As markets power ahead near the end of 2025, dividend-oriented investors should consider rotating into stocks that offer both income and growth potential. With broad indexes rallying across financials, energy, and materials, defensive positions with rising payouts can serve as ballast and long-term return drivers in portfolios.

Two Canadian dividend growth stocks stand out for their combination of attractive yields, strong fundamentals, and potential for future cash flow expansion.

1. Energy Infrastructure with Yield Stability

The first stock to consider operates in the midstream energy sector, transporting and distributing essential resources such as natural gas and crude oil. After lagging behind the broader market earlier in the year, its shares now trade at a more accessible valuation, presenting a compelling entry point for yield-focused investors. The company delivers an above-average dividend yield relative to many equity income alternatives and has a long history of growing its payout through multiple commodity cycles. Management’s focus on operational efficiency and disciplined capital allocation supports a sustainable distribution, while several new projects moving closer to commissioning add upside potential for cash flow in the next year.

This combination of reliable income, project-driven growth, and an improved valuation narrative makes the company a compelling pick for investors who want both current yield and participation in future appreciation.

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2. Commodity-Linked Dividend Growth with Macro Exposure

The second recommended stock operates in the natural resources sector, where exposure to commodities like gold adds a macro hedge to dividend income. While this company’s share price can be more volatile than traditional utilities or banks, its business benefits from supportive underlying commodity fundamentals, which tend to strengthen during periods of economic uncertainty or currency weakness. Its current dividend yield, though modest compared with some income plays, is backed by solid earnings and cash generation.

Additionally, the company’s forward valuation metrics suggest room for capital appreciation should commodity prices remain robust. The potential for increasing dividends over time—supported by both organic growth and strong free cash flow—reinforces its suitability for long-term income investors seeking diversification beyond traditional sectors.

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Investor Takeaway

Both stocks offer differentiated ways to capture dividend income while participating in broader market momentum. Energy infrastructure provides stable, high yield with growth catalysts, while natural resource exposure adds diversification with macro tailwinds. For investors seeking income and total return in 2026, these names merit close attention.