The Motley Fool

RRSP Investors: 3 Cheap Canadian Dividend Stocks to Buy Today

Image source: Getty Images

The Registered Retirement Savings Plan (RRSP) may not be the perfect investment vehicle for every Canadian. But for those with specific long-term goals in mind (saving to buy a home or investing for a comfortable retirement), the RRSP is an invaluable vehicle that can help bring your wealth creation to the next level. In this piece, we’ll have a look at three overly battered Canadian dividend stocks to stash in your RRSP for the long haul.

TC Energy

TC Energy (TSX:TRP)(NYSE:TRP) stock got pummeled 4.6% on Monday on worries that U.S. president-elect Joe Biden could cancel the Keystone XL pipeline. Alberta premier Jason Kenney reportedly contacted Canadian prime minister Justin Trudeau, urging him to discuss the matter with the Biden administration. A potential axing of the Keystone XL project could cost Canada a considerable number of jobs and bring forth further downside in TRP shares, which have already been battered in 2020.

The stock is currently down 29% from its 2020 all-time high and may be worth scooping up for your RRSP on recent weakness for the juicy dividend, even though it seems like the Keystone XL project could find itself up in the air. TRP stock sports a bountiful, safe 6% yield at the time of writing.

The 10 Best Stocks to Buy This Month

Click here to learn more!


Sticking with the pipeline theme, we have shares of Enbridge (TSX:ENB)(NYSE:ENB), which have also been under extreme pressure in recent months. TC Energy’s rough day spread to ENB stock, sending ENB stock nearly 2% lower on a thinly traded Monday for the TSX Index.

At the time of writing, shares of Enbridge are sitting down 22% from 2020 highs and 33% from 2015 all-time highs. As COVID-induced headwinds in the oil patch gradually fade away en route to post-pandemic normalcy, I view ENB stock as an opportunity for contrarians to lock in a swollen dividend yield (currently at 7.6%) alongside a shot at outsized gains over the medium term. And with one of the most shareholder-friendly management teams out there, I don’t see the dividend getting slashed, even if Enbridge’s recent relief rally were to come to another crashing halt.

If you’re willing to hold the name for decades at a time, ENB looks like a deep-value dividend bargain that’s perfect for RRSP investors.

Bank of Montreal

Finally, we have Bank of Montreal (TSX:BMO)(NYSE:BMO), one of my favourite bank stocks for dividend-focused RRSP investors at this juncture. Shares of BMO crumbled during the February-March sell-off, but since bottoming out in March, the stock has not looked back. Shares are up over 62% from their March lows on the back of better-than-feared fourth-quarter results (BMO beat earnings estimates by a whopping 26%) and 2021 recovery hopes.

As we head into the latter part of 2021, BMO stock could have way more room to run as credit expenses shrink and the bank gets right back on the earnings growth track. Sure, a “lower-for-longer” interest rate environment doesn’t bode well for the Big Six Canadian banks over the medium term. But looking beyond 2024, I think that rates will be on the rise again, and the big banks will enjoy their next leg higher after many years of treading water.

If you're looking for opportunities in this uncertain market, I'd encourage you to consider the following:

The 10 Best Stocks to Buy This Month

Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.

Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.

Click Here to Learn More Today!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette owns shares of BANK OF MONTREAL. The Motley Fool owns shares of and recommends Enbridge.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.