TSI’s Scott Clayton has uncovered seven standout Canadian non-bank financial companies whose proven dividend sustainability has earned top ratings under economic uncertainty. As featured in our Globe and Mail exclusive, we applied our comprehensive 12-point Dividend Sustainability Rating System to spotlight stocks with the ideal combination for defensive portfolios: consistent and growing payouts, financial strength, and dependable earnings from Canada’s most established non-bank financials.
These high-potential companies span the Canadian financial landscape from life insurance giants to property and casualty leaders, wealth management powerhouses, and diversified holding companies. Whether it’s a Toronto-based life insurance leader, a Waterloo property and casualty specialist, or a Montreal holding company with controlling stakes in major financials, each represents marketplace strength backed by decades of dividend reliability.
Our screening process began with Canadian non-bank financials, then focused on companies demonstrating the strongest fundamentals during periods when traditional banks face economic headwinds. Strong quarterly results signal these non-bank alternatives are thriving despite broader economic uncertainties.
TSI’s Dividend Sustainability Rating System scores each company on critical factors: dividend history (with bonus points for longer payment streaks and recent increases), management’s unwavering commitment to payouts, resilience during economic cycles, minimal foreign currency or political risks, robust balance sheets with manageable debt, sufficient cash flow coverage, and proven earnings power over multiple market cycles. We award additional points for industry leadership positions that create competitive moats.
Excerpt from theglobeandmail.com, DATE, 2025
What are we looking for?
Sustainable dividends from Canadian non-bank financials set to prosper despite risks to the economy.
The screen
Several of Canada’s Big Five banks reported quarterly earnings this week that beat their forecasts. Notably, the improved results were spurred by lower loan-loss provisions as the impact of U.S. tariffs on their loan portfolios remained muted.
Going forward, the banking outlook should stay positive but cautious as Canada and the U.S. continue with trade negotiations. In the meantime, this country’s economy will benefit from tariff exemptions under the existing U.S.-Mexico-Canada trade agreement.
We still see all the Big Five as attractive long-term investments, even as they leapfrog each other in performance and investment desirability. That’s why we advise most Canadians to invest in two or even three of them.
Still, our analysts at The Successful Investor think it’s a good time, as always, to diversify your financial-sector holdings beyond the banks. That’s especially so if you focus on stocks paying sustainable dividends.
From a list of Canadian non-bank financials, we identified leaders with steady growth prospects plus the added appeal of sustainable dividends. We then applied our TSI Dividend Sustainability Rating System. 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
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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.
More about TSI Network
TSI Network is the online home of The Successful Investor Inc. – the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor, and the TSI Dividend Advisor. TSI Network is also affiliated with Successful Investor Wealth Management.
Number Cruncher Stocks: 7 Canadian non-bank payout champions
What we found
Our TSI Dividend Sustainability Rating System generated seven stocks:
Sun Life Financial Inc. (with a 4.4% yield), and Manulife Financial Corp. (4.2%), both headquartered in Toronto, are among Canada’s leading life insurers.
Another Toronto-based leader, Fairfax Financial Holdings Ltd. (0.9%), mainly sells insurance and reinsurance, but also manages a large investment portfolio.
Toronto-based Intact Financial Corp. (2.0%) offers investors exposure to Canada’s largest provider of property and casualty insurance.
Waterloo, Ontario-based Definity Financial Corp. (1.1%) is also a provider of property and casualty insurance in Canada.
Winnipeg-headquartered Great-West Lifeco Inc. (4.4%) is top life insurer in Canada.
And finally, Montreal-headquartered holding company Power Corporation of Canada (4.2%) has controlling stakes in both Great-West Lifeco and IGM Financial Inc. The latter is Canada’s largest independent mutual fund provider.
We advise investors to do additional research on investments we identify here.
Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.
