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

3 colorful arrows racing straight up on a black background.
Dividend Stocks

TSX Touching All-Time Highs? These ETFs Could Be a Good Alternative

If you're worried about buying the top, consider low-volatility or value ETFs instead.

Read more »

Investor reading the newspaper
Dividend Stocks

Your First Canadian Stocks: How New Investors Can Start Strong in January

New investors can start investing in solid dividend stocks to help fund and grow their portfolios.

Read more »

Piggy bank on a flying rocket
Dividend Stocks

1 Canadian Dividend Stock Down 37% to Buy and Hold Forever

Since 2021, this Canadian dividend stock has raised its annual dividend by 121%. It is well-positioned to sustain and grow…

Read more »

ETFs can contain investments such as stocks
Dividend Stocks

The 10% Monthly Income ETF That Canadians Should Know About

Hamilton Enhanced Canadian Covered Call ETF (TSX:HDIV) is a very interesting ETF for monthly income investors.

Read more »

senior couple looks at investing statements
Dividend Stocks

BNS vs Enbridge: Better Stock for Retirees?

Let’s assess BNS and Enbridge to determine a better buy for retirees.

Read more »

four people hold happy emoji masks
Dividend Stocks

3 Safe Dividend Stocks to Own in Any Market

Are you worried about a potential market correction? You can hold these three quality dividend stocks and sleep easy at…

Read more »

Canadian dollars in a magnifying glass
Dividend Stocks

This 9% Dividend Stock Is My Top Pick for Immediate Income

Telus stock has rallied more than 6% as the company highlights its plans to reduce debt and further align with…

Read more »

chatting concept
Dividend Stocks

BCE vs. Telus: Which TSX Dividend Stock Is a Better Buy in 2026?

Down almost 50% from all-time highs, Telus and BCE are two TSX telecom stocks that offer you a tasty dividend…

Read more »