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3 Top Canadian Dividend Stocks to Buy in March 2021 for Your TFSA

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If you have a Tax-Free Savings Account (TFSA), you’ll know all about the contribution limit. That limit grows each year on January 1, and as of 2021, there is a maximum contribution room of $75,500. While that’s a lot of money, it’s true that some of us are able to reach the limit.

If you take out money and then put some back in, you may have reached your limit. Or if you’ve added each year, then it’s fairly easy to reach the limit. So, what can you do to add more cash? Add dividend stocks, of course!

But the key is to find strong stocks with sustainable dividend yields. That means finding Canadian stocks that have solid, growing cash flows and can support dividend growth. The more cash flow, the more dividends, and likely the higher the share price will climb. So, here are three top dividend stocks to consider.

The rebound

As oil and gas continues to rebound, you’ll want to get in on the action. But while there are plenty of oil and gas stocks, pipelines are the ones that will be shipping the product across North America and from coasts to around the world. Enbridge (TSX:ENB)(NYSE:ENB) is therefore the perfect stock to think about adding to your watchlist. It pays a hefty 7.35% dividend yield as of writing from operating one of the largest pipelines in North America.

Enbridge stock is already supported by long-term contracts that will see cash flow for decades. But the company is also well ahead of other pipelines in getting its growth projects built. So, investors can look forward to even more cash and dividend growth in the years and decades to come. The company has paid out dividends for over 66 years, and last year it announced a 3% increases in dividends per share for 2021. Yet all this good news and the company still has a P/B ratio of 1.7, making it an undervalued stock. Shares are up 14% in the last year, but with plenty of room to grow towards all-time highs near $60 per share.

The bank

If there’s one type of stock everyone should have in their TFSA portfolio, it’s bank stocks. These stocks are especially great to buy right now, as the recovery comes from the COVID-19 pandemic. Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is a great stock to play if you want stable growth in shares but also solid dividends. It’s tied for first as the largest bank by market capitalization, but it has the most room to grow.

The company already has massive exposure in the United States. You may have heard is closed up several locations, but that’s because it wants to focus more on online resources — a strong move for the future of banking. Yet again, it has a P/B ratio of 1.6, even with shares at all-time highs. Shares are up 40% in the last year, with a solid 4.11% dividend yield that recently increase for 2021 by about 3%. So, if you want a solid stock during a recovery, this is one you should seriously consider.

The dip

There is pretty much no good reason why Fortis (TSX:FTS)(NYSE:FTS) fell the way it did and has yet to completely bounce back. Shares are only up about 4% in the last year, yet that’s as the company continues to produce stellar revenue and returns. Fortis’s growth-through-acquisition strategy has worked for decades, and is why the company will become a Dividend King in 2022 — the first in TSX history.

Today, investors have an opportunity of a jumping-in point during the pullback for a strong long-term hold. The company has a cheap 1.4 P/B ratio, an EV/EBITDA of 12.7, and a 4.15% dividend yield investors can consider. That means you’ll be buying a cheap stock with a high dividend to lock in for years to come. And shares may be down now, but in the last two decades, the CAGR hit 13%. That’s stable growth any one can get behind.

Want even more options for HIGH-GROWTH stocks? Check out this FREE list of three!

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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 Amy Legate-Wolfe owns shares of ENBRIDGE INC and TORONTO-DOMINION BANK. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends FORTIS INC.

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