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TFSA Investors: 2 Dividend Stocks to Buy in November

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Canadians are searching for top dividend stocks to add to their TFSA portfolios.

Some people use the TFSA to generate additional income, while others take advantage of the vehicle’s tax-free status to reinvest the full value of their dividends in new shares to build a retirement fund.

Regardless of the strategy, owning top quality dividend-growth stocks is a great way to maximize the benefits of the TFSA.

Let’s take a look Toronto-Dominion Bank (TSX:TD)(NYSE:TD) and Suncor Energy Inc. (TSX:SU)(NYSE:SU) to see why they might be interesting picks.

TD

TD generated close to $2.8 billion in profits for fiscal Q3 2017. That’s not too shabby for three months of work.

The bank is primarily known for its Canadian business, but TD also has a significant presence in the United States. In fact, TD operates more branches south of the border than it does in the home country.

Rising interest rates have some investors concerned the banks might be at risk due to their Canadian residential mortgage exposure. TD has a large mortgage loan book, but the portfolio is more than capable of riding out a downturn in the housing market.

Higher rates tend to a be a net benefit for the banks, and TD’s U.S. business provides a nice hedge against potential weakness in Canada.

The company expects to see earnings-per-share growth of at least 7% per year over the medium term, and that should provide support for additional dividend increases. TD’s dividend has a compound annual growth rate of 10% over the past 20 years.

At the time of writing, the distribution provides a yield of 3.3%.

Suncor

Suncor isn’t often viewed as a dividend stock, but the company has a strong track record of dividend growth and offers a yield of 3%.

The company has weathered the oil rout in good shape, adding strategic assets at attractive prices while reducing costs and increasing production. That trend is expected to continue as two major projects, Fort Hills and Hebron, are scheduled to begin commercial production by the end of 2017.

Suncor’s largest business segment is its oil sands operations, but the company also owns four refineries and more than 1,500 Petro-Canada retail locations. The downstream operations are a big reason Suncor continues to deliver solid results, despite the downturn in the oil sector.

WTI oil is holding its recent gains, and some pundits are calling for higher prices heading into next year and beyond.

If you are an oil bull, Suncor is a great way to benefit from a recovery in the oil sector, while enjoying stability during the dips.

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Fool contributor Andrew Walker has no position in any stock mentioned.

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