Canadian dividend stocks in the service sector are positioned to sustain growth despite ongoing uncertainties surrounding U.S. tariffs, according to recent analyses by several financial experts. The shift reflects a broader trend favoring companies with significant U.S. operations that provide services, which generally face less tariff risk than producers of physical goods.

Following the July 1 deadline for renewing the trade agreement among Canada, Mexico, and the United States, the U.S. declined to formally extend the pact for the next 16 years. Instead, officials from Canada and Mexico expressed a willingness to continue the agreement, which is expected to remain effective through 2036 with annual reviews. Analysts note that while this process is unlikely to introduce new tariffs immediately, the U.S. government retains the ability to impose tariffs through other legal avenues.

Against this backdrop, analysts recommend focusing on Canadian service providers with strong dividend sustainability and meaningful exposure to the U.S. market. Such companies tend to navigate tariff tensions more effectively due to the nature of their offerings.

National Bank Financial analyst Cameron Doerksen views Exchange Income Corp. positively ahead of its second-quarter earnings, citing multiple growth avenues and a “constructive” outlook. Doerksen recently increased his price target on the stock from CAD 125 to CAD 144 and maintained his outperform rating. Similarly, Desjardins Securities analyst Benoit Poirier highlighted improved macroeconomic conditions supporting Canadian railway companies, raising his target for Canadian National Railway Co. to CAD 185 from CAD 163 amid expectations of stronger freight volumes.

Meanwhile, Citi analyst Ariel Rosa anticipates strong second-quarter results for North American transportation companies but cautions that further gains may be limited, adjusting his target for TFI International Inc. slightly downward. RBC Dominion Securities and Stifel analysts also raised their targets for Canadian trucking and food sector companies, respectively, reflecting improving industrial volumes and a generally favorable outlook despite recent revisions to revenue forecasts.

A focused evaluation using the TSI Dividend Sustainability Rating System identified six Canadian service firms with resilient dividend profiles and substantial U.S. revenue streams. These include Thomson Reuters Corp., which received the highest sustainability rating with 10 points and generates about 72% of its revenue in the United States. Other companies scoring highly are Stantec Inc., Alimentation Couche-Tard Inc., FirstService Corp., Colliers International Group Inc., and AtkinsRéalis Group Inc., all of which derive between 21% and 90% of their revenue from the U.S.

The assessment model incorporates factors such as dividend history, management commitment, industry cyclicality, exposure to foreign currency and political risks, financial strength, and leadership position within the industry. Thomson Reuters leads the group with a 2.8% dividend yield and a market capitalization exceeding CAD 56 billion. Although several companies have experienced share price volatility over the past year, many maintain above-average sustainability scores and prospects for steady dividend payments.

Overall, analysts and investors are advised to prioritize Canadian service-sector dividend stocks with strong U.S. market ties. These companies are seen as better equipped to withstand tariff-related disruptions, ensuring more stable returns amid evolving trade conditions between Canada and the United States.