TSI’s Scott Clayton has pinpointed six Canadian consumer‑focused companies redefining profitability through cost discipline and smart automation. These businesses span transportation, food, agriculture, and beverages and they have one key factor in common: they’re tightening operations while maintaining reliable dividends for long‑term investors.
As covered in our Globe and Mail column, TSI applied its proprietary 12‑point Dividend Sustainability Rating System to determine which companies combine operational agility with income consistency. From a Montreal-based rail innovator reducing management layers to a national grocer rolling out robotic warehouses, these firms are investing in technologies that sharpen efficiency and protect shareholder value and income.
The list also includes producers of fertilizers, dairy, beer, and wine. Each one is transforming its manufacturing and supply systems to reduce costs and secure steady cash flow. Together, they reflect a broader Canadian trend: leaner companies driving both competitiveness and sustainable payouts.
Excerpt from theglobeandmail.com, January 22, 2025
Sustainable dividends from Canadian companies set for strong gains by cutting costs and streamlining operations.
Canadian National Railway Co. is a recent example of a company making headlines for its efficiency moves. The country’s largest railway is cutting 400 management positions across Canada and the U.S. – or about 6% of its non-unionized workforce. The plan is expected to save $75 million annually.
There’s no question restructuring often focuses on trimming payroll, but the best plans also spur long-term growth.
To find companies winning those gains – increasingly through technology like artificial intelligence and robotics – we started with a list of leading players from across sectors. With a focus on income stocks, we then narrowed that list before applying our TSI Dividend Sustainability Rating System. It awards points to a stock based on eight criteria:
- 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.
Montreal-based Canadian National Railway Co. (with a 2.6% yield) is cutting management positions. Quebec-based grocer Metro Inc. (1.5%) has built technologically advanced fresh and frozen food distribution centres in Toronto and cut its payroll.
Headquartered in Saskatoon, Nutrien Inc. (3.3%) is the world’s largest producer of agricultural fertilizers. The company accelerated its operational efficiency and cost-saving moves last year and expects to report $200 million in total savings for 2025 – with more to come. Andrew Peller Ltd. (4.7%), based in Grimsby, Ontario, is Canada’s second-largest wine producer. The company has now completed a cost-cutting plan that limits rising costs for glass bottles and shipping.
Montreal’s Saputo Inc. (1.9%) is a top global dairy producer. The company continues to streamline its operations – including consolidating its manufacturing plants. And finally, Molson Coors Canada Inc. (3.7%) – jointly-based in Montreal and Colorado – is the world’s third-largest beer maker with brands such as Coors Light, Molson Canadian and Carling. The firm is now cutting 9% of its North American workforce.
Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.
