Here are three dividend stocks I would consider the best growth stocks right now.
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Bank of Montreal
Bank of Montreal (TSX:BMO) is a leading Canadian bank, and for that reason alone it’s worth considering as one of the best total returns on the market.
With a dividend yield of 3.3% and an impressive recent growth rate (net profit up 16% year on year), this is a blue chip company that I think offers the right mix of income and capital growth for those who think long-term.
The question is of course whether this growth can continue. I think the answer is yes. With a recent buyback of six million shares (indicating robust capital returns thanks to a solid common equity tier-one ratio), there is plenty of upside potential for those looking to take advantage of falling interest rates and rising net interest margins. With 14% earnings growth expected this year, I think there’s probably more upside potential ahead.
Restaurant brands
For investors looking for defensive dividend stocks with a growth direction, I guess Restaurant brands (TSX:QSR) is an excellent choice.
The fast food giant has been providing investors with solid dividend yields averaging 3% for a while now, and that’s part of the investment story in this gem. However, I tend to focus on Restaurant Brands’ world-class banners (including Tim Hortons and Burger King) as key drivers of a long-term growth strategy worth considering. With international expansion underway and a tailwind as consumers look for lower-priced dining options, Restaurant Brands is well positioned to capture market share in its competitive industry.
The company’s fundamentals were also robust. Despite missing 2025 comparative revenue targets of 2.4%, management calls this a “rock bottom.” As such, the company reaffirmed its target of organic operating profit growth of more than 8% by 2028, with earnings per share (EPS) potentially rising 73% next year thanks to the international momentum of Burger King and Tim Hortons.
With a price-to-earnings ratio in the high teens, this is a stock that is undervalued relative to its peers. I like that in this current environment.
Hydro One
Let’s end this list of dividend and growth scenarios with a unique newcomer to this list: the utility Hydro One (TSX:H).
Hydro One is a leading utility in Eastern Canada, focusing primarily on the Ontario market (with a relative monopoly). The company serves approximately 1.5 million customers who need to pay their bills every month and delivers very stable cash flow, which it returns to investors in the form of robust dividend yields.
Hydro One currently yields around 2.3% at the time of writing (much of that lower yield is due to capital growth) and has shown its ability to deliver not only dividend growth, but also growth on the capital growth side.
Hydro One is also fairly valued, with a solid balance sheet and plenty of upside potential as population growth continues in the province of Ontario. I like how Hydro One is positioned here.
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