Investing in dividend shares you can make a passive income flow at low costs. However, In recent years, different TSX shares, such as Algonquin Power And Northwest Healthcarewere forced to lower their dividends due to rising interest rates and a challenging macro environment.
It is therefore essential to look beyond the dividend yield of a company and to analyze whether these payouts are sustainable about the market cycles. Ideally, you must invest in TSX shares that grow their cash flows and dividend payments over time, which increases the proceeds against costs.
Here are two such ultra-safe TSX dividend shares that I would now buy.
Is these Blue chip shares a good buy?
Canadian Pacific Kansas City (TSX: CP) Own and operates a Transcontinental Freight Railway in Canada, the United States and Mexico. It transports a wide range of goods, including grain, coal, potas, fertilizers, forest products, energy, chemicals, plastics, metals, minerals, consumer products and much more. It also offers rail and intermodal transport services via a network of approximately 20,000 miles for business centers.
In the second quarter (Q2) of 2025, CPKC increased sales by 3% year to year to $ 3.7 billion and the volume increased by 7%. In addition, the adjusted profit per share extended to $ 1.12 as the company ratio improved by 110 basic points to 60.7%.
CEO Keith Creel has extensively tackled the proposed UP-NS fusion and positioned CPKC as uniquely located to take advantage of potential consolidation of the industry. The company expects to be an active participant in the regulation process, with which he argues for concessions that can offer improved access to markets such as Houston.
The management again confirmed its guidelines for the entire year, aimed at an operational ratio of less than 60% and Midden-single-figure volume growth. It is expected that the free cash flow will improve, powered by a lower capital intensity and a focus on growth investments.
The railway giant has increased its annual dividend per share from $ 0.37 in 2016 to $ 0.76 in 2024. Analysts predict dividends to increase to $ 1.23 per share in 2028. In particular, the free cash flow is expected to expand $ 2,44 billion in 2024.
The bull case for this TSX dividend advantage
Valued on a market capitalization of $ 288 billion, Royal Bank of Canada (TSX: RY) is a bank giant. In Fiscal Q3 of 2025 (ending in July), RBC delivered a return on equity of 17.7%, which exceeded its goal of 16%.
The bank reported a turnover of record capital markets of $ 3.8 billion and maintained its leading efficiency ratio of 35% in personal and commercial banking, with the power of its diversified business model.
RBC recently completed the acquisition of HSBC Canada, which resulted in $ 740 million in cost synergies. The successful integration of the commercial banking capacities of HSBC, in particular in Supply Chain and Treasury Management, stimulates meaningful cross-sell opportunities with $ 300 million in income synergies.
Credit quality stabilized if consumers improved uncovered loans while the provisions of loss loss moderated after increased Q2-builds. The management maintains a conservative approach and shows the confidence that geopolitical headwinds can be manageable in view of the resilient economy of Canada and the prosperous customer base of RBC.
With diversified sales flows, premium market positioning and multiple growth catalysts on personal banking, asset management and capital markets, RBC seems to be well positioned to maintain differentiated returns while retaining the conservative risk profile.
The bank manager has increased its annual dividend per share of $ 3.24 in tax 2016 (ending in October) to $ 5.60 in tax 2024. Analysts predict dividends to rise to $ 7.34 per share in 2028.
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