Retirees: 2 Top TSX Dividend Stocks to Buy in November

It is still possible to get yields of 5-6% from quality income stocks.

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Canadian seniors are searching for top TSX dividend stocks to add to their TFSA portfolios focused on passive income.

Pembina Pipeline

Pembina Pipeline (TSX:PPL)(NYSE:PBA) has been around for 65 years. The company serves the Canadian oil and gas industry with end-to-end services that pipeline operations, logistics, natural gas gathering and processing, and gas liquids exports.

The rebound in the energy sector and soaring commodities prices bode well for Pembina Pipeline across its asset base. As the recovery continues, Pembina is expected to ramp up growth initiatives. Management has a track record of aggressively pursuing strategic deals to drive growth, while also being open to partnerships when opportunities arise.

Pembina Pipeline has roughly $5 billion in capital projects on the go or under consideration and is restarting projects that it paused or delayed in 2020. For example, a decision on the Prince Rupert Terminal Expansion is expected early next year. The facility, which went into operation earlier this year, exports liquified propane gas to international markets. Propane prices soared this year, and demand remains robust around the globe.

The dividend looks safe and could actually increase in 2022 if Pembina makes a strategic acquisition or initiates additional capital projects. Investors currently receive a monthly distribution of $0.21 per share. That’s good for an annualized yield of 6.2%.

The stock rallied significantly off the 2020 lows but still trades below the pre-pandemic level. At the time of writing, investors can buy the stock for less than $41 per share. It was $53 in February 2020.

TC Energy

TC Energy (TSX:TRP)(NYSE:TRP) trades near $67 per share at the time of writing. The stock is up 28% in 2021, but more gains should be on the way in 2022.

TC Energy is working on a $21 billion capital program that will put new assets into operation in the next few years. This should boost revenue and cash flow enough to support steady dividend increases. The company has a good track record of raising the distribution, and investors should see annual hikes of at least 5% over the medium term.

TC Energy’s diversified revenue stream helped it get through 2020 in good shape. The natural gas transmission and gas storage assets, along with the power-generation facilities, helped offset the weakness in the oil pipelines. TC Energy’s core operations focus on the natural gas industry, and this segment of the energy market performed well last year. The rebound in oil and natural gas that has occurred in 2021 is expected to continue through 2022 and beyond.

TC Energy currently offers a dividend yield of 5.2%. The stock traded at $75 before the pandemic, so there is decent upside potential from the current level. Natural gas demand is expected to remain robust in the coming years, as countries switch to the fuel from oil and coal to generate power while they expand their renewables investments.

The bottom line on top TFSA stocks for passive income

Pembina Pipeline and TC Energy pay attractive dividends for retirees who want to boost investment yields in their TFSA portfolios. The distributions should grow in the coming years, and the stock prices still appear reasonable.

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 PEMBINA PIPELINE CORPORATION. Fool contributor Andrew Walker owns shares of Pembina Pipeline and TC Energy.

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