ll certainly echo CNQ’s qualities that you mentioned. Well done. So, mine is similarly not a fancy company or not a real stretch to believe — and narrowing down to one is tough — but CN Rail (TSX:CNR) is a recent re-recommendation in Stock Advisor Canada, and that’s certainly a company that fits the bill when it comes to its ability to afford its dividend. CN’s current yield is about 2.5%.

And while you can certainly do better than that on a number of other fronts (there’s plenty of companies out there that offer a bigger yield than 2.5%.) But CN Rail has been one of the more reliable dividend growers in the Canadian market, similar to CNQ, over the past 25 years. So I think just taking a step back for both of these companies, Canadian Natural Resources and CN Rail, when one is considering a dividend strategy, whether it be for an entire portfolio or just a corner of one’s portfolio, it’s been my experience that you’re better off sticking with these tried and true dividend performers. You can get tempted by the 11%, 12%, 13% dividend yields that are out there.

But the stock market’s pretty darn good at sniffing out dividend duds, and when the higher yields tend to indicate a company is a dividend dud, you can do far better when you find these reliable growers, even though their dividend yields may not look as attractive on paper over over time. That dividend growth really provides a relatively low-risk, significant return.

Nick: That’s right. You’ve got to combine that dividend yield with how sustainable that dividend can be over time. Often those current yields in the double digit ranges indicate that a future yield might be in the 0% range, or certainly substantially lower than what it’s showing you on the paper today. Well, we’ve given you a couple great Canadian dividend stocks to have on your radar as you consider additions to your portfolio. That’s all the time we have for this edition of the Five-Minute Major. Thanks so much for joining us, and we’ll see you next time.

The post 2 Top Canadian Dividend Stocks to Buy Right Now appeared first on The Motley Fool Canada.

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Fool contributor Iain Butler has positions in Canadian Natural Resources. The Motley Fool recommends Canadian National Railway, Canadian Natural Resources, and Chevron. The Motley Fool has a disclosure policy.