TSI’s Scott Clayton has identified five compelling dividend-paying companies now in the crosshairs of activist investors. As featured in our latest Globe and Mail column, we applied our proven 12-point Dividend Sustainability Rating System to uncover businesses with solid long-term fundamentals where outside pressure could unlock value while maintaining dependable income streams.
These companies operate across diverse industries ranging from industrial manufacturing and energy infrastructure to retail and specialty foods. All share a common thread: activist investors pushing for strategic changes. Whether it’s calls for asset spin-offs, cost reductions, or share buybacks, each situation is drawing renewed attention to underlying value and dividend strength.
Our process began with firms currently facing activist involvement, then narrowed to those with the financial resilience to sustain and potentially enhance shareholder payouts. In many cases, this external pressure acts as a catalyst to highlight overlooked strengths while encouraging more disciplined capital allocation.
TSI’s Dividend Sustainability Rating System evaluates each company based on key criteria: consistent dividend payments (with added weight for longevity and recent increases), management’s commitment to returning capital, stability across economic cycles, limited geopolitical or currency exposure, strong balance sheets, and reliable earnings and cash flow. We also reward industry leadership, which can help companies withstand both market volatility and activist demands.
Excerpt from theglobeandmail.com, April 30, 2026
Sustainable dividends from companies under pressure from activist investors but otherwise sound.
Canada’s Barrick Mining Corp. says it’s on track to separate its North American gold operations from its international ones. As a key step to satisfying activist investors, the split paves the way for a primary New York Stock Market listing for the North American offshoot.
The IPO plan also highlights the power of activist investors to shape even the largest of companies. In Barrick’s case, it was Elliott Management that spurred the decision to hive off the lower-risk North American assets from those in more volatile jurisdictions.
Generally, activist investors take a significant shareholding in what they see as underachieving companies and then push for change. Their demands are often for seats on the board of directors or a call for the target company to jettison subsidiaries to increase shareholder dividends or share buyback programs.
Whatever the outcome, activist pressure draws stock market attention to a company’s underlying value. It just as often boosts dividend sustainability.
Our search started with a list of corporations now the target of investor activism but with already-strong, long-term prospects. We then applied our TSI Dividend Sustainability Rating System to a short list of income payers. It awards points to a stock based on key factors:
- One point for five years of continuous dividend payments
- Two points for more than five
- Two points if it has raised the payment in the past five years
- One point for management’s commitment to dividends
- One point for operating in non-cyclical industries
- One point for limited exposure to foreign currency rates and freedom from political interference
- Two points for a strong balance sheet, including manageable debt and adequate cash
- Two points for a long-term record of positive earnings and cash flow sufficient to cover dividend payments
- One point for an industry leader
Companies with 10 to 12 points have the most secure dividends, or the highest sustainability. Those with seven to nine points have above average sustainability; average sustainability, four to six points; and below average sustainability, one to three points.
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5 dividend plays under activist pressure
Headquartered in North Carolina, Ralliant Corp. (with a 0.5% yield) makes and services precision instruments and highly engineered products. Activist Irenic Capital Management has built a roughly 2% stake in Ralliant, and wants it to cut expenses, buy back more shares and focus more on its defence and electronics businesses.
Target Corp. (3.6%), based in Minnesota, is a major retailer in the U.S. discount department store segment. Activist investment firm Toms Capital Investment now holds a stake in the company, although has yet to make any demands. Still, based on its recent investments in other trouble companies, the activist may pressure Target to put itself up for sale or sell some of its real estate assets (the retailer owns 75% of its stores).
Baker Hughes Co. (1.4%), with its U.S. headquarters in Houston, makes turbines, compressors, condensers and other machinery for energy producers and industrial operations worldwide.
Activist investment firm Ananym Capital, which owns an undisclosed stake in Baker Hughes, wants the company to spin off its oilfield equipment operations (about 50% of total revenue). Demand for these products has weakened as oil producers drill more efficiently, reducing their need for outside help. The remaining company would provide critical equipment and services to operators of power plants and liquefied natural gas facilities.
Premium Brands Holdings Corp. (4.1%), based in Richmond, B.C., is a specialty-food manufacturer and distributor based in Richmond, B.C., with operations also in the U.S. Texas-based Alta Fox Capital Management, which now has a 1.5% stake in Premium Brands, says that the company’s shares are “materially undervalued” and Premium needs to make changes to boost value.
Headquartered in Irving, Texas, Flowserve Corp. (1.0%), manufactures industrial pumps, valves, and other machinery for several industries that use difficult-to-handle or corrosive fluids. These include power utilities, and oil and gas, chemical and related firms. Flowserve is now the target of activist Starboard Value. Starboard often pushes for new CEOs or cost cutting.
Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.
