2 Top Canadian Stocks to Buy if Rates Stay Higher for Longer

2026-04-23 21:00:00 ET

When rates stay higher for longer, investors should look for dividend stocks that can still earn well in a more expensive money environment. That usually means lenders with disciplined underwriting, solid capital, and business models that do not fall apart when borrowing costs stay elevated. A big yield alone doesn’t cut it. You want income backed by earnings, balance-sheet strength, and a business that can turn stubborn rates into an advantage instead of a headache. So let’s look at a few to consider on the TSX today.

MKP

MCAN Mortgage ( TSX:MKP ) is a Canadian mortgage investment corporation focused on residential and commercial lending, with added earnings support from its stake in MCAP. Over the last year, it kept pushing growth in its core mortgage platform, launched an uninsured residential mortgage securitization program, renewed its at-the-market program in August 2025, and strengthened its leadership team in January 2026. That makes it relevant when the market still feels rate-sensitive.

The latest earnings were steady, which is exactly what you want from a higher-rate dividend pick. For 2025, net income slipped 3% to $74.9 million and earnings per share (EPS) came in at $1.89, while return on equity stayed healthy at 12.1%. In the fourth quarter, net income jumped 128% year over year to $17.6 million, book value per share reached $15.93, and assets under management climbed 30% to $7.8 billion. The company also raised its quarterly dividend by 5% to $0.43 per share.

The valuation still looks reasonable. The dividend stock trades around a trailing price-to-earnings (P/E) of 13 and a dividend yield just under 7%. That’s a fair price for a lender still growing assets and protecting profitability in a mixed rate backdrop. If rates stay higher for longer, MCAN could keep benefiting from stronger spreads than it would in a fast-cut cycle. The main risk is that credit losses could rise if the economy weakens, but management has kept stressing resilient credit quality and strong underwriting. That makes this dividend stock look like a solid income-and-value play for 2026.

FC

Firm Capital Mortgage Investment ( TSX:FC ) is a niche non-bank lender focused on short-term bridge, conventional real estate, construction, and mezzanine financing in areas larger lenders often avoid. Over the last year, it redeemed its 5.4% convertible debentures early, kept rolling its mortgage book into new opportunities, and paid a special dividend that brought its 2025 total payout to $1.02 per share. That tells you management still saw enough income coming in to reward shareholders beyond the regular monthly cheque.

Its latest numbers were respectable. In Q4 2025, net income fell 4.7% year over year to $8.7 million, but for the full year, the dividend stock earned enough to support both its regular monthly payout and that extra top-up. Earlier in 2025, Q3 net income rose 1.4% to $9.1 million and nine-month net income rose 10.3% to $28.7 million. The portfolio also stayed active, and management has highlighted its short-duration structure and floating-rate exposure as core strengths.

By September 2025, 33.7% of the mortgage portfolio was maturing by year-end and another 56.3% by the end of 2026, giving Firm Capital room to keep repricing and recycling capital. The dividend stock trades at about 12 times trailing earnings with a yield around 7.7%. This is not a risk-free lender, since real estate credit always needs watching, but the short-term, floating-rate nature of the book makes it one of the cleaner ways to play sticky rates.

Bottom line

If rates stay higher for longer, both of these dividend stocks look built to handle it. MCAN offers a bigger, more diversified lending platform with strong capital and a generous yield, while Firm Capital brings a niche mortgage book that can keep adjusting as loans roll over. Both can create immense income from even $7,000 in each.

Neither is perfect, but both have the kind of earnings power and dividend support that can look especially attractive when cheap money does not come rushing back.

The post 2 Top Canadian Stocks to Buy if Rates Stay Higher for Longer appeared first on The Motley Fool Canada .

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

2026