Veritas Report on Dividends:
Outlook for 2026
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We recently released our Veritas Report on Dividends: Outlook for 2026 to clients, and once again, it is proving to be one of our most popular reports of the year.
The cross-sector report highlights companies our analyst team thinks are best positioned to deliver robust dividend growth within each sector across our coverage, as well as companies with dividends we think investors should be cautious about in 2026.
Given the uncertain macroeconomic backdrop, we favour companies that operate with reasonable balance sheet debts, manageable payout ratios, and solid capital deployment strategies, as this approach affords substantial financial flexibility to maneuver economic shocks. Furthermore, short-term money market rates have declined in tandem with the cumulative 250 bps rate cuts by the BoC since mid-2024. In our view, this enhances the appeal of locking in meaningful yields offered by well-positioned companies while avoiding value traps.
For the best yield and dividend growth companies, we generally look for BUY-rated stocks with meaningful yields above 3%, though there are exceptions in sectors such as Consumer Staples & Discretionary, where yields in that range with attractive dividend growth are not available. However, we favour names with long histories of dividend growth, such as grocers, or names that emphasize total shareholder returns (dividends + buybacks), such as the energy sector, over the more cyclical sectors where dividends are not prioritized. Two examples are mining and industrials.
For the names that we are cautious about, we are not necessarily forecasting a dividend cut. Rather, we suggest that investors be mindful of company-specific risks.
Since we started our dividend reports in 2024, our Recommended Dividend Stocks have outperformed the S&P/TSX total return index, while our Cautionary Dividend Stocks have underperformed. We note that this is a limited sample size, but it indicates that prioritizing Veritas-calculated FCF growth, normalizing cash flows across sectors, and emphasizing balance sheet strength can outperform the benchmark.
Notes: Veritas' Recommended Dividend List and Cautionary Dividend Lists' performance is measured from its inception date, January 16, 2024, to December 31, 2025. Performance represents total returns over the applicable holding periods based on the Recommended Dividend Stocks Lists and Cautionary Dividend Stocks Lists published on January 16, 2024, July 25, 2024, January 15, 2025, and July 16, 2025. The Dividend Lists are equal-weighted and rebalanced upon changes to recommended holdings on dates a new dividend report is published. Returns greater than 1-year are presented as compound annual growth rates.
Base Subscription
Our bi-annual dividend reports are part of our Base Investment Research Subscription, which also includes our V-List model portfolio, our Daily Ledger and Weekly Journal newsletters, and our Veritas Quality Rating reports.
This subscription is ideal for private investors and financial advisors who want to make informed decisions, but do not need full access to all our research or to consult with our analysts.
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Veritas Base Subscription
We are offering our new dividend report as part of our Base Annual Subscription, designed for financial advisors and investors who don't need everything we publish (we publish about 1,000 reports, newsletters, and videos per year).
Your base subscription would include:
- V-List: The V-List is a concentrated model portfolio of 12 to 25 Canadian companies recommended by our analysts as the best investment opportunities drawn from our firm's research. Stocks are selected based on their liquidity, lower volatility, and potential for long-term capital appreciation. Bottom-up fundamental analysis and a strict review of accounting and disclosure practices identify companies with defensible competitive advantages and the ability to generate meaningful cash flow. The V-List has outperformed the S&P/TSX Composite Index by 289 basis points (as of December 31, 2024, from inception on October 31, 2004). You can find more about our V-List and its track record here.
- Daily Ledger: This is our daily email newsletter, which provides short executive summaries of all our recently published research, any thoughts or comments we have on the markets, and material news on the companies we cover.
- Journal: A Friday newsletter capping the week and highlighting key points and observations from our research from the week.
- Annual dividend report: Our Top Picks for sustainable dividend growth from our coverage list (about 85-90 companies) as well as dividend names that we are cautious about.
- Veritas Quality Ratings: Our Veritas Quality Ratings score each company out of 25 on five key risk metrics that have proven to affect stock price performance: Accounting, Business Operations, Corporate Governance, Balance Sheet Risk, and Cash Flow Sustainability. These Quality Ratings factor into our investment recommendations. Quality Ratings reports are 1-2 pages and also provide a summary of our investment thesis and valuation. You can find out more about them here.
- Fact Finders: These are our CEO's video webinars/podcasts with expert guests. He does 10-12 per year. Our clients can join live and have full access to the library of more than 100 guests. After about a month, we release the replays free to the public. You can find them here.