RRSP Investors: 2 Top Canadian Dividend Stocks to Buy Now for Total Returns

RRSP investors can buy top dividend stocks at cheap prices right now for a portfolio focused on total returns.

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Canadian savers can take advantage of the market pullback to buy these top TSX dividend stocks at cheap prices for a self-directed RRSP focused on total returns.

Suncor

Suncor (TSX:SU) (NYSE:SU) found itself in the penalty box after the company slashed its dividend by 55% in the early days of the pandemic. This upset long-term loyal shareholders who thought Suncor would keep the payout in place through the downturn, as it had done in previous oil crashes.

Management and the board have learned their lesson and Suncor has since raised the dividend significantly to the point where the current quarterly payout of $0.47 per share is an all-time high. Suncor still lags its peers, but the next 12–24 months could see the stock make up ground.

Suncor has a new CEO and several new board members after the 2022 shakeup. The business is already selling non-core assets to unlock value and is even evaluating the possible monetization of the retail group. Suncor’s portfolio of roughly 1,500 Petro-Canada locations could fetch as much as $10 billion, according to some analyst estimates.

Suncor is using excess cash this year to reduce debt and buy back up to 10% of the outstanding stock. This will pay off down the road for patient investors, and 2023 could see a large dividend increase or generous special dividends based on quarterly results.

At the time of writing Suncor trades for $42 per share and provides a 4.5% dividend yield. The stock traded at $53 in June. It wouldn’t be a surprise to see the share price move back above that price by the end of this year.

Oil prices remain very profitable for Suncor, even after the drop in the past couple of months. Industry leaders are warning there could be a supply squeeze in the next few years as rising demand outpaces supply growth due to the lack of investment in new production.

Suncor is a good stock to buy today if you think oil prices are going to remain at current levels or move higher over the medium term.

Enbridge

Enbridge (TSX:ENB) (NYSE:ENB) is a giant in the North American energy infrastructure sector with a current market capitalization of nearly $114 billion. The company owns oil pipelines, natural gas pipelines, natural gas utilities, and renewable energy assets. Enbridge moves 30% of the oil produced in Canada and the United States, so it is strategically important for the two economies.

Enbridge’s recent investments focus on export opportunities. The company purchased an oil export terminal in Texas late last year and just announced plans to take a 30% stake in the $5.1 billion Woodfibre liquified natural gas (LNG) facility being built in British Columbia.

Enbridge has $13 billion in capital projects on the go to drive revenue and cash flow growth. Additional acquisitions could be on the way.

The stock trades near $56 compared to $59.50 in early June. The dip appears overdone and investors can pick up a solid 6.15% dividend yield.

The bottom line on top TSX dividend stocks to buy now

Suncor and Enbridge pay attractive dividends that should continue to grow. If you have some cash to put to work in a self-directed RRSP, these stocks look cheap and deserve to be on your radar.

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 and Suncor.

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