TSI senior analyst Scott Clayton has picked out seven Canadian and U.S. dividend payers using significant acquisitions to extend their reach, strengthen their operations, and pursue higher long-term earnings. Featured in our latest Globe and Mail column, these companies aren’t simply chasing growth for its own sake. They’re buying assets, technologies, and businesses that fit closely with their established operations.
Large takeovers always introduce execution risk. An acquirer can overpay, take on excessive debt, or struggle to integrate its new business. But well-managed companies can reduce those risks by buying proven operations that complement their current assets, customers, expertise, and distribution networks. That’s the common thread among these seven selections.
We applied our disciplined 12-point TSI Dividend Sustainability Rating System and found appropriate companies that combine acquisition-driven expansion with the financial qualities needed to keep paying dividends. Our screen emphasizes a dependable payment record, recent dividend increases, management commitment, manageable debt, adequate cash, and long-running earnings and cash flow capable of supporting payouts.
Each selected company is seeking to make its business larger or more capable, while retaining the balance-sheet strength and cash-generating power that dividend investors value.
One energy firm’s $2.6 billion purchase deepens its position in Western Canada’s Montney region. The geographic fit could help lower operating costs and lift cash flow. Elsewhere, another firm has expanded its aerospace capabilities, another has made a major move in liquefied-natural-gas infrastructure, and yet another has added a global index provider to broaden its data offerings.
Excerpt from theglobeandmail.com, September 3, 2026
Sustainable dividends from companies using big acquisitions to broaden their market reach and earnings.
The stock price for oil company Ovintiv Inc. has moved up since its February 2026 acquisition of the remaining shares of NuVista Energy Ltd. It paid $2.6 billion.
NuVista expands the company’s reach to adjacent oil deposits in Western Canada’s Montney and Northeast B.C. regions. The close proximity lets the merged company reduce costs while boosting cash flow.
Our analysts at The Successful Investor point out that most growth-by-acquisition strategies carry risk. Still, top firms can limit fallout by targeting smaller purchases or, as Ovintiv did, by buying proven assets that complement their own existing operations.
Our search started with U.S. and Canadian firms that have recently undertaken major acquisitions to expand their operations and to spur profitability. We then applied our TSI Dividend Sustainability Rating System to those offering shareholder dividends. Our system 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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7 dividend payers pursuing growth through acquisitions
Ovintiv (with a 1.8% yield), with its headquarters in Denver, but with a major regional office in Calgary, operates two core properties: Montney (B.C.) and Permian (Texas). In addition to natural gas, these fields produce large amounts of oil and natural gas liquids. Ovintiv is set to gain even more as it further successfully integrates NuVista Energy.
Eaton Corp. PLC (1.1%), headquartered in Ireland, is a power management company. It serves many markets: datacentre, utility, industrial, commercial, machine building, residential, aerospace and mobility. In January 2026, it completed the acquisition of Ultra PCS Limited, a U.K.-based provider of electronic controls, pneumatic systems and data processing solutions for global aerospace customers. Eaton paid $1.55 billion.
Baker Hughes Company (1.5%), headquartered in Houston, is an energy technology company serving customers worldwide. In July 2026, it bought Chart Industries for $13.6 billion. Chart designs and makes technologies and equipment for gas and liquid molecule-handling. It should be a strong fit for Baker Hughes, in part because of its growing focus on the fast-growing liquefied natural gas market.
TMX Group Ltd. (1.8%), based in Toronto, is an operator of public trading platforms, including the Toronto Stock Exchange. It also sells a wide range of financial, corporate, and trading data. In August 2026, TMX Group completed the purchase of California-based global index provider RAFI Indices LLC for $683 million. RAFI currently tracks approximately 90 indexes and will add to TMX’s offerings.
Saint Paul, Minnesota-headquartered Ecolab Inc. (1.0%) provides water, hygiene, and infection prevention solutions and services to businesses worldwide. In March 2026, it announced acquisition of CoolIT Systems, a provider of liquid-cooling technology for next-generation datacentres. Ecolab is paying $4.75 billion for the Calgary-based company. The combination of CoolIT’s liquid-cooling technology with Ecolab’s Global Water business should accelerate Ecolab’s growth.
Based in Irving, Texas, Flowserve Corp. (1.1%) manufactures industrial pumps, valves, and other machinery for industrial use of dangerous fluids. The company’s June 2026 purchase of Trillium Flow Technologies’ Valves Division, for $490 million in cash, strengthens its offerings for nuclear reactors.
And finally, Laval, Quebec-headquartered Alimentation Couche-Tard Inc. (1.0%) operates convenience stores, mostly in North America and Europe. The company now plans to acquire Poland’s largest convenience retailer Zabka for about $8.7 billion U.S. to expand its footprint in central and eastern Europe.
Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.
