Some of the best dividend-paying stocks trade on the TSX. And if you are looking to build a portfolio of stable dividend payers, you cannot miss out on Capital Power (TSX:CPX). In the swiftly evolving landscape where artificial intelligence (AI) is poised to dominate, electricity and the internet will become indispensable utilities. If you’re seeking to future-proof your investments, Capital Power offers a stable bet on dividends and long-term growth.
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Why capital power is a compelling dividend stock for the next AI boom
Capital Power acquires, develops, and operates natural gas and solar power plants. It sells electricity through long-term supply contracts, which give visibility around future cash flows. It also earns incremental profit from trading natural gas, electricity, and carbon credits.
In 2025, Capital Power completed a $3 billion acquisition, which increased its natural gas-fired capacity by 2.2 gigawatts. It is eyeing the AI data centre market and has signed a memorandum of understanding with data centres to build power plants for them. It started 2026 with 11.8 GW capacity and has 25 GW of projects in the pipeline, of which over 16GW is from mergers and acquisitions.
Capitalizing on AI growth
In 2025, Capital Power’s net income fell 77% because of huge depreciation from rapid expansion. However, it expects to grow its cash flow at a compounded annual growth rate (CAGR) of 8–10% through 2030 by adding new power plants, contracting and trading electricity, and securing enterprise funding. It is looking to grow its return on equity from 9–13% in 2025 to 13–15% by 2030 and dividend by 2–4%.
Capital Power is tapping the high-growth market of natural gas-fired power plants that cater to AI data centres in the United States. This opportunity saw Capital Power’s share price rally 90% and 60% in two growth cycles in the last two years. More such growth cycles are likely in the next five years as more AI data centres begin operations. And the plants powering these data centres could become strong dividend payers of the future.
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How many shares of Capital Power should you own to get $1,000 in dividends?
Capital Power has a history of growing dividends at a CAGR of 6% in the last 12 years. This dividend growth could slow in the next five years, but could grow later as more power plants come online. The stock is giving a 4.6% yield.
If your target is to earn $1,000 in annual dividends in 2026, you would need 362 shares of Capital Power, which would require an investment of $21,900 at the current market price of $60.40 per share. However, you can get a similar dividend by buying only 300 shares for $18,156. You only have to wait for four years, letting your dividend compound in Capital Power’s dividend reinvestment plan (DRIP).
Here is a rough forecast of how your money can grow under Capital Power’s DRIP. If you buy 300 shares now, you can get $829 in annual dividends. DRIP will reinvest this dividend to buy more income-generating shares. I expect the share price to grow to $70 in the AI boom, and Capital Power to grow dividends by 2% till 2028, and 4% from then onwards.
The 2026 dividends will buy you 12.8 DRIP shares, which will generate $882 in annual dividends in 2027. In four years, an increasing share count and growing dividend per share could help you reach $1,000 in annual dividends by 2029.
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