What are we looking for?
Sustainable dividends from companies successfully using large acquisitions to enhance their market position.
The screen
Shares of Cenovus Energy Inc. CVE-T have moved up since the company announced a takeover bid for rival MEG Energy Corp. MEG-T in August. Its move this week to increase that offer ultimately carried the stock even higher after an initial dip on the news.
MEG should be a good fit for Cenovus given it holds an oil sands property near Cenovus’s operations at Christina Lake in Northern Alberta. The proximity would let the merged company pare back costs while boosting cash flow.
Cenovus sweetens takeover bid for MEG Energy to $8.6-billion
Our analysts at The Successful Investor point out that growth by acquisition often adds risk. Still, top companies can cut that risk by targeting smaller purchases or – as in Cenovus’s case – by buying proven assets that complement their existing operations.
Our search started with U.S. and Canadian companies that have recently made major acquisitions to expand their operations and to spur profitability. We then applied our TSI Dividend Sustainability Rating System to those also offering shareholder dividends. Our system awards points to a stock based on key factors:
- 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
- One point for five years of continuous dividend payments
- Two points for more than five years of continuous dividend payments
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.
More about TSI Network
TSI Network is the online home of The Successful Investor Inc. – the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor, and the TSI Dividend Advisor. TSI Network is also affiliated with Successful Investor Wealth Management.
What we found
Our TSI Dividend Sustainability Rating System generated seven stocks.
Calgary’s Cenovus Energy is one of Canada’s largest producers of oil and natural gas and is set to gain if it successfully acquires Meg Energy.
Stryker Corp. SYK-N, based in Michigan, is one of the world’s leading medical technology companies. The firm completed the acquisition of Inari Medical in February, 2025, for US$4.9-billion. Inari’s innovative products should integrate well with Stryker’s neurovascular business.
Motorola Solutions Inc. MSI-N, headquartered in Chicago, makes communications equipment such as two-way radios for police and fire vehicles, as well as high-definition surveillance systems. In August, 2025, Motorola bought Silvus Technologies Inc. for US$4.4-billion (plus a further US$600-million contingent on future performance). That company will complement Motorola’s product lineup with its specialized communications equipment for military and law enforcement clients.
Based in Calgary, Keyera Corp. KEY-T engages in the gathering and processing of natural gas; plus the transportation, storage and marketing of natural gas liquids (NGLs) in Canada and the U.S. In June, 2025, the company agreed to acquire the Canadian NGL business of Plains All American Pipeline LP and other assets for US$5.15-billion. The deal should bolster Keyera’s scale and widen its reach into Eastern Canada.
Eaton Corp. PLC ETN-N, headquartered in Ireland, is a power management company. It serves many markets: data centre, utility, industrial, commercial, machine-building, residential, aerospace and mobility. In June, 2025, it agreed to acquire Ultra PCS Ltd., a Britain-based provider of electronic controls, pneumatic systems and data-processing products for global aerospace customers. Eaton paid US$1.55-billion.
Baltimore, Md.-based Constellation Energy Corp. CEG-Q is the largest producer of emissions-free energy in the United States. Constellation is now buying Calpine Corp. for US$16.4-billion. Calpine owns and operates a collection of natural gas, geothermal, battery storage and solar assets. The merger creates the largest clean energy provider in the U.S. It opens opportunities for Constellation to serve more customers, coast-to-coast, with an expanded array of energy products. (Note: Constellation’s meagre dividend yield reflects this year’s strong share price growth.)
Baker Hughes Co. BKR-Q, headquartered in Houston, Tex., is an energy technology company serving customers worldwide. It is now purchasing Chart Industries for US$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 liquefied natural gas market – one of the fastest-growing areas in energy.
We advise investors to do additional research on investments we identify here.
Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.