The Toronto Inventory Trade had a formidable run in 2025, even handily outperforming main U.S. indexes. As of January 16, 2026, the TSX is up 4.2% year-to-date. Nonetheless, regardless of a sizzling begin, many analysts advise warning.
Along with commerce uncertainty, geopolitical dangers have heightened. The Trump administration initiated a tariff battle final 12 months and heightened geopolitical dangers in 2026 following a army intervention in Venezuela.
Given these headwinds and market outlook, prioritizing secure revenue over capital appreciation is a sound technique in opposition to potential volatility. For passive revenue era and defensive positioning, two Canadian dividend giants are key buys for 2026.
Greater than a large
Fortis (TSX:FTS) is a dividend large, however not due to a excessive dividend yield. As an alternative, the time period “large” equates with “king.” This top-tier utility wears a crown due to its rock-solid reliability. FTS has raised dividends for 52 consecutive years. Should you make investments right this moment, the share worth is $72.28, whereas the dividend supply is 3.5%.
An attractive side of Fortis is its sustainable, regulated progress technique. The $36.5 billion electrical and fuel utility firm introduced in late 2025 a $28.8 billion capital plan for 2026–2030 centered on transmission and distribution investments. This new five-year plan additionally helps a strong 7% price base progress from $41.9 billion in 2025 to $57.9 billion by year-end 2030.
The attraction to income-focused traders is the rising payout. Its regulated progress technique features a dividend progress steering of 4% to six% by way of 2030. David Hutchens, President and CEO of Fortis, mentioned, “We stay centered on low-risk, regulated utility progress, and our current choices to promote property additional assist our funding plan and strengthen the steadiness sheet.”
Fortis assures that the five-year capital plan is low-risk and extremely executable. Solely 21% are associated to main capital tasks, and are to be funded primarily by money from operations plus regulated debt.
The diversified regulated utility companies with long-term contracts ship recurring money flows and dividends. That’s the reason Fortis had for years maintained sturdy liquidity and enhanced shareholder worth, however substantial capital necessities.
Turnaround play
BCE (TSX:BCE), Canada’s most dominant telco, has improved its threat profile following a 56% dividend minimize in Might 2025. The choice ensures sustainable payouts transferring ahead. BCE trades at $33.59 per share and pays a 5.2% dividend. The payout ratio is right down to 43.1%, indicating ample room for dividend progress.
The $31.3 billion communications firm was below strain from intense worth competitors, in addition to macroeconomic and geopolitical instability. Mirko Bibic, CEO of BCE, mentioned resetting the dividend was probably the most accountable method to handle BCE’s capital allocation technique. “Primarily, the brand new dividend stage permits us to de-lever and make investments for progress,” he added.
In Q3 2025, working revenues and free money stream elevated 1.3% and 20.6% year-over-year to $6 billion and $1 billion. Notably, web earnings reached $4.5 billion in comparison with the $1.2 billion web loss in Q3 2024. Bibic is assured that the three-year strategic plan, together with a disciplined capital allocation technique, will drive progress in a reshaped working atmosphere.
Revenue era
Canada’s equities would possibly miss a three-peat of double-digit progress in 2026. Nonetheless, traders are safer specializing in revenue era by taking positions in dividend giants like Fortis and BCE.
