Retirees: 3 Top TSX Dividend Stocks to Buy for Passive Income

These stocks pay attractive dividends that should continue to grow in the coming years.

| More on:
a man celebrates his good fortune with a disco ball and confetti

Source: Getty Images

The market correction is giving Canadian retirees a chance to buy great TSX dividend stocks at undervalued prices. Yields have soared to attractive levels for investors who are seeking reliable and growing passive income from their Tax-Free Savings Account (TFSA) portfolios.

Telus

Telus (TSX:T) has given investors a dividend increase every year for more than two decades. The board normally bumps up the payout twice per year with ongoing annual increases expected to by in the 7-10% range over the medium term.

Telus accelerated a big chunk of its capital program in the past two years. As a result, management says the copper-to-fibre tradition initiative will be done ahead of the original schedule and this should free up more cash to return to shareholders in the next few years, as the ongoing capital program settles back to a lower level of about $2.5 billion per year.

Telus is expanding beyond the traditional communications lines of business. The company’s Telus Health division bought LifeWorks this year in a deal that creates a global digital healthcare platform for companies that have employee health benefit programs.

Telus stock trades near $28.50 at the time of writing compared to more than $34 earlier this year. The pullback appears overdone, and investors can now get a solid 4.75% dividend yield.

Enbridge

Enbridge (TSX:ENB) is a giant in the North American energy infrastructure sector. The company moves nearly a third of the oil produced in Canada and the United States and 20% of the natural gas used by American homes and businesses.

Domestic fuel demand is on the rise, as airlines ramp up capacity to meet surging travel bookings and office workers hit the highways again. This should support strong demand for Enbridge’s services. The company transports oil from producers to refineries and moves fuel from the refineries on to storage facilities.

On the natural gas side, Enbridge is investing in new assets to tap the rising global demand for liquified natural gas (LNG). The company is building new pipelines in the United States to deliver natural gas to LNG sites. In Canada, Enbridge recently announced plans to take a 30% stake in the new Woodfibre LNG plant being built in British Columbia.

The board raised the dividend in each of the past 27 years. Investors who buy the stock at the current price can pick up a 6.5% dividend yield.

Bank of Montreal

Bank of Montreal (TSX:BMO) raised its dividend by 25% near the end of 2021 and gave investors another 4.5% increase when the bank reported second-quarter 2022 results. The board has declared dividends annually for more than 190 years.

Bank of Montreal is making a big bet on growth in the U.S. economy with its US$16.3 billion acquisition of Bank of the West. The deal will add more than 500 branches to the American operations and will give Bank of Montreal a strong presence in California.

The stock trades near $127 per share at the time of writing compared to more than $154 earlier this year. Investors who buy at the current price can get a 4.4% dividend yield.

The bottom line on top stocks for passive income

Telus, Enbridge, and Bank of Montreal all pay attractive dividends that should continue to grow in the coming years. If you have some cash to put to work in a TFSA focused on passive income, 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 and TELUS CORPORATION. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker owns shares of Telus and Enbridge.

More on Dividend Stocks

Man data analyze
Dividend Stocks

3 Great Investments for Monthly Dividend Income

Investing in monthly dividend stocks such as Exchange Income and Savaria should help Canadian investors create a passive-income stream in…

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

Dividend Investors: Why I’d Buy Telus Stock Over BCE Any Day

Telus (TSX:T) has a higher dividend yield and potentially more attractive comeback story.

Read more »

Canadian dollars are printed
Stocks for Beginners

Transform Your $7,000 TFSA Contribution Into a Wealth-Building Machine

Looking to turn your TFSA into a wealth-building machine? These stocks can help do that and much more, all on…

Read more »

worker holds seedling in soybean field
Dividend Stocks

1 Stellar Canadian Stock Down 42% From All-Time to Buy and Hold Forever

Not only is this dividend stock a great long-term buy for income, but also for its value.

Read more »

Canadian energy stocks are rising with oil prices
Dividend Stocks

Should You Buy This Energy Stock for Its 9.4% Dividend Yield?

Alvopetro Energy is a high yield dividend stock that trades at a cheap multiple in June 2025, given its growth…

Read more »

grow money, wealth build
Dividend Stocks

High Yield + Growth: 2 Generous Dividend Heavyweights to Buy Today

Enbridge (TSX:ENB) and another dividend stock prove you can have gains, superior dividend growth, and high upfront yields.

Read more »

a man relaxes with his feet on a pile of books
Dividend Stocks

Retirees: How You Could Earn $466 a Month in Dividends With Less Than $100k in Savings

Canadian retirees should consider owning blue-chip TSX dividend stocks such as Enbridge to generate a growing stream of passive income.

Read more »

senior man smiles next to a light-filled window
Dividend Stocks

Retirees: Use a TFSA and Generate Tax-Free Income, Plus Avoid the OAS Clawback

The TFSA is a great way to create income for life, especially with a dividend stock like this.

Read more »