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2 Top Canadian Dividend Stocks for RRSP Investors to Buy Now

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RRSP investors are searching for top dividend stocks to add to their self-directed portfolios. The rally off the 2020 market crash makes it harder to find undervalued stocks, but some deals are still available in the TSX Index.

Why Nutrien stock deserves to be in your RRSP

Nutrien (TSX:NTR)(NYSE:NTR) is a global leader in the crop nutrients industry. The company is the planet’s largest producer of potash and a key supplier of nitrogen and phosphate. Nutrien also has a retail division that supplies global growers with seed and crop protection products.

Strong crop prices in the past year drove up profits for farmers, giving them more confidence to plant additional acres and spend more on crop nutrients. Nutrien expects farmers in the U.S. alone to plant an additional 10 million acres in 2021.

Nutrien provided earnings guidance of US$2.05 – 2.75 per share for 2021 and EBITDA guidance of US$4 – 4.5 billion. That’s up from EBITDA of US$3.67 billion in 2020.

The board raised the dividend for 2021 and announced a new share repurchase plan that will see the company buy back up to 5% of the outstanding stock. Investors who buy Nutrien at the current share price near $67.50 can pick up a 3.4% yield.

The stock price recently dipped on news that the CEO will leave to pursue other opportunities. The new CEO is the former chairman, so there should be no issues with transition.

The stock appears cheap for a buy-and-hold RRSP dividend fund. Population growth and expanding global middle class wealth should support strong crop demand in the coming years to feed people and the animals they want to eat.

A steady rise in the share price to $100 wouldn’t be a surprise by the end of next year.

TC Energy

TC Energy (TSX:TRP)(NYSE:TR) is a major player in the North American energy infrastructure industry with assets in Canada, the United States, and Mexico.

The company took a hit when Joe Biden cancelled the Keystone XL project, but TC Energy has a strong portfolio of developments lined up to boost revenue and cash flow for years. In fact, the $20 billion capital program should support annual dividend hikes of 5-7% over the medium term.

The company’s assets position TC Energy to play a key role in the growth of the LNG sector in the United States. TC Energy’s vast natural gas transmission network continued to perform well last year. The company also has power generation assets that provide steady revenue streams. TC Energy is expected to grow the renewable energy assets with investments in wind energy to provide power to the pipeline systems.

The stock trades near $60 compared to $75 before the pandemic. Dividend investors can pick up a 5.8% yield at the current price with decent dividend growth on the horizon.

The bottom line on RRSP dividend stocks

Nutrien and TC Energy are leaders in their respective industries. The stocks appear cheap right now in an expensive market and should deliver steady dividend growth for years.

If you have some cash available in your RRSP these stocks deserve to be on your radar for a self-directed pension fund.

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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.

The Motley Fool recommends Nutrien Ltd. Fool contributor Andrew Walker owns shares of Nutrien and TC Energy.

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