5 Top TSX Dividend Stocks With Upside Potential in 2021

Stocks such as Enbrigde (TSX:ENB)(NYSE:ENB) and four other key names could bring both defensiveness and growth in the new year.

All-weather stocks can be fairly hard to spot. Some offer moderate upside and some offer protection on the downside. These kinds of characteristics are rare to find under one roof. But today, we will take a quick look at five such stocks that trade on the TSX. From wide economic moats to recovery potential, these names pack passive income, share price growth, and defensive qualities.

Mixing growth with defensive properties

Green power investing has been given a boost by the imminent change of faces at the White House. The increasingly divisive U.S. political scene is serving up a broadly conservative outlook shot through with some progressive upside. Dividend yields could be richer, but it’s still relatively early days yet for green power. For instance, investors can choose between AQN’s 4% yield and Northland Power’s yield of 2.7%.

Speaking of renewables, does anybody have Enbridge on their 2021 growth stock bingo card? Because Enbridge could potentially see as much as 50% annual earnings growth over the next one to three years. And yes, Enbridge does also satisfy a green power investing strategy to a degree. By packing a wide economic moat with diversifying green power credentials, Enbridge can appeal to a vast swathe of investor types.

Other household names could also see big upside in 2021 as well. Manulife Financial could come back stronger in the second half of next year. This kind of time frame fits with a generally expected beginning of an economic recovery. The pandemic has been hard on financials in general. But insurance has had an especially rough ride in 2020. The recovery thesis therefore sees names such as Manulife emerging with some growth ahead.

Mixing the comeback potential of Manulife with Enbridge’s defensive market domination, investors have a strong one-two punch in terms of dividend strength. The insurer’s yield of 4.8% is backed up with below-book value and thus the promise of capital appreciation. Team this with Enbridge’s rich yield of 7.8% and shareholders have a winning combination well placed for a recovery market. This play matches passive income with capital gains plus recovery upside.

The steady-rolling rail stock

Year on year, CN Rail shares have appreciated by an impressive 16.8%. That’s not bad, considering that this stock is so closely tied to the Canadian economy itself. In fact, any growth in this tightly controlled space is testament to a canny management style. CN Rail has quickly acclimated to the changing needs of mid-pandemic Canada. This stock also ticks the box for investors eyeing a more positive North American trade environment than the last four years have brought.

In summary, though, any coming bull market won’t just be driven by progressive trends. It’s also going to be driven by a touch of relief — relief that those proposed big corporate tax cuts likely won’t get past the Senate. So, on the one hand, the green power and pot stock momentum has been given a boost. While on the other, corporate considerations are still being met. In short, once the pandemic eases, a truly unique bull market could emerge.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Canadian National Railway and Enbridge. The Motley Fool recommends Canadian National Railway.

More on Dividend Stocks

Retirees sip their morning coffee outside.
Tech Stocks

2 Technology Stocks With the Kind of Potential That Could Make Millionaires

Two tech stocks with impressive growth trajectories amid elevated volatility are potential millionaire-makers.

Read more »

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Why the Market May Be too Quick to Write Off These Railway and Telecom Stocks

Discover why the railway and telecom markets are experiencing significant declines and what it means for investors and value growth.

Read more »

a man celebrates his good fortune with a disco ball and confetti
Dividend Stocks

Where Will Enbridge Stock Be in 3 Years?

Enbridge stock has raised its dividend for 31 straight years. With a $39B project backlog and 5% growth ahead, here's…

Read more »

A plant grows from coins.
Dividend Stocks

2 Canadian Dividend Stocks Yielding 4% That Appear to Have the Goods to Back It Up

These Canadian dividend stocks are dependable investments, offer attractive yield of over 4%, and are backed by solid businesses.

Read more »

Lights glow in a cityscape at night.
Dividend Stocks

2 Dividend Stocks I’d Buy Today and Feel Good Holding for at Least 5 Years

Want dividend income that will last for the five years to come? These two dividend stocks are leaders in Canada.

Read more »

Investor reading the newspaper
Dividend Stocks

A 3.9% Dividend Stock That Looks Safer Than It Seems

Transcontinental just reshaped its business with a $2.1 billion sale, and that cash could make its dividend look safer than…

Read more »

Canadian investor contemplating U.S. stocks with multiple doors to choose from.
Dividend Stocks

BCE vs. Telus: Which Telecom Belongs in Your TFSA?

Although Telus, the telecom giant, offers a 10.3% dividend yield compared to BCE's 5.3% yield, is it still the better…

Read more »

A worker overlooks an oil refinery plant.
Dividend Stocks

What is Considered a Good Dividend Stock? 2 Infrastructure Stocks That Fit the Bill

Here's how you can be sure the dividend stocks you buy and hold for the long haul are some of…

Read more »