Investors often overlook valuable opportunities in the Canadian market by focusing solely on banks. Here are three lesser-known TSX dividend stocks that deserve attention.
1. Freehold Royalties (TSX: FRU)
Freehold Royalties operates on a unique model by owning royalty interests on oil and gas lands in Canada and the U.S. This approach allows the company to earn cash flow without incurring heavy drilling costs.
In 2025, Freehold announced a fifth consecutive year of record production, driven by growth in the Permian region. This momentum continued into 2026, with guidance for average production between 14,800 and 15,800 barrels of oil equivalent per day.
Financial Highlights
- Revenue: $299.8 million in 2025
- Operating Income: $218.6 million
- Funds from Operations (FFO): $243.8 million, or $1.61 per share
- Dividends Returned: $162.1 million
- Market Cap: Approximately $2.9 billion
- Price-to-Earnings (P/E) Ratio: ~31
This valuation is reasonable for a royalty company, especially since it offers a lower capital intensity and attractive yield.
2. Plaza Retail REIT (TSX: PLZ.UN)
Plaza Retail focuses on open-air retail properties in smaller Canadian markets. Its tenant roster primarily includes necessity-based businesses, making it less susceptible to economic volatility.
In 2025, Plaza maintained a consistent monthly distribution with a payout of $0.02333 per unit, amounting to $0.28 annually. The financial results indicate solid growth in a typically stable sector.
Financial Performance
- FFO: Increased by 8.8% to $44 million
- FFO per Unit: Rose to $0.395 from $0.363
- Adjusted FFO (AFFO) per Unit: Increased to $0.300 from $0.286
- Basic FFO Payout Ratio: Improved to 71% from 77.2%
- Market Cap: About $481.5 million
- Trailing P/E: Approximately 8.7
This low P/E ratio, combined with a necessity-driven portfolio, makes Plaza an attractive investment option.
3. Fairfax Financial (TSX: FFH)
Fairfax Financial is a prominent player in the insurance and investment sectors. Despite its size, it often remains underappreciated compared to traditional banks.
In 2025, Fairfax reported net earnings of USD 4.8 billion, marking an increase from USD 3.9 billion in 2024. This growth reflects a diversified business model that some investors may overlook.
Valuation Insights
- Market Cap: Just above USD 51.7 billion
- P/E Ratio: Approximately 8.2
The modest valuation paired with substantial earnings positions Fairfax as an intriguing investment, especially for those willing to explore beyond conventional banking stocks.
Conclusion
While Canadian banks are reliable, they aren’t the only options available. Freehold Royalties offers unique income through its royalty model, Plaza Retail REIT provides steady cash flow, and Fairfax Financial boasts impressive earnings in the insurance sector. These three dividend stocks deserve a place in any Canadian investment strategy.
