3 Top TSX Dividend Stocks to Start a TFSA Retirement Fund

TFSA investors can now buy top TSX dividend stocks at discounted prices.

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

Source: Getty Images

The market correction is giving new Tax-Free Savings Account (TFSA) investors a chance to buy great Canadian dividend stocks at undervalued prices to start a self-directed personal pension. One popular strategy for building retirement wealth involves owning great dividend stocks and using the distributions to buy new shares.

Bank of Montreal

Bank of Montreal (TSX:BMO) is currently Canada’s third-largest bank with a market capitalization of $81 billion. The stock trades near $120 per share at the time of writing compared to a 2022 high above $154.

Bank of Montreal paid its first dividend in 1829, and investors have picked up a share of the profits every year since. This is a great track record and ongoing dividend growth is expected in the coming years. The board raised the dividend in late 2021 and increased the payout by another 4.5% when the bank reported the fiscal second-quarter (Q2) 2022 earnings.

Bank of Montreal is betting big on the U.S. economy. The company is buying Bank of the West for US$16.3 billion in a deal that will add more than 500 branches to the existing American business and give Bank of Montreal a strong position in California.

Investors who buy the stock at the current price can get a 4.5% dividend yield.


Telus (TSX:T) gets most of its revenue from mobile and internet subscription services that businesses and households need regardless of the state of the economy. This should make Telus a good stock to buy and hold through a recession.

Telus typically raises its dividend twice annually and is targeting average increases of 7-10% per year over the medium term. The company ramped up its capital program in the past few years to accelerate its copper-to-fibre transition. This should be completed in 2023 and more cash is expected to be available for distributions in the coming years.

Telus stock trades near $27 at the time of writing compared to $34 in April. The company generated strong Q2 2022 results, and investors should see good numbers for full-year 2022 and 2023. As such, the stock looks oversold right now for a buy-and-hold portfolio. Investors can currently secure a 5% dividend yield.

Canadian Natural Resources

Canadian Natural Resources (TSX:CNQ) raised its dividend in each the past 22 years and hiked the payout by 29% for 2022. In addition, CNRL is paying out bonus dividends based on the amount of excess cash it has on hand at the end of each quarter. The current quarterly base dividend is $0.75 per share. Investors received a $1.50 per share bonus for the Q2 2022 results.

Canadian Natural Resources owns oil and natural gas production facilities that span the hydrocarbon spectrum. The company efficiently moves capital around the assets to take advantage of changes in commodity prices. This is one reason it has been so successful in being able to raise dividends during the cycles of the energy sector.

Oil and natural gas demand are expected to remain strong for decades and prices should stay high for the next few years.

CNQ stock trades near $75 per share at the time of writing compared to a high of $88 in June. Investors can currently get a 4% yield from the base dividend.

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

Bank of Montreal, Telus, and CNRL all pay attractive dividends that should continue to grow. If you have some cash to put to work in a TFSA retirement portfolio, 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 CDN NATURAL RES and TELUS CORPORATION. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker owns shares of Telus.

More on Investing

grow dividends
Dividend Stocks

2 Unloved TSX Dividend Stocks That Could Soar in 2024

These top TSX dividend stocks look cheap right now.

Read more »

TFSA and coins
Dividend Stocks

3 TFSA Stocks I’m Eyeing for My 2024 Contribution

In 2024, I'll be adding dividend stocks like Brookfield to my account.

Read more »

Dice engraved with the words buy and sell
Bank Stocks

TD Bank Stock: Buy, Sell, or Hold?

TD Bank has been hit with negative earnings momentum and rising provision for credit losses, making TD Bank stock a…

Read more »

TFSA and coins
Dividend Stocks

Canada Revenue Agency: 1 Crucial TFSA Change You Need to Be Aware Of

The TFSA contribution limit is out for 2024 and has increased to $7,000, raising the cumulative contribution room to $95,000.

Read more »

money cash dividends

Sitting on Cash? These 3 TSX Stocks Are Great Buys

Got some cash left over from the Black Friday sales? Here are three TSX stocks that could have long-term upside!

Read more »

tsx today
Tech Stocks

TSX Today: What to Watch for in Stocks on Tuesday, November 28

Canadian bank earnings and the U.S. consumer confidence data could give further direction to TSX stocks today.

Read more »

money cash dividends
Dividend Stocks

3 Passive-Income Streams That Will Take You to the Next Level

These passive-income streams do not take a second more of your time. Focus on your day job and look forward…

Read more »

A worker uses the cloud for paperless work. tech
Tech Stocks

Alibaba Just Became a Dividend Stock… Could This TSX Stock be Next?

Alibaba Group Holding (NYSE:BABA) recently became a dividend stock. Could Kinaxis Inc (TSX:KXS) be next?

Read more »