1 No-Brainer Dividend Stock to Buy on the Dip

If you are looking for a high-quality dividend stock on sale, Thomson Reuters (TSX:TRI) is worth a serious look right now. The Canadian stock has fallen 51% from its all-time high, pushing the dividend yield up to 2.5%. That is a rare deal on a company with a 33-year streak of consecutive annual dividend increases.

Let’s see why the TSX dividend stock stands out and recent pullback may be the opportunity long-term investors have been waiting for.

Thomson Reuters has built a durable AI moat

Much of the recent weakness in the share price has been driven by fears that artificial intelligence (AI) will commoditize legal and tax research. The concern is understandable. But it misses what makes TRI fundamentally different.

Thomson Reuters CEO Steve Hasker addressed this directly on the company’s Q4 earnings call. He argued that general-purpose AI models cannot meet the standards required for professional legal and tax work. Attorneys and accountants need accuracy, data privacy, and accountability, none of which a generic AI tool can reliably deliver.

TRI’s edge comes from two things that take decades to build.

• First, it owns proprietary legal content spanning centuries in some jurisdictions. This content was curated by thousands of attorney editors who organized, categorized, and interpreted case law in ways that raw court records simply do not capture.
• Second, those same editors have been retrained to teach the company’s AI agents how to behave like world-class legal practitioners.

The result? Westlaw Advantage, TRI’s flagship agentic legal research product, launched in August 2025, is already resetting the standard in legal research, according to Hasker. Early sales and customer feedback suggest it has no equal in the market.

A strong performance in Q4

For full-year 2025, Thomson Reuters grew organic revenue by 7%, with its “Big 3” segments, Legal Professionals, Corporates, and Tax, Audit & Accounting Professionals, growing at 9%.

The Adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) margin expanded by 100 basis points to 39.2%, while free cash flow came in at $2 billion, slightly ahead of guidance.

Looking ahead, management is guiding for 7.5% to 8% organic revenue growth in 2026, with the Big 3 expected to grow at roughly 9.5%. TRI expects 100 basis points of EBITDA margin expansion not just in 2026, but also in 2027 and 2028. That kind of multi-year margin visibility is rare and signals management’s confidence in AI-driven productivity initiatives.

Thomson Reuters raised its annual dividend by 10% in February 2026 to $2.62 per share. It was the fifth consecutive time that TRI raised the dividend by at least 10%.

The TSX dividend stock also completed a $1 billion share buyback program and has an estimated $11 billion of capital capacity to deploy through 2028.

The bottom line

Analysts tracking TRI stock forecast adjusted earnings to grow from $3.92 per share in 2025 to $6.92 per share in 2030. If the TSX stock is priced at 23.5 times forward earnings (similar to its current multiple), it could gain 60% from current levels over the next four years. If we adjust for dividends, cumulative returns could be closer to 75%.

When a high-quality, dividend-growing business falls 51% from its highs, it pays to ask why. In TRI’s case, the fear is AI disruption. But when you dig into the actual products, content moats, and financials, the picture looks very different.

For dividend investors with a multi-year horizon, TRI  stock looks like a no-brainer buy on this dip.

The post 1 No-Brainer Dividend Stock to Buy on the Dip appeared first on The Motley Fool Canada.

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Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Thomson Reuters. The Motley Fool has a disclosure policy.