2 Dividend Heavyweights to Help Your TFSA Soar in 2023

TD Bank (TSX:TD) and another dividend stock can help make you rich, with minimal effort.

| More on:
TFSA and coins

Image source: Getty Images

Dividend heavyweights can help your TFSA (Tax-Free Savings Account) hold steady through another year of choppy waters. Indeed, many investors are on edge, as this bear market continues to work its course. Many pundits are timing its end, but at the end of the day, investors need not care about timing. Bear markets never last forever. And though this bear market could drag on for an extended period of time, new investors should focus on nibbling away gradually over time en route to creating wealth over the long haul.

Making money in a week-to-week basis is tough. Unless you’re a market-trading wizard, odds are that you’ll end up with a quick (and permanent) loss by doing so. Instead, focus on getting solid results for the next several years. That way, the odds will be on your side. And you can stay calm when the inevitable 10-20% dips bring forth buying opportunities to investors willing to stay brave, as others around them run around in a panic. (Could another such drop be on the horizon? Certain market strategists seem to think so.)

My favourite buys amid tough times tend to be the dividend heavyweights. By punching your ticket to them while they’re down, you’ll not only get a chance for solid returns in a rebound, but you’ll score a swollen dividend yield. As times get better, such a dividend is likely to continue growing through the years.

Indeed, it’s not easy to be a buyer in a brutal bear market. However, the rewards are great, and you could be setting yourself up for a very prosperous retirement. As share prices fall, dividend yields rise. Undoubtedly, dividend cuts can happen, but if you stick with quality dividend stocks like TD Bank (TSX:TD) and Canadian Natural Resources (TSX:CNQ), odds are that the yield you see is what you’ll get to keep, even as conditions weaken further.

I consider TD and CNQ stock to be wonderful buys in times like these. Sure, you can get more pop from a battered tech stock once the tables turn. However, with TD and CNQ, you’ll be able to lock in a juicier payout and capital gains potential in event of a recovery. In the face of the unknown, I’d rather have the latter.

TD Bank

TD Bank (TSX:TD) is a banking stud that I view as one of the “growthiest” of the Big Six basket. Indeed, any Canadian bank is a fine buy right here. But TD seems to be the most attractive, given its latest push into the U.S. banking scene. Indeed, the U.S. region is a great growth outlet for the Canadian banks, as they look to keep their dividend-growth prospects alive and well going into a downturn.

With NIM (net interest margin) expansion alleviating some pressure in the latest quarter, TD seems to be in an interesting spot if a 2023 recession can be avoided. With solid risk managers and new acquisitions in the bag, I think TD is well on its way to new highs from here.

For now, the stock’s trying to come back from a 27% peak-to-trough dip. At 9.64 times trailing price to earnings (P/E) and with a 4.16% dividend yield, I view TD stock as one of my TFSA top picks for 2023.

Canadian Natural Resources

Canadian Natural Resources (TSX:CNQ) is the king of the Albertan oil patch. For Canadians without energy exposure, the stock seems like a must-buy while momentum cools. The stock trades at a low 7.57 times trailing P/E and with a 4.21% dividend yield.

Indeed, the oil patch may not be a sexy investment. However, I view energy as a place to score less-correlated (and less-choppy) returns. Last month’s 13% dividend hike is the cherry on top for a top-performing stock that seems tough to stop.

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.

Fool contributor Joey Frenette has positions in Toronto-Dominion Bank. The Motley Fool recommends Canadian Natural Resources. The Motley Fool has a disclosure policy.

More on Dividend Stocks

calculate and analyze stock
Dividend Stocks

TFSA: Invest $20,000 and Get $867/Year Without Lifting a Finger

Compound passive income by investing tax-free in your TFSA. Check out this mini-portfolio that could turn $20K into $867/year in…

Read more »

retirees and finances
Dividend Stocks

How to Create a Million-Dollar TFSA in Two Decades

Your TFSA could create riches you didn't know were possible, but only if you commit again and again to your…

Read more »

A plant grows from coins.
Dividend Stocks

TFSA Top Stocks: 2 Cheap Dividend-Payers to Buy Before January Ends

TFSA investors can appreciate dividend-paying stocks like Barrick Gold at these modest valuations.

Read more »

analyze data
Dividend Stocks

3 Top Small-Cap Dividend Stocks to Buy in January 2023

Given their high dividend yields and attractive valuations, the following three small-cap stocks would be excellent buys.

Read more »

exchange-traded funds
Dividend Stocks

2 Ways to Score a Richer Monthly TFSA Payout

These two Vanguard ETFs pay high yields and are steady-paying holdings in a TFSA.

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

How to Generate $10 Every Day (That’s $3,650 a Year!) in Passive Income

Purchasing blue-chip TSX stocks can help investors earn a steady stream of dividend income and benefit from long-term capital gains.

Read more »

growing plant shoots on stacked coins
Dividend Stocks

How to Generate $500 in Passive Income Each Month

Canadian investors from all walks of life can benefit from generating an extra $500 in passive income every month. Here's…

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

The 2 Canadian Dividend Stocks You’ll Want to Own in Tough Times

CN Rail (TSX:CNR) and BCE (TSX:BCE) are great dividend growers perfect to buy on a recession dip.

Read more »