Beat The TSX With These Cash-Gushing Dividend Stocks

These are uncertain times. In the last five years, some dividend stocks have slashed dividends due to huge debt, while others have provided capital growth through business expansion. This raises questions about the safety of investing in dividend stocks. To know which stock to buy, follow the cash flow.

Cash-gushing dividend stocks

Free cash flow (FCF) is the cash left after paying debt and reinvesting capital in the business. In the case of REITs, look for adjusted funds from operations (AFFO), as their trust structure makes it mandatory to distribute most of their earnings. I followed the cash trail and found some interesting dividend stocks that are gushing with cash.

Capital Power stock

Capital Power (TSX:CPX) is experiencing significant growth due to the increasing demand for gas-fired power plants from artificial intelligence (AI) data centres. The company acquires, develops, and maintains power plants. It is a key beneficiary of the coal-to-gas conversion.

The company’s AFFO increased 10.6% year-over-year in the first nine months of 2025. Its dividend payout ratio stood at 36%, well within the guided range of 30–50%. It has increased its dividend by 6% for the June 2025 to July 2026 period. However, management is guiding 2–4% dividend growth through 2030 as it allocates more capital in building natural gas power plants.

Now is a good time to buy the stock and lock in a 4.3% dividend yield, the 2026–2027 dividend growth, and an AI-driven share price rally.

CT REIT

Canada’s real estate sector saw a recovery in 2025 as the government allocated a budget to build new houses. Most REITs saw a recovery, including CT REIT (TSX:CRT.UN). It is now trading near its 2022 high and is well-placed to grow its dividend by 3% in July.

As the real estate investment trust of Canadian Tire, it acquires, develops, and intensifies stores for its parent. It brings new properties online and collects a 1.5% higher rent. Since its parent is its largest tenant, occupying more than 90% leasable area, occupancy is never an issue.

In 2025, the REIT’s AFFO increased by 3.7%, and distribution increased by 2.8%. The REIT doesn’t have a significant mortgage or construction loan. Most of its debt is debentures. This whole arrangement makes CT REIT a stock to buy and keep accumulating for an inflation-beating monthly passive income in all economic conditions.

Lundin Gold

Lundin Gold (TSX:LUG) is a cash-gushing stock for all good reasons. The gold miner has been rallying on rising gold prices. Gold prices are likely to stay elevated amidst the global supply chain shift and growing geopolitical uncertainties. Any major developments around global trade, war, or supply shocks could drive the gold price to new highs.

Lundin Gold’s 2025 guidance assumed a gold price of US$2,500 per ounce, but it realized an average gold price of US$3,594 per ounce. The higher gold price helped Lundin report a record free cash flow of US$926 million, thanks to its low all-in sustaining costs (AISC) of $1,015 per ounce.

The company shared its high cash flow with shareholders by distributing a variable quarterly dividend of $0.85 per share. The gold price is currently hovering in the range of US$5,230–US$5,250 per ounce. Considering that gold prices will remain elevated, Lundin could keep paying higher variable dividends.

The post Beat The TSX With These Cash-Gushing Dividend Stocks appeared first on The Motley Fool Canada.

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More reading

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• Forget GICs! These Dividend Stocks Are a Far Better Buy
• Take Full Advantage of Your TFSA With These Top Stocks for 2026

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Capital Power. The Motley Fool has a disclosure policy.