RRSP Investors: 2 Oversold TSX Dividend Stocks to Start a Retirement Fund

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

| More on:
Silver coins fall into a piggy bank.

Source: Getty Images

The second phase of the 2022 market correction is providing RRSP investors with an opportunity to buy top Canadian dividend stocks at undervalued prices for portfolios focused on generating attractive long-term total returns.


Telus (TSX:T)(NYSE:TU) trades near $29 at the time writing compared to more than $34 earlier this year. The pullback in the share price looks overdone, and investors can now pick up an attractive 4.6% dividend yield.

Telus is a good stock to buy if you want to add a defensive pick to your RRSP portfolio. The bulk of the revenue comes from internet and mobile services. These should be recession resistant, given their essential nature. Even the TV subscriptions should hold up well during an economic downturn. People will generally cut other discretionary spending before they abandon their source of entertainment.

Telus generated strong second-quarter (Q2) 2022 results that show the resiliency of the business in an uncertain economic climate. Adjusted net income jumped 21% compared to the same period last year.

Telus has interesting subsidiaries that could drive revenue growth in the coming years. For example, Telus just completed the $2.3 billion takeover of LifeWorks. The deal expands the global reach of Telus Health, which provides digital health and wellness services to medical professionals and corporate clients.

Telus tends to raise the dividend twice per year and is targeting annual dividend growth of 7-10% over the medium term.


Manulife (TSX:MFC)(NYSE:MFC) operates insurance, wealth management, and assets management businesses primarily located in Canada, the United States, and Asia.

The company took a couple of hits this year that were beyond its control. COVID-19 caused higher morbidity and mortality claims in the insurance businesses in Canada and the United States in Q1 2022, while Omicron lockdowns in Asia in the quarter hindered product sales. In addition, the market correction in Q2 that put pressure on wealth management results could extend through the third quarter.

Despite the near-term market challenges, Manulife looks attractive. Soaring interest rates should have a positive impact, as Manulife will be able to earn higher returns on cash it needs to set aside for potential insurance claims. Longer term, the Asia business should expand, as growth in middle-class wealth drives demand for insurance and wealth management products.

Manulife trades near $22 per share compared to $28 earlier this year. Investors who buy the stock at the current level can lock in a solid 6% dividend yield. The board raised the dividend by 18% late last year and investors should see another decent increase for 2023, even in the current era of economic uncertainty.

Manulife is a good stock to buy if you want a high-yield financial pick but don’t want to take on the housing risks that come with owning the Canadian banks.

The bottom line on top TSX stocks to buy for a self-directed RRSP

Telus and Manulife 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 today 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 TELUS CORPORATION. Fool contributor Andrew Walker owns shares of Telus and Manulife.

More on Dividend Stocks

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Top TSX dividend stocks are now on sale.

Read more »

Canadian Dollars
Dividend Stocks

1 Dividend Stock That Could Create $683.87 in Tax-Free Passive Income in 10 Years

You can earn massive passive income tax free from your TFSA. Here's how with your first dividend stock or GIC!

Read more »

Dividend Stocks

This 4.26% Dividend Stock Is My Top Pick for Immediate Income

Finding a great dividend stock is one thing, but growth in the near future is all but certain for this…

Read more »

edit Safe pig, protect money
Dividend Stocks

3 Dividend Stocks You Can Safely Hold for Decades

Are you looking for dividend stocks that can perform for the long term? These three stocks could earn safe and…

Read more »

sale discount best price
Dividend Stocks

3 Bargain Stocks You Can Buy Today and Hold Forever

Are you looking for some of the best bargain stocks you can buy today? Here’s a trio of options that…

Read more »

Senior couple at the lake having a picnic
Dividend Stocks

Have Room in Your TFSA? Start Earning Tax-Free Dividends With Just $15,000

Use the tax-sheltered status of the TFSA to hold quality dividend stocks such as Enbridge and create a stable income…

Read more »

stock analysis
Dividend Stocks

Better Buy for TFSA Passive Income: Telus Stock or TD Bank?

TD and Telus look cheap today. Is one stock now oversold?

Read more »

growing plant shoots on stacked coins
Dividend Stocks

Want Extra Monthly Cash? 1 Dividend Stock to Buy Now and Hold Forever

Simply buying and holding this top monthly dividend stock for the long term can potentially make you super rich.

Read more »