2 Top TSX Dividend Stocks to Buy Now for a Self-Directed TFSA or RRSP

Top TSX dividend stocks are now trading at attractive prices for TFSA and RRSP investors.

| More on:
calculate and analyze stock

Image source: Getty Images

The market correction is providing Canadian savers with a chance to buy top TSX dividend stocks at cheap prices for a Tax-Free Savings Account (TFSA) targeting passive income or a self-directed Registered Retirement Savings Plan (RRSP) focused on total returns.

Telus

Telus (TSX:T)(NYSE:TU) trades for less than $28 per share at the time of writing compared to more than $34 earlier this year. Investors who buy Telus stock at the current level can pick up a solid 4.8% dividend yield.

Telus is a good stock to buy if you are concerned that a recession is on the way in the next 12-18 months. The company gets most of its revenue from essential mobile and internet service subscriptions. The TV subscription revenue could come under pressure if people really get tight for money, but other discretionary spending would likely be cut before households give up their TV service.

Telus reported strong second-quarter (Q2) 2022 results that show the business is holding up well in a challenging economic climate. Consolidate operating revenue and other income rose 7.1% compared to the same period last year.

Telus saw strength in both the core communications businesses and in the subsidiaries. Telus Health, in particular, is worth watching for future growth. The division recently closed its acquisition of LifeWorks in a deal that will create a global digital health platform providing services to companies with employee health plans.

Telus Agriculture has expanded its scope to the broader consumer goods market. The group helps farmers and retailers make their businesses more efficient through the use of digital solutions.

Telus has a great track record of dividend growth. The board typically raises the payout two times per year and is targeting annual dividend growth of 7-10% over the medium term.

TD Bank

TD (TSX:TD)(NYSE:TD) is Canada’s second-largest bank with a current market capitalization of $157 billion.

The bank is well known for its strong retail banking operations in Canada, but TD has built up a significant business in the United States over the past two decades, and that trend continues. TD is in the process of making two strategic acquisitions south of the border that will make the American business a much larger contributor to revenue and profits. TD is buying First Horizon, a retail bank located in the southeastern states, for US$13.4 billion. The deal will boost the branch network by 400 locations and will bump TD up the ranks in the American market, becoming a top-six U.S. bank.

In addition, TD is spending US$1.3 billion to purchase Cowen, an investment bank. The deal gives TD a larger capital markets team with broader scope and capabilities. The bank has historically trailed its peers in this segment of the banking industry.

TD remains very profitable and is on track this year to top the 2021 earnings. The board increased the dividend by 13% for fiscal 2022, and investors should see another decent payout hike for fiscal 2023.

TD stock trades near $85 per share at the time of writing. That’s down considerably from the $109 it hit in February. A recession is likely on the way, but the drop in TD’s share price appears overdone given the current expectations for a short and mild economic downturn.

Investors who buy the stock at the current level can pick up a 4.2% dividend yield.

The bottom line on top TFSA and RRSP stocks

Telus and TD pay attractive dividends that should continue to grow. If you have some cash to put to work in a TFSA or 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 TELUS CORPORATION. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker owns shares of Telus.

More on Dividend Stocks

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

think thought consider
Dividend Stocks

Down 10.88%: Is ATD Stock a Good Buy After Earnings?

Alimentation Couche-Tard (TSX:ATD) stock might not be the easy buy-case it once was. Here’s a look at what happened.

Read more »

money cash dividends
Dividend Stocks

TFSA Dividend Stocks: Earn $1,200/Year Tax-Free

Canadian stocks like Fortis are a must-have in your portfolio to earn tax-free yields for decades.

Read more »

sale discount best price
Dividend Stocks

1 Dividend Stock Down 11 Percent to Buy Right Now

Do you want a great dividend stock down 11% that can provide years of growth potential? Here's one heavily discounted…

Read more »

Growth from coins
Dividend Stocks

1 Grade A Dividend Stock Down 11% to Buy and Hold Forever 

If you're looking for the right dividend stock at the right price, you're going to want to consider this insurance…

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Are you looking for dividend stocks to buy right now? Here are two top picks!

Read more »

edit Taxes CRA
Dividend Stocks

Tax Time: How to Keep More of Your Money

Nearly everyone hates paying taxes, although Canadians can lessen the financial pain with the right tax strategies.

Read more »