RRSP Investors: 2 Top TSX Dividend Stocks to Own for 25 Years

These Canadian dividend stocks have generated amazing returns for patient RRSP investors and still look attractive to buy today.

| More on:
Piggy bank next to a financial report

Image source: Getty Images.

Slow and steady wins the race when it comes to building wealth for retirement. This is particularly true when Registered Retirement Savings Plan (RRSP) investors buy top dividend stocks and use the distributions to acquire new shares through the company’s dividend-reinvestment plan (DRIP).

This investing strategy harnesses the power of compounding, and, although it takes time, a small initial investment can ultimately grow to be a substantial pool of savings for the golden years.

BCE

BCE (TSX:BCE)(NYSE:BCE) is Canada’s largest communications company with a current market capitalization of close to $60 billion. The business provides mobile, internet, TV, and security services to homes and businesses across the country. BCE also has a media division that is home to a TV network, specialty channels, radio stations and digital platforms. Interests in sports teams and a network of retail locations round out the assets.

BCE is investing $5 billion on capital projects in 2022 to drive future revenue and cash flow growth. These include connecting another 900,000 customers with fibre optic lines and the continued expansion of the 5G network.

BCE raised its dividend by at least 5% in each of the past 14 years. Management expects free cash flow to increase by 2-10% in 2022, so another solid payout increase should be on the way for 2023. The current dividend provides an annualized yield of 5.6%.

BCE is a good stock to buy for investors who want to own businesses that have the power to raise prices in an era of high inflation.

A $10,000 investment in BCE stock 25 years ago would be worth more than $195,000 today with the dividends reinvested.

Enbridge

Enbridge (TSX:ENB)(NYSE:ENB) has a market capitalization of $115 billion. The company is a giant in the North American energy infrastructure industry with oil pipeline networks that transport 30% of the oil produced in Canada and the United States. Enbridge also owns natural gas pipelines, natural gas utilities, and renewable energy assets, including wind, solar, and geothermal facilities.

Management is focusing new investments on hydrogen facilities, carbon-capture hubs, and energy export opportunities. Enbridge recently announced a deal to buy a 30% stake in the $5.1 billion Woodfibre liquified natural gas (LNG) facility being built in British Columbia. In the United States, Enbridge spent US$3 billion last year to buy an oil export terminal.

Enbridge has a $13 billion capital program on the go that should drive revenue and cash flow growth in the next few years. The board raised the dividend in each the past 27 years. Investors who buy ENB stock today can get a 6% dividend yield.

Enbridge is a good stock to buy if you want a high-yield stock that pays a secure dividend supported by cash flow that largely comes from regulated assets.

Long-term RRSP investors have done well with ENB stock. A $10,000 investment in Enbridge 25 years ago would be worth about $245,000 today with the dividends reinvested.

The bottom line on top TSX dividend stocks to buy for a retirement fund

BCE and Enbridge are leaders in their industries and pay attractive dividends that should continue to grow every year. If you have some cash to put to work in a self-directed RRSP, these stocks 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 BCE and Enbridge.  

More on Dividend Stocks

Target. Stand out from the crowd
Dividend Stocks

RRSP Pension: 2 Dividend Stocks to Buy on the Latest Dip

These high-yield TSX stocks look cheap right now for RRSP investors.

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

Safe and Sound Stocks for Canadians: My Top 5 Choices

Five safe stocks to buy on a market pullback.

Read more »

5G chip
Dividend Stocks

8.86% Dividend Yield! I’m Buying This TSX Stock and Holding it for Decades

The TSX is a gold mine of lucrative dividend stocks trading near their multi-year low. An 8.86% dividend yield is…

Read more »

green power renewable energy
Dividend Stocks

Brookfield Infrastructure vs. Brookfield Renewable: Which Brookfield Stock is a Better Buy?

Both Brookfield Infrastructure (TSX:BIPC) and Brookfield Renewable (TSX:BEPC) are dividend income earners trading at a discount, but which stock is…

Read more »

Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline
Dividend Stocks

Cash Kings: 3 TSX Stocks That Pay Monthly

These Canadian stocks reward their shareholders with regular monthly dividends and a high yield.

Read more »

Happy retirement
Retirement

3 Stocks Retirees Should Absolutely Love

Retirees aiming for a solid mix of capital gains and dividend returns should consider these three stocks.

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

Passive Income: Top TSX Dividend Stocks to Buy for 7% and 8% Yields

These top TSX dividend stocks look undervalued and now offer high yields for investors seeking passive income.

Read more »

Paper Canadian currency of various denominations
Dividend Stocks

TFSA 101: Earn $500 Per Month Tax-Free

Here's how a covered-call ETF plus a TFSA can help you create a lucrative monthly passive-income stream.

Read more »