Financials get a bad reputation in dividend portfolios. Some investors associate the sector with 2008. Others remember the 2023 regional bank failures. Many do not trust companies whose products they cannot describe in one sentence.

I get it.

But the sector is too important to ignore. Banks set the price of credit. Asset managers absorb pension and 401(k) flows. Stock exchanges and financial data firms power the modern market. Insurance companies underwrite the risks that the rest of the economy runs on. If you skip financials, you are skipping the engine room of capitalism.

The trick is to know what you are buying.

Below are my picks across four US financial sub-sectors. Each one scores well on the DSR PRO Rating and the Dividend Safety Score, and each one has a real reason to live in a long-term portfolio.

Disclosure: I own shares of Visa (V). I am a shareholder of Royal Bank (RY.TO) and National Bank (NA.TO) on the Canadian side. This is education, not advice. Do your own due diligence.

How I rank US financial stocks

I run every candidate through the same four-step checklist:

• DSR PRO Rating + Dividend Safety Score: I want both at 3 or higher, from a classic “hold” to solid fundamentals and a reliable dividend. A 5 means top of the class.
• Dividend Triangle: revenue growth, EPS growth, and dividend growth over five years. All three need to move in the same direction.
• Dividend history and streak: how long has the company raised the dividend without interruption? In financials, the streak matters more than in most sectors because of how often the cycle bites.
• Yield vs 5-year average: if the forward yield sits above the 5-year average, the stock may be undervalued.

No screener tricks. Just discipline.

Best US Banks

JPMorgan Chase (JPM): PRO 4 | Safety 4

Investment thesis: JPMorgan is the most dominant bank in the United States, leading in investment banking, commercial banking, credit cards, retail banking, and wealth management. The diversified model lets it capitalize on every part of the cycle and spread technology costs over a base of clients no competitor can match. Higher rates have driven record net interest income. Forward yield 1.90% (5-year average 2.35%), 15-year streak, payout 28.85%. JPM is the rare US bank I would want in a dividend portfolio.

Bank OZK (OZK): PRO 4 | Safety 4

Investment thesis: Bank OZK is a specialized regional bank led by CEO George Gleason since 1979. Its Real Estate Specialties Group runs disciplined construction and bridge lending on large commercial real estate projects, and the bank is scaling a Corporate and Institutional Banking division that has grown from 18 to 97 employees across 42 industry niches. Net interest margin sits at 4.20%, one of the strongest in regional banking. Forward yield 3.90% (5-year average 3.45%), 27-year streak, payout 28.35%. A regional bank with a dividend track record most US banks cannot match.

Best US Stock Exchange and Financial Data

S&P Global (SPGI): PRO 4 | Safety 4

Investment thesis: S&P Global is the dominant financial information business in the world. Credit ratings, indices, market intelligence, and commodity insights live inside the financial system itself. The S&P 500 is licensed by every major ETF issuer. Forward yield 0.90% (5-year average 0.80%), 52-year streak (Dividend King), payout 26.15%. The longest streak in the group.

CME Group (CME): PRO 4 | Safety 4

Investment thesis: CME Group is the leading US derivatives exchange operator, with a near-monopoly in US futures and options across interest rates, equities, FX, commodities, and metals. CME holds a 27% stake in S&P Dow Jones Indices and is the exclusive venue for S&P futures trading. The dividend structure pairs a regular quarterly with an annual variable special, so the headline forward yield (0.00%) understates total cash return: the 5-year average yield sits at 2.05% and the 18-year streak shows total dividend growth even when the special varies. The most defensible balance sheet in the sub-sector.

Nasdaq (NDAQ): PRO 4 | Safety 4

Investment thesis: Nasdaq operates the actual exchange and a large analytics and anti-financial-crime software business. Listing fees provide recurring revenue, and the data + tech segments add pricing power. Forward yield 1.35% (5-year average 1.30%), 11-year streak, payout 33.60%. The cleanest way to own a US stock exchange.

Best US Insurance

Chubb (CB): PRO 4 | Safety 4

Investment thesis: Chubb is the largest commercial property and casualty insurer in the world, with global reach and a focus on high-net-worth personal lines. The model is the closest US analog to Intact (IFC.TO), my preferred Canadian insurer. Forward yield 1.20% (5-year average 1.40%), 30-year streak, payout 14.75%, beta 0.44. Low yield, low beta, and a very conservative payout ratio.

H3: Travelers (TRV): PRO 4 | Safety 3

Investment thesis: Travelers is a pure-play US property and casualty insurer with strong commercial lines and personal auto exposure. Underwriting discipline has held up through hurricane seasons and the inflation cycle. Forward yield 1.65% (5-year average 1.85%), 21-year streak, payout 15.80%. A solid backup for investors who want US-only P&C exposure.

Best US Asset Managers

BlackRock (BLK): PRO 4 | Safety 4

Investment thesis: BlackRock is the largest asset manager in the world, with size and scale no competitor can match. The Aladdin technology platform adds a recurring software business inside the asset manager, and the 2024 Global Infrastructure Partners acquisition gave BLK a $150B+ private markets footprint. Forward yield 2.15% (5-year average 2.30%), 14-year streak, payout 58.80%. Management raised the dividend by 10% in 2026 after a quiet stretch.

Main Street Capital (MAIN): PRO 3 | Safety 3

Investment thesis: Main Street Capital is a Business Development Company that lends to and invests in lower-middle-market US companies. The model pairs a monthly distribution with annual special dividends, supported by an in-house underwriting team focused on first-lien senior secured structures and an exceptionally low operating-expense-to-assets ratio. MAIN compounded NAV through cycles and only missed a special dividend in 2020. Forward yield 5.60% (5-year average 6.05%), 13-year streak, payout 76.85%. The 3/3 rating reflects BDC structural risk: this is a yield play, not a sleep-easy stock.

Bonus: payment networks

I cannot write about US financial stocks without flagging Visa (V) and Mastercard (MA). Both score PRO 5 / Safety 5: top of the class. They operate in a duopoly protected by global merchant adoption, and they are money-printing machines with very low capital intensity. Technically classified as Credit Services rather than banks or asset managers, but ignoring them in a US financial article would be a mistake.

Visa moves over $15 trillion in annual transaction volume across 200+ countries, with over 50% global market share. The asset-light model earns a fee on every swipe, tap, or click, with an operating margin of around 67% and an ROE of 52.75%. Forward yield 0.80% (5-year average 0.80%), 14-year streak, payout 23.35%. The moat sits in network effects across 14,500 financial institutions and over 50 million merchants.

Mastercard processed over $8 trillion in payments in 2024 and grows faster than Visa despite being the #2 player. ROE of 210.50% reflects the asset-light, low-capital-intensity model. Cross-border transactions remain the most profitable segment, and management is targeting 12% compound annual revenue growth through 2029, with cybersecurity (the $2.65B Recorded Future acquisition), tokenization (around 40% of transactions), and AI services layered on top. Forward yield 0.70% (5-year average 0.60%), 12-year streak, payout 18.95%.

The Ultimate Safe List to Get Dividend Growth Stock Ideas

To help you build a solid portfolio with dividend growth stocks, I have created the Dividend Rock Stars List, showing about 300 companies with growing trends.

You can read on to understand how it is built and why it’s the ultimate list for investors, or you can skip to the good stuff and enter your name and email below to get the instant download in your mailbox.

The verdict

Canadian banks and insurers remain my preferred dividend ideas in the financial sector. The oligopoly structure, the regulatory protection, and the long dividend track records are hard to beat.

But the US has real heavyweights worth owning. JPMorgan for banks. S&P Global for the financial data and exchange angle. Chubb for global property and casualty insurance. BlackRock for asset management. And Visa or Mastercard, if you want a money-printing machine on top.

Your portfolio has finite room. Pick the one or two names whose thesis you actually understand, then hold them long enough for the dividend growth to do its work.

The post The Best US Financial Stocks for a Dividend Growth Portfolio appeared first on The Dividend Guy Blog.

In 2016, I made a life-changing decision: I took a sabbatical, put my family in a small RV, and we drove all the way to Costa Rica.

Upon my return in 2017, I officially quit my job as a private banker at National Bank and started working full-time on my baby: Dividend Stocks Rock. I also decided to manage my pension account held at the National Bank. I’ve built and managed this portfolio publicly since 2017 to create and track a real-life case study.

In August 2017, I received $108,760.02 in a locked retirement account. Locked means I can’t add capital to the account, and growth is only generated through capital gains and dividends. I don’t report this portfolio’s results to brag about my returns or to suggest you follow my lead. My purpose has been solely to share with our members how I manage my portfolio with all the good and the bad that inevitably takes place each month. I hope you have learned and will continue to learn from my experiences managing this portfolio.

Retirement Webinar Coming Up!

At the end of 2024, I launched Retirement Loop, a membership site for Canadians building or stress-testing their retirement plan. The community grew to 500+ members fast. I had to close the doors to focus on helping those members.

I will reopen the doors for 10 days in May, starting with a free webinar on May 21st.

The topic: the 5 retirement plan vulnerabilities that quietly derail retirement plans that look perfectly solid on paper.

Click here to register for the free webinar on May 21st.

www.retirementloop.ca/webinar

But first, the results!

Performance in Review

Let’s start with the numbers as of May 5^th, 2026 (before the bell):

Original amount invested in September 2017 (no additional capital added): $108,760.02.

• Current portfolio value:$331,857.62
• Dividends paid: $5,699.84 (TTM)
• Average yield: 1.72%
• 2025 performance: +7.34%
• VFV.TO= +12.18%, XIU.TO = +28.88%
• Dividend growth: +1.5%

Total return since inception (Sep 2017- November 2025): +205.13%

Annualized return (102 months): 14.02%      

Vanguard S&P 500 Index ETF (VFV.TO) annualized return (since Sept 2017): 16.18% (total return 257.70%)

iShares S&P/TSX 60 ETF (XIU.TO) annualized return (since Sept 2017): 13.14% (total return 185.60%)

Brookfield does it again

If you hold corporate shares of Brookfield Infrastructure (BIPC) or Brookfield Renewable (BEPC), you probably noticed a big drop in their stock price (about 12% in a single day!). However, if you have the unit version (BIP or BIP.UN.TO), you only noticed a small dent.

Historically, there is a premium paid for the corporate class shares. That is explained by the additional demand for holding shares rather than units from a tax perspective. Institutional investors (mutual funds, pension plans, ETFs, banks), will prefer to hold corporate class shares to avoid dealing with a different tax structure.

So, what happened? Brookfield doing a Brookfield thingy.

The ATM program: what it is and why it matters

In November 2025, Brookfield Infrastructure launched an at-the-market equity issuance program (ATM) for BIPC, with a ceiling of $400 million in BIPC shares sold from treasury at prevailing market prices. By the end of Q1 2026, BIPC had issued 3.8 million shares through this program, raising roughly $180 million.

Here is the key detail: the proceeds are used directly to repurchase BIP limited partnership units on a 1-for-1 basis. BIPC issues new corporate shares, takes the cash, and uses it to buy back BIP units. The combined count of LP units and BIPC shares outstanding is intended to remain roughly the same. The ATM program is structured to be non-dilutive in aggregate.

Why go through this exercise at all? BIPC shares and BIP units are designed to be economically equivalent. Each BIPC share can be exchanged for one BIP unit. They pay the same distribution. They represent the same underlying assets. The difference is structural.

BIP is a limited partnership, which creates tax complexity for certain investors, particularly Americans who receive K-1 forms and institutional investors barred from holding partnership units.

BIPC is a Canadian corporation that trades like a regular stock, pays dividends instead of distributions, and generates T5 or 1099-DIV forms. By shifting the capital mix from BIP units toward BIPC shares, Brookfield expands its eligible investor pool and increases the float of the more broadly investable security.

The bigger picture: a possible full consolidation

The ATM program is the opening move in what may become a more significant structural change. During the Q1 2026 earnings call, Brookfield management disclosed they have begun exploring whether BIP and BIPC should merge into a single combined corporate structure. The stated goals are to improve liquidity, increase index inclusion, and create value for investors on a tax-free basis. Management was clear that this is early-stage work with no timeline attached.

This is worth watching. BIP has been a limited partnership since its inception. A conversion to a pure corporate structure would be one of the more significant structural changes in the company’s history. It would likely increase BIPC’s eligibility for broad equity index inclusion, which would bring in a wave of passive fund buying. Index inclusion is not a trivial event for an infrastructure stock of this size. It would also simplify the tax reporting experience for a large segment of the current unitholder base.

The risk is execution. Any reorganization of this scale requires shareholder votes, regulatory approvals, and careful structuring to maintain the promised tax-deferred treatment. The 2024 reorganization of BIPC to address Canadian tax law changes gives some confidence that management knows how to run this process. But the complexity is real, and investors should not treat the announcement as a certainty.

What this means for you as a DSR member

The Q1 2026 earnings selloff was not a signal that Brookfield Infrastructure’s business is deteriorating. FFO grew 10%. Data segment FFO grew 46%. The company recycled $1 billion in capital in the first quarter alone and is on track toward its 2026 recycling targets. The dividend is growing.

The selloff was driven by three overlapping factors. First, IFRS accounting made the headline net income look terrible while the cash performance was strong. Second, Morgan Stanley’s downgrade gave institutional investors a reason to reduce exposure. Third, the ATM share issuance program, even if non-dilutive in aggregate, creates a visible supply of new BIPC shares in the market that can weigh on price in the short term.

None of these factors change the fundamental investment case. BIPC owns regulated and contracted infrastructure assets across utilities, transport, midstream, and data. Those assets generate predictable cash flows, and those cash flows support a growing dividend. The 7% dividend increase announced not too long ago alongside Q1 2026 results is consistent with the company’s long-term guidance of 5-9% annual distribution growth.

The share structure evolution toward a single corporate entity, if it proceeds, would likely be a long-term positive for BIPC and BEPC shareholders. More index inclusion means more demand. A simpler structure means fewer barriers for institutional capital. These are not reasons to buy the stock today, but they are reasons not to confuse an accounting-driven selloff with a business-driven one.

The underlying Dividend Triangle remains intact. Revenue is growing. FFO per unit is growing. The dividend is growing. If you hold BIPC or BEPC for its income and long-term compounding, nothing about Q1 2026 changes the story.

Stocks are down double-digit after earnings – What the…

As you know, we are in the middle of the earnings season. Dozens of companies are reporting each day. It brings its fair share of fluctuations.

Recently, I received a lot of emails about the Brookfields, as well as about CGI and Capital Power. Those stocks were down between 7.5% and 12% on earnings day.

I get it, it hurts when a stock is down by that much. We want to know if it will get worse or if there is something that we have missed.

But most of the time, it’s just noise.

It’s important to do due diligence, and you are right to email me with questions. I do my best to answer all of them through webinars, podcasts, or I even started recording special videos and send them to PRO members who hold the specific company in their portfolio.

It’s also important to look at the big picture. For example, I do hold CGI, but it’s about 1% of my portfolio. Will it destroy my retirement plan if the stock is down 50%? Not really.

That’s the reason why I don’t look at daily, weekly even monthly stock price movements. Someone told me, “Ah! BICP is back up 3% today, I missed the buy”.

Would 3% make a difference over 25 years? Not really. In fact, even a 10% over 25 years isn’t that significant.

We all love a good deal, but you won’t find them by tracking daily price movements.

Unfortunately, I’ve noticed the market has become quicker to jump to conclusions. Around the same time that some stocks were down double-digit, I saw Visa, Automatic Data Processing and Waste Connection jumping by 8% each.

It seems larger volume of trades are programmed to be executed on earnings reports. It’s either “really good or really bad”. But if you wait a little bit longer, you will notice that great companies always come back.

I will end by telling you I have received zero emails about V, ADP and WCN…

Smith Manoeuvre Update

The portfolio shows 13 companies spread across 8 sectors. My goal is to build a portfolio of thriving companies with a solid dividend triangle (e.g. with positive revenue, EPS and dividend growth trends). The current portfolio yield is at 2.09% with a 5-year CAGR dividend growth rate of 11.93%.

• The portfolio value is now at $34,919.00
• The portfolio debt is at $27,000.
• Interest paid since April 2022: $2,329.91
• Monthly contribution is set at $1,000/month.
• The annual income is $730.26, and the projected income is $814.25
• To report my Smith Manoeuvre, I export the Excel data from my DSR PRO dashboard.

The portfolio is on its way towards generating an extra $1,000 per year in dividends. I’m not there yet, but it will happen in the first months of 2027! By then, my portfolio will be close to $50,000! That will be exciting to see a 13^th influx of $1,000 to boost the portfolio!

Smith Manoeuvre Portfolio Summary

Here’s my SM portfolio summary as of May 5^th, 2026 (before the bell):

$1,000 invested in CGI

CGI reported a good quarter with revenue up 3.3% to $4.16B and diluted EPS up 10.6% to $2.09. Revenue growth was driven by acquisitions: BJSS boosted U.K. and Australia revenue by 16.5%, and Apside pushed Western and Southern Europe up 8.3%. The U.S. Federal segment remained pressured by decision-making delays but posted a 122% book-to-bill ratio which signaled a return to positive organic growth in Q3. Bookings were $4.31B (103.8% book-to-bill) and backlog reached $31.5B, or 1.9x annual revenue. CGI’s AI-first strategy is attracting demand across multiple industries and geographies.

Pension Portfolio Summary

Here’s my pension plan portfolio summary as of May 5^th, 2026 (before the bell):

Total value: $331,857.62 (+$10,450.74, +3.25% from last month).

Automatic Data Processing shows no sign of AI panic

ADP reported a strong quarter with revenue up 7% and adjusted EPS up 12%. Employer Services grew 7% to $3.3B on strong client retention and new business bookings. PEO & HCM Services grew 7% to $1.6B. Interest on funds held for clients added $171M (+13%). Adjusted EBIT margin expanded 80bps to 28.3%. EPS benefited from a lower tax rate. ADP raised full-year revenue guidance to 6-7% growth and adjusted EPS guidance to 10-12%. ADP Assist, its AI assistant, is now embedded across HCM workflows with millions of active users.

Brookfield Renewable generates FFO growth

Brookfield Renewable reported a strong quarter with revenue up 27% and FFO per unit up 10%. Hydroelectric generation reached 8,024 GWh, Wind generated 4,165 GWh, Solar contributed 3,946 GWh, and Distributed Energy & Sustainable Solutions added 1,527 GWh. Total generation hit 17,662 GWh for the quarter. The strong FFO growth was driven by higher generation volumes, inflation-linked contracted revenue increases, and margin enhancements from asset optimization. BEPC added 7 GW of new capacity in 2025. Quarterly dividend held at $0.355/unit after a 5% increase in February 2026. No specific revenue or FFO guidance was provided for 2026.

Fortis as boring as it gets

Fortis delivered a solid Q1 2026, with net earnings of $501M ($0.99/share basic), essentially flat versus $499M a year ago. Revenue rose to approximately $3.4B from $3.3B in Q1 2025, reflecting continued rate base expansion across its regulated utility portfolio. Capital expenditures reached $1.4B in the quarter, tracking toward the full-year $5.6B plan and the $28.8B five-year capital program. The 2026–2030 plan targets a 7% rate base CAGR, growing mid-year rate base from $42.4B to $57.9B by 2030. Management’s 4–6% annual dividend growth guidance through 2030 remains intact, and the $0.64/share quarterly dividend continues. Q1 results met expectations.

Granite REIT improves its payout ratio

Granite REIT posted solid Q1 2026 results. FFO rose to $1.57/unit (+7.5% from $1.46 in Q1 2025) while AFFO held flat at $1.41/unit, impacted by higher maintenance capex. Revenue grew to $165.8M from $154.7M (+7.2% YoY), driven by new leasing activity, contractual rent adjustments, CPI-based increases, and eight US/UK acquisitions made in 2025. Same-property NOI on a constant currency basis grew 8.3%. In-place occupancy was 97.5%, with committed occupancy at 98.3% as of May 6. Granite maintained its 2026 guidance: FFO $6.25–$6.40/unit, AFFO $5.40–$5.55/unit. AFFO payout ratio improved to 63% from 66% in Q1 2025.

LeMaitre Vascular raises guidance

LeMaitre Vascular reported a strong quarter with revenue of $66.6 million, up 11%, and adjusted EPS of $0.68, up 42%. All three geographic regions posted record sales, with EMEA up 20%, APAC up 18%, and Americas up 7%. Grafts led product growth at 20%, followed by valvulotomes at 15% and carotid shunts at 11%. Gross margin reached 72.7%, reflecting strong pricing and product mix. The company raised its full-year 2026 guidance to 12% revenue growth and 26% EPS growth. LMAT compounds steadily through acquisitions and organic growth, supported by a sticky hospital customer base and durable pricing power.

Microsoft disappoints with earnings up 21% (really?)

Microsoft reported a strong quarter with revenue up 18% and adjusted EPS up 21%. Intelligent Cloud led with $34.7B (+30%) as Azure grew 40%. Productivity and Business Processes reached $35.0B (+17%) on Microsoft 365 momentum. More Personal Computing declined to $13.2B (-1%). Microsoft Cloud revenue hit $54.5B (+29%). AI annualized revenue surpassed $37B, up 123%. GitHub Copilot now has 15 million paid users. Operating income grew 16% to $32.0B. Commercial remaining performance obligation surged 110% to $315B. MSFT invested $30.9B in CapEx to support AI and cloud infrastructure build-out. Q4 guidance calls for $86.7B-$87.8B in revenue.

Stella-Jones misses the mark

Stella-Jones posted a mixed Q1 2026. Revenue grew 2.3% to $791M but missed consensus of $819.78M by 3.5%. Adjusted EPS of $1.12 fell 2.6% from $1.15 a year ago and missed consensus of $1.25 by $0.13. Utility Products delivered strong results, driven by sustained demand for wood utility poles and secured contractual commitments. This sales growth was tempered by a decline in pricing, primarily due to a shift in product mix. Residential lumber and industrial products were softer. SJ’s infrastructure-linked business remains durable, though near-term results reflect a softening outside utility poles and some execution headwinds versus analyst expectations.

Toromont Industries continues to surprise

Toromont reported a strong quarter with revenue up 13% and basic EPS up 24%. Equipment Group grew 14% to $1.13B on healthy new and used equipment sales, strong rentals, and solid product support activity. CIMCO added $99M (+3%). Operating margin expanded to 11.6% from 9.1% as AVL enclosure production ramped to support data center requirements in eastern U.S. Bookings surged 44% to $793M and backlog reached $1.7B. Net earnings reached $92.7M (+25%) and operating income grew to $143M (+42%). The balance sheet remained strong with good cash generation.

Visa is… well Visa!

Visa reported a strong quarter with net revenue up 17% to $11.2B and non-GAAP EPS up 20% to $3.31, which was the highest revenue growth since 2022. Payment’s volume grew 9%, cross-border volume ex-intra-Europe rose 11%, and processed transactions increased 9% to 66.1B averaging approximately 730 million per day. Consumer spending remained resilient across geographies. Visa repurchased $7.9B in shares, its largest quarterly buyback, and authorized a new $20B program bringing total buyback capacity to approximately $33B. The quarterly dividend held at $0.670/share. Full-year FY2026 guidance was raised to low double-digit to low-teens revenue and EPS growth.

Waste Connections is no trash

Waste Connections reported a solid quarter with revenue up 6% and EPS up 9%. By line of business, solid waste collection remained the core at $1.7B (about 72% of revenue, up from $1.6B), solid waste disposal and transfer was $386.1M (+6.6%), solid waste recycling was $51.6M (-13%), E&P waste was $179.6M (+19.5%), and intermodal and other was $48.9M (+6%). Management attributed the growth mix to $55.3M of net acquisition contribution in the quarter plus 3.1% organic growth in solid waste, led by 6% core price and 4.7% yield, partly offset by unit volume down 1.5% (with weather called out as a factor) and a small headwind from recycling.

Adding 6.5 shares of Dollorama (DOL.TO)

I had about $1,000 in my cash account (thank you, dividends!), and I benefited from price weakness to buy more of DOL.TO. I considered adding more of Broadcom (AVGO) as mentioned last month. However, at the time of doing the trade, AVGO was sitting at my target of 3% weight while DOL was at 2.65%.

I would have been happy either way.

My Entire Portfolio Updated for Q1 2026

Each quarter we run an exclusive report for Dividend Stocks Rock (DSR) members who subscribe to our very special additional service called DSR PRO. The PRO report includes a summary of each company’s earnings report for the period. We have been doing this for an entire year now and I wanted to share my own DSR PRO report for this portfolio. You can download the full PDF showing all the information about all my holdings. Results have been updated as of April 7th^, 2026. Next quarterly report will be available in July.

Download my portfolio Q1 2026 report.

Dividend Income: $369.98 (+20.1% VS. April 2025)

Another month with more dividends than last year! I added shares of ADP + all companies paid more in dividends vs. last year. That’s the power of dividend growth investing!

Since I started this portfolio in September 2017, I have received a total of $36,112.67 CAD in dividends.  Keep in mind that this is a “pure dividend growth portfolio” as no capital can be added to this account other than retained and/or reinvested dividends. Therefore, all dividend growth is coming from the stocks and not from any additional capital being added to the account.

Final Thoughts

We are now entering the famous “Sell in May and go away” period. The only thing I can say about this saying is that we have been expecting the market to burst in our face for the past 3 years. I’m the first one surprised to see green across the board so far this year again.

As long as your companies report growth, your portfolio will be fine. No matter what the media tells you.

Cheers,

Mike.

The post Portfolio Update – April Dividend Income Report appeared first on The Dividend Guy Blog.

But “own a railroad” is not a strategy. You need to pick the right one.

Three names dominate the North American market: Canadian Pacific Kansas City (CP), Canadian National Railway (CNR), and Union Pacific (UNP). Same industry, same moat, three different profiles.

Here is how I rank them, and why.

Disclosure: I own CNR in my portfolio. I do not own CP or UNP. This is education, not advice. Do your own due diligence.

How I compare railroads

Before I rank anything, I run every candidate through the same four-step checklist:

1. The Dividend Triangle: revenue growth, EPS growth, and dividend growth over five years. All three need to be positive and aligned.
2. Dividend safety: payout ratio, cash payout ratio, and dividend history. I want room to grow and a clean track record.
3. Balance sheet: debt to EBITDA, credit score, and current ratio. A leveraged railroad in a recession is not fun to hold.
4. Yield vs. history: if the forward yield sits above the 5-year average, the stock may be offering better income value than usual.

No spreadsheet tricks. Just discipline.

The scorecard

Source: Dividend Stocks Rock stock cards, Q1 2026 review.

Now, let me walk through why each one lands where it does.

#3: Canadian Pacific Kansas City (CP)

Investment thesis: CPKC is a capital appreciation story, not a dividend story. Management runs the business for total return rather than a growing paycheck.

CPKC has the best growth story in the group. The 5-year revenue number is inflated by the Kansas City Southern acquisition, but the thesis is real: a single-line network linking Canada, the United States, and Mexico, with access to Gulf Coast ports and Mexican trade flows no competitor can match. This integration is now delivering gains in the operating ratio. Cash flow benefits from demand for bulk commodities (grain, fertilizer, metallurgical coal).

So why is it third?

Because CP is not a dividend grower. Management has paused dividend growth multiple times over the past decade. The current dividend streak is one year. The 5-year dividend growth rate is 4.40%, below both CNR and UNP.

If you want a dividend paycheck that grows every year, it does not belong on your shortlist.

#2: Union Pacific (UNP)

Investment thesis: UNP owns an irreplaceable Western U.S. rail network with exclusive access to Asia trade flows through West Coast ports and all six U.S. to Mexico gateways. Coal volumes are in secular decline, but other goods are rebounding. The proposed Norfolk Southern acquisition could add $2.75B in synergies if regulators approve it (decision expected by early 2027), but adds integration risk and regulatory uncertainty. The business is cyclical and tied to the global economy.

The dividend story is where it loses points.

UNP used to be a dividend growth machine. Since 2022, the policy has been hectic. A pause during COVID. A generous post-COVID increase. Another pause in 2023. Two 3% increases in 2024 and 2025. The 3-year dividend growth rate has slowed to 1.75%. The forward yield sits below the 5-year average, suggesting the stock is not offering better income than usual.

UNP also has the lowest credit score and the highest debt-to-equity ratio of the three.

Solid business. Choppy dividend growth policy. That combination keeps it out of first place.

#1: Canadian National Railway (CNR)

Investment thesis: CN runs the only three-coast rail network in North America, connecting the East, the West, and the Gulf of Mexico via the U.S. Midwest. Precision scheduled railroading delivers industry-leading efficiency, and exclusive access to the Port of Prince Rupert is a structural advantage for trade between Asia and North America. Growth comes from pricing power above inflation, new customer projects, and intermodal expansion. 2025 was soft on tariff-induced industrial weakness, and 2026 guidance points to flattish volume with stronger EPS growth, implying continued margin gains in a muted demand environment.

CNR wins on the dividend triangle and the dividend history.

The triangle is balanced: 4.62% revenue growth, 8.63% EPS growth, 8.49% dividend growth over five years. The dividend has been raised every year since 1996. That is 30 consecutive years of increases through recessions, rail strikes, and pandemics. The forward yield sits at 2.40%, above the 5-year average of 2.15%. That is a signal the stock may be offering better income value than usual.

Payout ratios are reasonable (46.78% classic, 61.84% cash), margins are strong (ROE 22.15%, ROIC 9.26%), and the balance sheet carries an investment-grade credit score of 89. CNR also runs the lowest beta of the three (0.99), which matters when the economy wobbles.

The watch-item: management slowed the dividend growth rate to 5% in 2025 and announced a 3% increase for 2026. If that trend continues, the Dividend Safety Score could be downgraded in 2027. I am watching the next two dividend announcements.

For now, CNR is the railroad I want in a dividend growth portfolio.

The verdict

If you want one railroad for dependable dividend growth, CNR is my pick.

If you want growth optionality and you do not need the income, CP is worth a look.

If you want world-class margins but you can live with a choppy dividend policy, UNP fits.

All three are great businesses. Only one fits a dividend growth thesis without compromise.

The post CP vs CNR vs UNP: Which Railroad Belongs in Your Dividend Portfolio? appeared first on The Dividend Guy Blog.

Say “growth,” and some investors get excited. Say “value,” and others nod politely. But say “income,” and everybody pays attention.

I get it.

The whole point of investing is not to die with the biggest portfolio possible. At some point, your money must start working for you. It must generate cash flow. It must help you pay the bills. It must replace your paycheck.

That’s exactly why we now have so many income ETFs.

They promise simplicity. They promise regular distributions. They promise retirement income without too much thinking, managing, or tinkering. For investors who want less complexity and more cash flow, it sounds like the perfect recipe.

But there’s a trap hidden in that promise.

Too many investors focus on the distribution and forget to ask what makes that distribution possible. They put the yield ahead of the strategy. They chase the paycheck and ignore the engine behind it.

That’s how you end up buying products that feel good on paper but don’t necessarily make your retirement plan stronger.

Before you buy any income ETF, you must understand why these products exist, what problem they solve, and where the good ones stop being useful and start becoming marketing.

Why do we have so many income ETFs?

The first reason is simple: investors want to live off their portfolio.

That’s not complicated. If you have spent years or decades building wealth, you eventually want your portfolio to send money back your way. If someone tells you that your investments can generate 4%, 5%, or 6% income and show up regularly in your account, that will naturally catch your attention. The appeal is obvious because it feels like retirement is finally becoming real.

If you have $1 million invested and it generates 5%, you picture $50,000 a year showing up like a paycheck. You don’t have to think about selling shares. You don’t have to care as much about market fluctuations. You just collect the income and enjoy the fruits of your labor.

At least, that’s the story investors tell themselves.

Income also fits into a world people already understand. When you work, you receive a paycheck. When you retire, you want your portfolio to replace that paycheck. That’s why monthly distributions are so popular. Some products even go further by paying more frequently, because firms know investors love the feeling of seeing cash land in their accounts. It creates comfort. It creates familiarity. It even gives a little dopamine hit each time a payment comes in.

But let’s stop for a second.

A paycheck isn’t guaranteed. A dividend isn’t guaranteed. A distribution isn’t guaranteed.

In every case, the income only exists if the business or assets behind it are generating enough return to support it. A job can be lost. A dividend can be cut. A distribution can be reduced. That is why I always come back to the same principle: income is only as good as the total return supporting it.

The second reason we have so many income ETFs is convenience.

Many investors are not interested in building and managing a portfolio of individual stocks. They don’t want to review earnings reports, follow sectors, or decide when to sell a position. They want simplicity. Pick a fund, click buy, collect the distributions, move on.

And honestly, that part makes sense.

As you age, convenience becomes more valuable. At some point, many investors would gladly trade a bit of control for a simpler structure. There is nothing wrong with that. ETFs can absolutely help reduce portfolio complexity.

The danger comes when simplicity becomes an excuse to ignore quality.

If your only question is, “How much does it yield?” then you are no longer building an investment strategy. You are shopping for a product. And investment firms know exactly how to sell those.

The classic solution: dividend-focused ETFs

If you want a simpler portfolio while keeping one foot firmly planted in the world of dividend investing, dividend-focused ETFs are the classic answer.

They’ve been around for a long time. They are easy to understand. They don’t rely on fancy structures or seductive gimmicks. At their best, they simply hold baskets of dividend-paying companies and turn them into a one-ticket solution for investors seeking income and diversification in a single package.

That doesn’t mean I suddenly prefer ETFs over stocks.

I still want to know what I own and why I own it. I like controlling my sector allocation. I like choosing the companies that fit my strategy. I don’t enjoy paying fees for something I can often do better myself. And if I dig into almost any ETF, I usually find names I wouldn’t want in my own portfolio. That makes conviction harder.

But I’m also realistic.

For many investors, dividend ETFs are a perfectly reasonable solution. They simplify portfolio management, they reduce the number of decisions you have to make, and some of them are built around exactly the kind of companies I want to own anyway.

That’s where the nuance begins.

Not all dividend ETFs are created equal.

Some are built for dividend growth. Others are built for a higher starting yield. Some are well diversified. Others are little more than concentrated country or sector bets wearing an ETF label.

Let’s look at a few examples.

VIG: the closest thing to a DSR-style ETF

If you are looking for an ETF that feels the most aligned with a dividend growth mindset, Vanguard Dividend Appreciation ETF (VIG) is probably the cleanest example.

This fund is not built for yield chasers. Its yield sits around 1.55%, which will not impress investors who only care about immediate income. But that is exactly why the structure makes sense. VIG focuses on quality companies with a track record of dividend growth. It tilts toward large-cap names and puts more weight in sectors like technology, financials, healthcare, and industrials.

In other words, this is not a product trying to manufacture income. It is a product built around strong businesses.

That’s a big difference.

As of Dec 31, 2025, it held about 338 stocks and it tilts toward quality large caps, with heavier exposure to information technology (27%), financials (21%), healthcare (16%), and industrial (11%).

If your objective is to own durable companies that can keep growing earnings and dividends over time, then VIG deserves respect. It follows a much more yield-agnostic approach. You are not buying a fat yield today. You are buying quality and long-term dividend growth potential.

For investors who understand that wealth is built through business growth first and income second, VIG makes a lot of sense.

VYM: more yield, still grounded in reality

The Vanguard High Dividend Yield ETF (VYM) takes one step closer to the income crowd, but without going overboard.

Its yield was around 2.34%, which is higher than VIG, though not exactly what I would call “high yield.” That is almost ironic given the name. Still, that tells you something useful right away: this fund is not stretching into dangerous territory just to look attractive. It remains a broadly diversified ETF built around established dividend payers.

VYM spreads its exposure across many sectors and holds hundreds of stocks. You will find many familiar names in the portfolio, including several businesses that dividend growth investors already know and respect. That is why I view it as a reasonable middle ground for investors who want a bit more yield today without completely abandoning quality.

It’s diversified by name count (~560 stocks) and spreads across the market’s classic dividend payers. Sector exposure is led by Financials (21%) with meaningful weights in Technology (13%), Industrials (14%), and Health Care (12.55%), and it explicitly excludes REITs in the benchmark design.

The main trade-off is that the dividend growth profile is less clean than VIG. The distributions do rise over time, but not in a smooth, predictable pattern. That is normal for broad ETFs because the fund is simply passing through dividends received from many different companies with different schedules and growth rates.

Still, if your goal is simplicity and a respectable yield, VYM is easy to understand and easy to justify.

I also made a complete review of Vanguard Retirement Income ETF (VRIF) in this video:

SCHD: where yield and dividend growth meet

If you want one ETF that tends to make income investors happy without forcing them into absurd yield territory, Schwab U.S. Dividend Equity ETF (SCHD) is usually the one that gets the spotlight.

And I can see why.

When doing my research, SCHD showed a yield of around 3.40%, which is noticeably higher than VIG and VYM, but it also posted a stronger distribution growth profile over the past decade than VYM. That’s a rare combination. Usually, when you push yield higher, you sacrifice some growth quality. SCHD has managed to offer a more balanced profile.

Of course, you don’t get that for free.

SCHD is more concentrated than VYM. It owns fewer stocks and leans harder into certain sectors. That means you are taking on more concentration risk in exchange for a better blend of yield and growth.

But at least the trade-off is understandable.

This is still a dividend ETF built around actual companies with profitability and dividend discipline. It is not a product trying to impress you with an eye-popping yield while quietly weakening your long-term return.

Sector weights are led by energy (21%), consumer defensive (18.5%), healthcare (16%), and industrial (11.50%). The stock allocation is more equally weighted than with VYM due to the smaller number of stocks.

For investors seeking a one-ticket U.S. dividend ETF and a more generous starting income, SCHD is one of the stronger options.

Why I’m much less excited about Canadian dividend ETFs

Now comes the part where I become more skeptical.

Canadian dividend ETFs often look attractive because their yields are higher. That is enough to pull in a lot of investors right away. But once you look under the hood, the structure becomes far less exciting.

Funds like VDY, XDIV, and XEI are not really as diversified as many investors imagine. They are mostly concentrated in the same sectors: financials, energy, pipelines, and utilities. In some cases, the top holdings dominate the fund to a point where you may wonder why you’re paying a fee at all.

That is my issue with many Canadian dividend ETFs.

It’s not that they own bad companies. In fact, they often own very solid Canadian blue chips. The problem is that they package the obvious and charge you for it. If you have followed the Canadian market for a while, you already know what the recipe looks like: big banks, large insurers, pipelines, one or two utilities, maybe an energy giant or two, and there you go.

That is not exactly deep portfolio engineering.

The higher yield may look attractive at first, but the dividend growth profile is often weaker than on the U.S. side. The concentration risk is also much higher. So yes, you may collect more income today, but you are often doing so with a less balanced, less flexible structure.

That is why I usually feel investors get a better deal with U.S. dividend ETFs.

With Canadian ones, I keep coming back to the same question: why pay fees to buy the obvious?

The question that matters more than yield

The real problem with income ETFs is not that they exist. The real problem is that investors too often buy them for the wrong reason.

If you use a dividend ETF because it simplifies your life, gives you exposure to quality businesses, and fits inside a broader retirement strategy, that can make perfect sense. If the ETF helps you reduce complexity without sacrificing too much quality, then it is doing its job.

But if you buy an ETF because the yield looks attractive and you hope the rest will take care of itself, that is where mistakes begin.

Income is not the strategy.

Income is the outcome of a strategy that works.

That’s why the first question should never be, “How much does it pay?”

The first question should be, “What does it own, how does it generate return, and can this structure support income over time?”

That mindset changes everything.

It moves you away from product shopping and back toward investment thinking. It forces you to analyze the engine rather than just admire the dashboard. And in retirement, that difference matters a lot more than one extra percentage point of yield.

Own quality first. Then let the income follow.

Download the Dividend Income for Life Guide to learn how to build income that can last through bull markets, bear markets, and everything in between.

The post Income ETFs Are Booming. Here’s What Investors Need to Understand appeared first on The Dividend Guy Blog.

But when digging deeper, there are differences to consider.

These four insurers don’t grow the same way, they don’t take the same risks, and they won’t appeal to the same type of investor. One dominates property and casualty insurance with disciplined underwriting. One leans more toward steady retirement and wealth businesses. One offers more upside through Asia. One has built a more balanced platform across insurance, group benefits, and asset management. On the surface, they all look solid. Under the hood, each has a very different personality.

That’s why this is such a useful stock battle. It’s not really about finding a “perfect” insurer. It’s about understanding which one fits your portfolio best.

If we turn this into a ranking of the best Canadian insurance stocks for dividend growth investors, this is where I land: Intact Financial first, Sun Life second, Great-West Lifeco third, and Manulife fourth. That ranking reflects the full picture: business model, earnings resilience, growth profile, and how comfortably each insurer fits inside a long-term dividend growth portfolio.

Four Insurers, Four Different Engines

All four companies operate in financial services, but they don’t rely on the same models.

Intact Financial (IFC.TO) is the one that stands out from the list. While the others are mostly tied to life insurance, wealth, and retirement products, Intact is a property and casualty insurer. It operates across Canada, the U.S., and the U.K./Ireland through brokers, direct-to-consumer brands like Belairdirect, and commercial platforms. This is a business built on underwriting discipline, claims management, pricing accuracy, and risk selection.

Great-West Lifeco (GWO.TO) is the most retirement-and-benefits-oriented of the group. Through Canada Life, Empower, and Irish Life, it has built meaningful exposure to insurance, wealth, pensions, retirement services, and reinsurance. Empower is the standout piece, giving Great-West a strong foothold in the U.S. defined-contribution market.

Manulife Financial (MFC.TO) is the most globally ambitious. It combines traditional insurance and annuity products with wealth and asset management, and its biggest growth driver is Asia. That gives it more upside potential than some peers, but it also adds more complexity and more sensitivity to market conditions.

Sun Life Financial (SLF.TO) sits somewhere in the middle, and that is exactly why many investors like it. It has grown beyond traditional life insurance to offer asset management, wealth management, group benefits, health solutions, and protection products. It is probably the most balanced among the four life insurers.

If I had to summarize each one in a single line:

• Intact is the underwriting machine.
• Great-West is the retirement and benefits compounder.
• Manulife is the global growth story.
• Sun Life is the most balanced all-around life insurer.

What the Dividend Triangle Tells Us

This is where the differences become much easier to spot.

Intact is in a class of its own in this comparison. Its revenue, earnings, and dividend growth profile are meaningfully stronger than those of the three life insurers. That matters because it shows Intact is not just a defensive insurer with a decent payout. It is also producing real business momentum.

Sun Life comes next and stands out as the strongest of the life insurers. It shows the best balance between earnings growth and dividend growth, while its broader business mix helps reduce its dependence on any one segment.

Great-West is more modest. You get a solid dividend, a dependable business, and exposure to sticky retirement and benefits operations. But the growth runway is narrower, and most of its opportunities lie in mature markets.

Manulife still offers respectable dividend growth, but its earnings profile is less stable, and the business carries more execution risk. That does not make it a bad stock. It just makes it a different kind of fit.

These are capital-intensive businesses, and the real question is who can combine income, resilience, and enough growth to reward you for holding through a full market cycle.

#1 Intact Financial: The Best Overall Insurance Stock

Intact takes the top spot because it combines something dividend investors rarely get all at once: quality, growth, resilience, and consistency.

Its biggest advantage is that it plays a different game. Property and casualty insurance is not the same business as life insurance. Success depends on pricing risk properly, managing claims efficiently, and maintaining underwriting discipline year after year. That is where Intact shines.

The company has built a dominant position in Canada and has expanded intelligently into the U.S. and the U.K. through acquisitions such as OneBeacon and RSA. It now benefits from a broad product suite, diversified geography, and multiple distribution channels. BrokerLink, Belairdirect, affinity partnerships, and commercial platforms all strengthen the model.

Intact also has a data advantage. As the largest P&C insurer in Canada, it can use claims data and pricing models to make better underwriting decisions. That edge is hard to replicate. Management has also been clear about its long-term objective: grow net operating income per share by 10%+ annually while maintaining strong returns across the cycle.

The bear case is not hard to find. Catastrophe losses are rising, and severe weather is becoming a more expensive reality. Regulation limits flexibility in some lines, especially auto insurance. Growth outside Canada also comes with integration risks and more competition.

Still, Intact remains the strongest of the four. It has the clearest edge, the best growth profile, and the most complete investment thesis.

Best for: investors who want the strongest overall insurance business and a high-quality dividend growth compounder.

#2 Sun Life: The Most Balanced Life Insurer

If Intact is the best overall insurance stock, Sun Life is the best life insurer in the group.

What makes Sun Life so compelling is its balance. It is no longer just a traditional insurer collecting premiums and hoping for favorable underwriting. Asset management, wealth, group benefits, health solutions, and insurance all contribute to the story. That creates multiple growth levers and more recurring fee-based revenue.

Its asset management arm is an important source of steady earnings. Its Canadian group benefits platform is strong. Its U.S. health and benefits operations broaden the base. Asia adds another avenue for growth. The result is a business that feels more diversified and more resilient than a classic life insurer.

Sun Life is not risk-free. It remains exposed to financial markets, interest rates, underwriting pressure, and acquisition friction. DentaQuest created some noise and reminded investors that even strong businesses can hit speed bumps.

Still, among the life insurers, Sun Life offers the most complete mix of stability, diversification, and dividend growth.

Best for: investors who want a core long-term insurance holding with a healthy mix of income, moderate growth, and business diversification.

A Great Place to Find More Dividend Growers

If you like businesses with durable models, growing payouts, and strong long-term fundamentals, you should take a look at the Dividend Rock Stars List.

It’s a curated list built to help you find high-quality dividend growth stocks faster, without wasting time sorting through companies that don’t meet the mark. If you want proven dividend growers for your watchlist, this is a great place to start.

#3 Great-West Lifeco: The Steady Hand

Great-West is the kind of stock that rarely steals the spotlight, but it often delivers what conservative investors are looking for.

Its biggest strength is the quality of its business mix. Empower has become a major player in U.S. retirement services, while Canada Life and Irish Life provide dependable exposure to insurance, wealth, and benefits. Management has also been repositioning the business toward more capital-efficient and fee-driven operations, which is exactly the kind of move you want to see in a mature business.

The bull case is simple: Great-West has a dependable platform, strong cash flow generation, and sticky relationships in retirement and benefits. It does not need explosive growth to be a useful dividend growth holding.

The weakness is just as clear. Great-West has limited exposure to faster-growing regions, and its core insurance activities still operate in a highly competitive industry. Growth is harder to come by, and pricing power is limited.

That is why it ranks behind Sun Life. Great-West is dependable, but it is not as balanced and does not offer the same growth flexibility.

Best for: conservative dividend investors who want dependable income and a lower-drama financial stock.

#4 Manulife: The Upside Play With More Moving Parts

Manulife finishes fourth, but that does not mean it should be ignored.

In fact, Manulife may be the most interesting name here for investors looking for a bit more upside. Its Asian operations provide exposure to underpenetrated insurance markets and a rising middle class. Add its wealth and asset management operations, along with its strategic push into private credit and other international initiatives, and you can see why the long-term story still attracts attention.

If everything goes right, Manulife could deliver stronger growth than Great-West and maybe even challenge Sun Life.

But there is more baggage here, too.

Manulife is more sensitive to capital markets. Its earnings profile can be more volatile. Competition in Asia is intense. Its U.S. operations have not always delivered the returns investors would like. And unlike Great-West and Sun Life, Manulife still carries the memory of its 2008 dividend cut.

That history matters in a ranking designed for dividend growth investors. It is not disqualifying, but it is part of the picture.

Best for: investors who want a higher-growth angle, more international exposure, and are comfortable with a bumpier earnings path.

So, Which Insurer Wins?

The honest answer is that each one wins for a different type of investor.

If your priority is the strongest overall insurance company, Intact Financial deserves the crown.

If you want the best balanced life insurer, Sun Life gets the nod.

If your priority is dependable income and a steadier business model, Great-West Lifeco is a very good fit.

If you want more growth potential and can accept more variability, Manulife offers the highest ceiling.

When I look at a stock battle like this, I do not want to get trapped by yield. That is the fastest way to miss what really matters. These four all offer respectable income, but the better question is this: which business do you want to own for the next decade?

For the most conservative investor, Great-West makes a lot of sense. For an investor seeking a more global growth runway, Manulife stands out. For the investor building a classic dividend growth portfolio and looking for the most rounded life insurer, Sun Life looks like the cleanest fit. But if you want the best combination of business strength, underwriting discipline, growth, and long-term execution, Intact comes out on top.

In other words, this battle does not give us one weak name to avoid. It gives us four solid contenders, each with a different role to play.

But if we rank them today, the order is clear: Intact #1, Sun Life #2, Great-West #3, and Manulife #4.

Build a Better Watchlist

Want more stocks like these?

The Dividend Rock Stars List helps you find companies with strong dividend growth potential, proven business models, and the kind of fundamentals that can support long-term wealth creation. It’s one of the easiest ways to build a smarter watchlist and focus your research on names worth owning.

Conclusion

Canadian insurers may look similar from a distance, but they are not interchangeable.

Intact stands above the group thanks to its underwriting edge and stronger growth profile. Sun Life offers the most balanced life insurance platform. Great-West remains a steady and dependable choice for income-focused investors. Manulife brings more growth ambition, but also more moving parts.

That is what makes this sector interesting. You are not choosing between good and bad. You are choosing among different strengths, risks, and portfolio roles.

And when you understand that, picking the right insurer becomes a lot easier.

The post The Best Canadian Insurance Stocks: Which One Deserves Your Money? appeared first on The Dividend Guy Blog.