TSI’s Scott Clayton has identified six standout dividend-paying companies whose proven sustainability has earned top ratings in our comprehensive screening process. As featured in our Globe and Mail exclusive, we applied our rigorous 12-point Dividend Sustainability Rating System to uncover stocks with the ideal combination for defensive portfolios: consistent and growing payouts, financial strength, and dependable earnings from established businesses positioned well away from artificial intelligence sector concerns.
These high-potential companies span diverse industries ranging from off-price retail and life insurance to long-term care services, wealth management, and entertainment. Each one demonstrates the kind of market resilience that appeals to income-focused investors. Whether it’s a Massachusetts-based off-price retail leader capturing market share through value positioning, a major pharmaceutical company profiting from blockbuster medications, or a Toronto insurance powerhouse with generations of dividend reliability, each represents established market strength backed by solid operating fundamentals.
Our screening process began by identifying Canadian and U.S. corporations approaching or at all-time highs, then focused on companies with strong revenue and earnings outlooks but minimal exposure to AI sector dynamics. We then isolated dividend payers and applied our comprehensive rating system to separate true dividend security from companies riding temporary momentum.
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 demonstrated commitment to payouts, resilience during economic cycles, exposure to currency fluctuations and political risk, balance sheet strength with manageable debt levels, sufficient cash flow coverage of dividend payments, and proven earnings power over multiple business cycles. We award additional points for industry leadership positions that create competitive advantages and sustainable market positioning.
Excerpt from theglobeandmail.com, November 20, 2025
Sustainable dividends from top stocks hitting all-time highs – but well removed from any worries about a possible artificial intelligence (AI) bubble.
Investor fears of a potential correction for AI stocks dominated financial headlines this week.
That includes concerns that AI-related firms have overinvested in the new technology and will struggle to meet investor expectations for profitability.
Going forward, AI will continue to advance alongside the rapid expansion of big computing and big data. Even so, we still think the best way for most investors to profit is with firms set to gain from AI’s evolution, yet have a solid base of business outside of that sector. Our analysts at The Successful Investor count IBM Corp. and Microsoft Corp. among those players.
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Meanwhile, investors should continue to prioritize portfolio diversity by also looking for stocks with strong price momentum far removed from the expectations surrounding AI. At the same time, remember any stock at the top end of its historical pricing carries extra risk. That makes it all the more important to focus on companies where their prospects for earnings and sales growth line up with their share-price gains.
Our search started with a list of Canadian and U.S. corporations at or near their all-time highs, with strong revenue and earnings outlooks as well as limited AI exposure. From there, we singled out dividend payers before applying 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
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.
6 dividend champions which avoid AI sector risks
Our TSI Dividend Sustainability Rating System generated six stocks:
The TJX Companies, Inc. (with a 1.2% yield) headquartered in Framingham, Massachusetts, is a leader in off-price retail. Like its competitors, the company purchases merchandise at below-wholesale prices and in turn charges consumers less than retail prices.
Indianapolis-based Eli Lilly and Co. (0.6%), is profiting from a strong pharma lineup, which includes its Mounjaro weight-loss drug.
Extendicare Inc. (2.5%), based in Markham, Ontario, owns and operates long-term care homes. Investors also tap the company’s ParaMed Home Health Care branches, which provide assistance to clients who remain in their own homes.
Winnipeg-headquartered Great-West Lifeco Inc. (3.9%) is a top life insurer in Canada.
Manulife Financial Corp. (3.8%), based in Toronto, is another of the country’s leading providers of life coverage.
And finally, Stingray Group Inc. (2.4%), headquartered in Montreal, is a provider of multi-platform music services. It broadcasts music and video content on several platforms, including radio stations, premium television channels, satellite TV, mobile devices and game consoles.
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.
