2 Great TSX Stocks to Start a TFSA Retirement Fund During a Market Correction

These top TSX dividend stocks look cheap right now to buy for a TFSA retirement portfolio focused on passive income and total returns.

| More on:
Female hand holding piggy bank. Save money and financial investment

Image source: Getty Images

Investors who missed the big rally off the 2020 crash are getting another chance to buy top TSX stocks at cheap prices to start a TFSA retirement portfolio focused on dividends and total returns.

Bank of Montreal

Bank of Montreal (TSX:BMO)(NYSE:BMO) trades near $124 per share at the time of writing compared to the 2022 high above $154. The current dividend yield is 4.5%, and more payout hikes should be on the way in the coming years.

Bank of Montreal has paid a dividend every year since 1829. The board increased the distribution by 25% late in 2021 and bumped it up another 4.5%, when the company announced the fiscal Q2 2022 results.

Looking ahead, Bank of Montreal should deliver solid revenue and profit growth. The bank is in the process of buying Bank of the West for US$16.3 billion in a deal that will give Bank of Montreal’s existing American subsidiary, BMO Harris Bank, a significant presence in the California market and add more than 500 branches to the U.S. business.

Near-term volatility in financial stocks could push the share price even lower, but BMO stock already appears undervalued at the current share price and offers an attractive dividend yield. Investors might consider buying a half position at this level and look to add on any further downside.

Enbridge

Enbridge (TSX:ENB)(NYSE:ENB) operates oil pipelines, natural gas pipelines, natural gas storage, natural gas distribution utilities, and renewable energy assets.

The rebound off the pandemic lockdowns is driving domestic and international demand growth for oil and natural gas. Jet fuel, gasoline, and diesel fuel consumption is on the rise in Canada and the United States, as airlines ramp up capacity, commuters start returning to offices, and trucking companies deliver consumer goods. Enbridge transports oil from producers to refineries and then moves the end products to their storage destinations to be distributed by trucks to airports or service stations.

Enbridge also has an oil export terminal in the United States that it purchased last year. In addition, Enbridge is building new natural gas pipelines to deliver the commodity to liquified natural gas (LNG) facilities that ship the fuel to international buyers.

Enbridge is evaluating new opportunities in carbon capture and hydrogen hubs and continues to invest in renewable energy facilities. Finally, the natural gas distribution utility assets provide reliable and predictable cash flow to round out the overall asset mix.

The drop is the share price from $59 a few weeks ago to the current price of $55 gives new investors a chance to buy Enbridge stock on a decent dip and secure a 6.25% dividend yield for TFSA passive income or a portfolio focused on total returns through the use of a dividend-reinvestment strategy.

The bottom line on top stocks oversold dividend stocks to buy now for a TFSA

Bank of Montreal and Enbridge pay attractive dividends that should continue to grow over the coming years. The stocks look cheap right now and offer attractive yields for a buy-and-hold TFSA retirement portfolio.

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 Enbridge. Fool contributor Andrew Walker owns shares of Enbridge.

More on Dividend Stocks

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »