Investing in dividend shares permits you to create a passive-income stream at a low value. Nevertheless, in recent times, a number of TSX shares, similar to Algonquin Energy and NorthWest Healthcare, have been pressured to decrease their dividends attributable to rising rates of interest and a difficult macro setting.
So, it’s important to look past an organization’s dividend yield and analyze whether or not these payouts are sustainable throughout market cycles. Ideally, you need to spend money on TSX shares that develop their money flows and dividend payouts over time, which reinforces the yield at value.
Listed here are two such ultra-safe TSX dividend shares I’d purchase proper now.
Is that this blue-chip inventory purchase?
Canadian Pacific Kansas Metropolis (TSX:CP) owns and operates a transcontinental freight railway in Canada, the USA, and Mexico. It transports a variety of products, together with grain, coal, potash, fertilizers, forest merchandise, power, chemical compounds, plastics, metals, minerals, shopper merchandise, and lots of extra. It additionally supplies rail and intermodal transportation providers over a community of roughly 20,000 miles serving enterprise facilities.
Within the second quarter (Q2) of 2025, CPKC elevated income by 3% yr over yr to $3.7 billion, and quantity rose by 7%. Furthermore, adjusted earnings per share expanded by 7% to $1.12 as its working ratio improved by 110 foundation factors to 60.7%.
CEO Keith Creel addressed the proposed UP-NS merger extensively, positioning CPKC as uniquely located to learn from potential {industry} consolidation. The corporate expects to be an lively participant within the regulatory course of, advocating for concessions that would present enhanced entry to markets like Houston.
Administration reaffirmed its full-year steering, concentrating on an working ratio of underneath 60% and mid-single-digit quantity progress. It expects free money circulate to enhance, pushed by decrease capital depth and a concentrate on progress investments.
The railroad large has elevated its annual dividend per share from $0.37 in 2016 to $0.76 in 2024. Analysts forecast dividends to extend to $1.23 per share in 2028. Notably, its free money circulate is predicted to develop from $2.44 billion in 2024 to $5.53 billion in 2029.
The bull case for this TSX dividend inventory
Valued at a market cap of $288 billion, Royal Financial institution of Canada (TSX:RY) is a banking large. In fiscal Q3 of 2025 (resulted in July), RBC delivered a return on fairness of 17.7%, exceeding its 16% goal.
The financial institution reported document capital markets income of $3.8 billion and maintained its industry-leading 35% effectivity ratio in private and industrial banking, showcasing the facility of its diversified enterprise mannequin.
RBC lately accomplished the acquisition of HSBC Canada, which delivered $740 million in value synergies. The profitable integration of HSBC’s industrial banking capabilities, notably in provide chain and treasury administration, is driving significant cross-sell alternatives with $300 million in income synergies focused.
Credit score high quality stabilized as shopper unsecured lending improved whereas loan-loss provisions moderated after elevated Q2 builds. Administration maintains a conservative method whereas expressing confidence that geopolitical headwinds are manageable given Canada’s resilient financial system and RBC’s prosperous buyer base.
With diversified income streams, premium market positioning, and a number of progress catalysts throughout private banking, wealth administration, and capital markets, RBC seems well-positioned to maintain differentiated returns whereas sustaining its conservative threat profile.
The banking behemoth has elevated its annual dividend per share from $3.24 in fiscal 2016 (resulted in October) to $5.60 in fiscal 2024. Analysts forecast dividends to extend to $7.34 per share in 2028.
