When I look for dividend stocks, the current yield is only part of the story. A 6% yield can look attractive today, but if the underlying business barely grows and the dividend stays flat, I’m not sure that’s the type of company I want to own for the next 10 or 20 years. I’m much more interested in businesses that can increase earnings, generate more cash and gradually send more of that cash back to shareholders.
That’s what this list is about. These aren’t the five highest-yielding stocks on the TSX. In fact, a couple of them have fairly modest yields. What they have instead is a combination of good businesses, dividend growth and reasons to believe they could be substantially larger companies years from now.
That matters even more after a strong run for Canadian equities. The TSX entered the end of August near record territory and had recorded five consecutive monthly gains. I’m still bullish on owning good Canadian companies long term, but at these levels I’m paying more attention to what I’m buying and what I’m paying for it. Here are my top five Canadian dividend growth stocks heading into the final stretch of 2026.
Share prices and market capitalizations are approximate as of August 31, 2026.
#5 EQB Inc. (TSX: EQB.TO)
Share Price: ~$128
Market Capitalization: ~$5.4 billion
Dividend Yield: ~2.0%
Industry: Banking / Financial Services
Why It Made My List
EQB is probably the least obvious company on this list, which is partly why I wanted to include it. The company behind EQ Bank completed its acquisition of PC Financial on July 1. That suddenly gives EQB access to roughly four million directly served customers and makes it the exclusive financial-services partner of PC Optimum, which has more than 18 million active members. That changes the story. EQB isn’t simply a smaller alternative Canadian bank anymore. It’s building a much broader consumer-finance platform.
What I Like
The dividend is still small, but it’s moving in the right direction. EQB increased its quarterly dividend to $0.63 in August, up 15% from a year earlier. Adjusted revenue increased 27% year over year in its latest quarter, although that included one month of PC Financial. What interests me most is the potential diversification. Credit cards, insurance-related fee income, deposits and the PC relationship could reduce EQB’s historical dependence on mortgages and interest spreads.
One Thing I’d Watch
Credit quality. Provisions for credit losses jumped sharply in the latest quarter as Canadian borrowers continued to face pressure. Integrating PC Financial also adds complexity and expenses. This isn’t a risk-free growth story.
Would I Buy Today?
I’d be comfortable starting small, but I wouldn’t treat EQB like one of Canada’s Big Six banks. There’s considerably more execution risk here. For me, that’s also what makes it interesting.
#4 Toromont Industries (TSX: TIH.TO)
Share Price: ~$200
Market Capitalization: ~$16.3 billion
Dividend Yield: ~1.1%
Industry: Industrial Equipment / Product Support
Why It Made My List
Toromont is one of those Canadian companies that rarely seems to get much attention outside dividend-growth circles. It should. Toromont operates equipment businesses serving construction, mining, infrastructure and power-generation customers, along with CIMCO’s industrial refrigeration operations. As Canada continues spending on infrastructure and resource development, those end markets give Toromont several ways to grow.
What I Like
The dividend history is exceptional. Toromont increased its dividend another 7.7% in 2026, marking its 37th consecutive year of dividend increases. More importantly, the business is performing. Second-quarter revenue increased 16%, operating income climbed 41%, and management reported healthy backlog and strong bookings. Toromont also maintained an extremely strong financial position. That’s what I want behind a growing dividend.
One Thing I’d Watch
Valuation. Toromont has become much better known by investors, and good businesses can still become expensive stocks. I like TIH a lot more around $200 than I did above $240 earlier this year, but I still wouldn’t chase it.
Would I Buy Today?
I’d happily own Toromont for the long term. I’d just prefer to build the position gradually instead of assuming any price is a good price.
#3 Metro Inc. (TSX: MRU.TO)
Share Price: ~$88
Market Capitalization: ~$18.5 billion
Dividend Yield: ~1.8%
Industry: Grocery & Pharmacy Retail
Why It Made My List
Metro isn’t exciting. That’s one of the things I like about it. People still buy groceries when the economy slows. They still fill prescriptions. Through Metro, Food Basics, Super C, Jean Coutu and Brunet, the company owns assets Canadians interact with constantly.
What I Like
Metro increased its quarterly dividend by 10.1% in 2026 after completing its 31st consecutive year of dividend growth in 2025. That consistency matters to me more than having the highest yield today. Metro also continues expanding its store network while benefiting from a pharmacy business that gives it another defensive earnings stream.
One Thing I’d Watch
The latest quarter wasn’t clean. A labour conflict at Metro’s Laval produce distribution centre hurt earnings significantly, while food same-store sales declined 1.5%. Pharmacy same-store sales, on the other hand, grew 4.8%. I’d want to see the distribution issues fade and food-store momentum improve.
Would I Buy Today?
At around $88, Metro interests me much more than it did at higher prices. I’d consider building a position here, knowing that near-term results could remain a little messy.
#2 Canadian Natural Resources (TSX: CNQ)
Share Price: ~$69
Market Capitalization: ~$143 billion
Dividend Yield: ~3.6%
Industry: Oil & Natural Gas
Why It Made My List
CNQ is the most cyclical company here, but its dividend record is difficult to ignore. The company has now increased its dividend for 26 consecutive years, with management reporting roughly 20% annualized dividend growth over that period.
What I Like
CNQ owns enormous long-life, low-decline energy assets. That means it doesn’t constantly have to replace production at the same pace as many traditional producers. The latest quarter was extremely strong: record production of roughly 1.68 million barrels of oil equivalent per day, record adjusted funds flow of about $6.9 billion and net debt reduced to $14.5 billion. That debt number is particularly important. Once CNQ reaches its $13-billion target, its framework calls for returning 100% of free cash flow to shareholders through share repurchases after dividends and capital requirements.
One Thing I’d Watch
Oil prices. CNQ is an excellent operator, but management can’t control the price of crude. If energy prices fall sharply, cash flow falls with them.
Would I Buy Today?
I like CNQ as a long-term Canadian energy holding, but after the stock’s strong run I’d probably wait for weakness rather than chase it near recent highs.
#1 Intact Financial (TSX: IFC.TO)
Share Price: ~$268
Market Capitalization: ~$47 billion
Dividend Yield: ~2.1%
Industry: Property & Casualty Insurance
Why It Made My List
Intact is my #1 because I think it offers one of the best combinations of quality, growth and dividend consistency in Canada. Insurance isn’t glamorous, but scale matters enormously. Intact operates across Canada, the United States and the UK & Ireland, giving it diversification that very few Canadian insurers can match.
What I Like
Intact increased its dividend again in 2026, marking the 21st consecutive annual increase since its IPO. The bigger reason it’s #1, though, is the underlying business. Despite elevated catastrophe losses in Q2, Intact still produced a 17% operating return on equity, while book value per share increased 13% year over year. It finished the quarter with roughly $3.8 billion of capital margin and relatively modest financial leverage. To me, that demonstrates resilience.
One Thing I’d Watch
Severe weather. Catastrophe losses were elevated again in the latest quarter. Climate-related claims aren’t going away, so Intact needs to continue pricing risk appropriately. That’s a real long-term challenge for the entire insurance industry.
Would I Buy Today?
IFC is the company on this list I’d be most comfortable owning and largely forgetting about. I wouldn’t blindly buy it at any valuation, but around current levels I’d be interested in gradually building a long-term position.
Final Thoughts
The common theme across these five companies isn’t yield. It’s growth behind the dividend. EQB is trying to become a larger and more diversified Canadian bank. Toromont benefits from infrastructure and industrial spending. Metro owns defensive grocery and pharmacy assets. CNQ generates enormous cash flow from long-life energy reserves. Intact has built one of Canada’s strongest insurance platforms. None of them are perfect.
Over the next year I’ll be watching EQB’s PC Financial integration, Toromont’s valuation, Metro’s operating recovery, commodity prices for CNQ and catastrophe losses at Intact. This list is best suited to investors who aren’t looking for the biggest dividend cheque next quarter, but rather companies that could potentially be paying considerably larger dividends 10 years from now. Because when I’m investing for the long term, I don’t just want income. I want the business producing that income to keep getting better.
