This article was generated with artificial intelligence, using the video transcript from my recent Youtube video, listed below.
If you are a dividend growth investor, this is the board you have been waiting for. Six of the best Canadian dividend growth stocks in the country: Fortis, Metro, Thomson Reuters, CN Rail, Canadian Natural Resources, and Toromont. Between them they carry 26 to 52 straight years of dividend increases, and I tier ranked all six from S to E.
One rule before we start: no token raisers. Companies like Canadian Utilities and ATCO flick in 1 to 2 percent raises to keep their streaks alive. Every company here has grown its dividend for real. The scoring is dividend growth plus total return, because a dividend without share price appreciation is just your own capital coming back.
Here is the board, and the one chart that explains most of it: out of six elite dividend growers, only one dividend is actually speeding up.
| Stock | Ticker | Streak | Latest Raise | Tier |
|---|---|---|---|---|
| Toromont | TIH | 37 years | +7.7% | S |
| Thomson Reuters | TRI | 33 years | +10.1% | A |
| Canadian Natural | CNQ | 26 years | +6.4% | B |
| Fortis | FTS | 52 years | +4.1% | C |
| Metro | MRU | 32 years | +10.1% | D |
| CN Rail | CNR | 30 years | +3% | E |
Disclosure up front: I own Fortis and Toromont. I owned CN Rail, and I sold it to buy CP. More on that below.
Fortis (TSX: FTS): C Tier
Everybody’s favourite regulated utility. Fortis has raised its dividend for 52 consecutive years, the second longest streak in Canada, and about 99 percent of earnings come from regulated utilities, roughly 65 percent of them in the US. Regulators let it earn a set return on the money it invests in poles, wires and pipes, so competition cannot enter and profit follows the asset base almost mechanically. The C$28.8 billion five-year capital plan grows that base about 7 percent a year, which comfortably funds the raises.
So why only a C? Because the growth is fading in plain sight. The raises went 6.1, 5.8, 5.9, 5.6, 4.4, 4.2, 4.1 percent from 2019 to 2025, and Fortis is guiding to the bottom of its own 4 to 6 percent range through 2030. Regulators hold the pen: ITC’s allowed return has already been cut from 12.38 percent to a 9.98 percent base. And with a 3.4 percent yield sitting below the five-year average while treasuries pay close to 5 percent, utilities are a hard sell until rates come down. An outstanding company at the mercy of the rate cycle. I own it, and it still only earns a C on this board.
Metro (TSX: MRU): D Tier
Quebec’s grocery and pharmacy leader: Metro, Super C, Food Basics, and about 560 Jean Coutu and Brunet pharmacies. The streak is 32 years, and the last six raises all landed near 10 percent. So why D? Because the math behind those 10 percent raises is running out of room.
Metro’s stated policy is to pay 30 to 40 percent of the prior year’s earnings. The dividend has grown about 11 percent a year against roughly 8 percent earnings growth, so the payout has climbed steadily, and another 10 percent raise in January would land at about 40 percent, the very top of the range, in a year where earnings are falling. The Laval produce centre strike just reset wages 22 percent higher over five and a half years, and in a business earning under 5 cents on each dollar of sales, that matters.
The bigger issue is competitive. A decade ago Metro had the best margins in Canadian grocery. Today Loblaw beats it on margins and returns, and Loblaw’s stock returned about 18.5 percent a year over the decade against roughly 9.9 percent for Metro. Pharmacy is genuinely strong, same-store sales grew 4.8 percent last quarter while food fell 1.5 percent, and buybacks retire about 3 percent of shares a year. A fine grocer. Second best at everything.
Thomson Reuters (TSX: TRI): A Tier
Third tier list in a row for this one, and it keeps earning its spot. Thomson Reuters sells subscriptions to the research and software lawyers, accountants and corporate tax teams use every day: Westlaw, CoCounsel, Practical Law, Checkpoint, ONESOURCE. 81 percent of revenue is recurring and it keeps 92 percent of it at renewal, usually with a price increase.
Here is the tell on this whole board: Thomson Reuters is the only company on it whose dividend is speeding up. The raises went from 1.4 percent in 2018 to five straight years above 10 percent. Earnings grew about 18 percent a year from 2021 to 2025 against 10 percent dividend growth, so the payout ratio is falling even as the raises accelerate. And the Thomson family, through Woodbridge, owns about 70 percent of the company and collects roughly US$800 million a year from this dividend. Owners like that do not cut.
The market still prices it as an AI loser, and the stock trades about 41 percent below its high. Meanwhile Legal’s organic growth went from 4 percent in 2019 to 10 percent last quarter, and products that include generative AI are now 32 percent of annualized contract value. The company the market expects AI to replace is growing faster than it ever has. The honest caveat: Wolters Kluwer trades near 8.5x EV/EBITDA against roughly 14x here. Cheap against its own decade, not cheap against the group. Still an A.
CN Rail (TSX: CNR): E Tier
Yes, E tier. I know. Premier assets: one of two railroads reaching three coasts, an impenetrable moat, real pricing power. From 2019 to 2025 freight revenue rose 17.5 percent on volumes that actually fell 1.6 percent. Nobody will ever build a competing transcontinental railway.
But a moat is priced in. The edge comes from management’s ability to leverage it, and that is where CN has failed. Its operating margin fell from about 42 percent in 2015 to 37.5 percent while Union Pacific’s rose to 40. It posted the slowest ten-year EPS growth of the five big North American railroads, about 5.5 percent a year. It guided to 10 percent EPS growth for 2024 and delivered minus 2. It guided 10 to 15 percent for 2025, delivered 7, and withdrew its outlook.
And then there is the capital allocation. In 2022 and 2023, at the absolute peak of the freight cycle, CN paid out roughly 175 percent of its free cash flow in dividends and buybacks and borrowed the difference, spending about C$11.9 billion on shares at an average near C$160. CP did the opposite: paused buybacks in the frothy years, then restarted with C$3.9 billion in 2025 once shares were cheap. That contrast is why I sold CN and bought CP, and it is why a 30-year streak that has shrunk from 19 percent raises to 3 percent lands in E.
Canadian Natural Resources (TSX: CNQ): B Tier
The most consistent high-level dividend grower in the country, full stop. The streak reads 26 years, but the streak undersells it: the declared dividend went from about six cents a share in 2005 to C$2.35 in 2025, split-adjusted. That is roughly 40 times the dividend in twenty years, close to 20 percent compounded annually, from an oil company.
It raised through 2008, through the 2014-16 oil bust, and in March 2020 it raised the dividend 13 percent weeks before oil prices went negative, then held it all year while Suncor cut. The structural advantages are real: oil sands mines that barely decline, operating costs around C$22.66 a barrel against about C$34 at Syncrude, reserves that last about 30 years at current production, and a payout ladder where shareholder returns step up from 60 to 75 to 100 percent of free cash flow as net debt falls through C$15 billion and C$13 billion. At today’s roughly C$14.5 billion, 75 percent of free cash flow is coming back.
Why B and not higher? Cyclicality, and honesty about the moment. Record Q2 cash flow of C$6.87 billion came with WTI near US$93 during a supply disruption. The dividend stays covered into the low-to-mid US$40s, but the raises have slowed from twice a year to once, and Imperial Oil has actually been the better per-share compounder lately. I cannot put a barrel-price business above the two names ahead of it.
Toromont Industries (TSX: TIH): S Tier
The best operated company on this board, and one I own. Toromont is the Caterpillar dealer for most of Eastern Canada, and Cat territories almost never change hands, so nobody else sells new Cat equipment across its region. Finning has the West, Toromont has the East, and they cannot compete with each other. Every machine sold feeds decades of parts and service revenue, which is about 42 percent of the business: in the 2016 oil bust, equipment sales fell 13 percent while parts and service grew 9 percent.
Then there is the side bet that took over. Toromont paid C$67 million for its 60 percent stake in AVL, which builds the enclosures that house backup generators at data centres, and called it immaterial at the time. AVL’s quarterly revenue went from C$57 million to C$171 million in a year, the equipment backlog more than doubled to C$2.5 billion, and power orders for 2027 exceed C$1 billion.
The dividend has been paid since 1968 and raised for 37 straight years, growing about 12 percent a year for a decade while earnings kept pace, so the payout ratio sits right where it was in 2016, at about 34 percent, with more cash than debt on the balance sheet. Thirteen more raises and it is a Dividend King. The one real knock is price: about 36 times trailing earnings, the 99th percentile of its own decade, after a 46 percent run in a year. You are paying for a lot of good news. The operation earns the S. Just know what multiple you are stepping into.
The Final Board
S: Toromont. A: Thomson Reuters. B: Canadian Natural. C: Fortis. D: Metro. E: CN Rail.
The lesson across all six: a long streak tells you where a company has been, not where the dividend is going. Fifty-two years earned Fortis a C. Thirty years earned CN an E. The two names at the top are there because earnings still outrun the dividend, and that is the only thing that keeps raises honest.
If you want the tools behind every valuation and payout figure in this article, the stock reports, screener and portfolio tracker I used are all part of Stocktrades Premium.
None of this is investment advice. I own Fortis and Toromont, I sold CN Rail for CP, and I disclose positions on screen in the video. Do your own research before buying any stock.
