2 TSX Dividend Stocks With Yields Over 6% That Are Smart Buys Now

TC Energy (TSX:TRP) and CIBC (TSX:CM) stocks are cheap with swollen dividend yields that are worth your consideration.

| More on:
Increasing yield

Image source: Getty Images

Last week’s painful end has many doubting the sustainability of the bounce off the market’s bottom. With the bears out in full force, it’s easy to sell and go away until the dust has a chance to settle, perhaps in 2023, when the Fed is ready to pull back on the rate hikes and hawkish talk. Things are uneasy these days. But they have been for over a year now. Eventually, negative sentiment will exhaust itself, and the sellers will be overpowered by the buyers, as hope makes a comeback.

For many new investors, investing ahead of a recession can be seen as intimidating, even foolish (lower-case f, of course!). Stocks seem to be on unstable ground. That said, investors need not invest in the riskiest parts of this market (think the tech sector). Instead, they can pick away at the beaten-down dividend payers and keep on collecting payouts, as markets move up or down.

Indeed, the share movements matter less to income-oriented investors. As long as the dividend is healthy, growthy, and bountiful, there’s less to be concerned about from the macro perspective. And if you’re going to be forced to endure another 2022-esque year of volatility and worry, you may as well ensure you’re getting paid a fat enough dividend to make it all worth your while!

Looking for safe 6%-yielding dividend stocks?

The 4% rule has gained considerable traction among retirees. While 4% yielders are a fine middle-ground for retirees who seek safe payouts with a good amount of growth, I’d argue that in times like these (when the bear is in control), investors can ditch the 4% rule. Inflation has raised our costs of living at an alarming rate. Further, stock price depreciation has turned many 5% yielders into 6% yielders.

These 6% yielders aren’t necessarily at risk of an imminent dividend cut. Though they may face difficulties going into a recession year, investors shouldn’t be so dismissive of such names that may be rich with value.

Consider TC Energy (TSX:TRP) and CIBC (TSX:CM) stocks.

TC Energy

TC Energy is a midstream energy firm with shares that have fallen under considerable pressure. Shares are down more than 27% from their all-time highs and could find themselves flirting with lows not seen since 2020. With the energy sector showing some fragility, many investors wonder if TRP stock is still a safe holding for a passive-income fund. The dividend yield has swelled to 6.5%. Despite the sizeable yield, I view it as safe.

Recently, Keystone pipeline leaks have weighed on sentiment. Despite the negative headlines, investors should focus on the long-term opportunity at hand. TC Energy has a long growth runway in Mexico, as it looks to increase its gas transportation capacity.

At 17 times trailing price to earnings, I view TRP stock as a great dividend payer that’s on sale.


CIBC is a Canadian bank that’s felt immense pain of late, with shares plunging around 33% from its highs. That’s a bigger hit to the chin than its peers. Amid the slide, the dividend yield has surged to 6.11%. That’s profoundly bountiful for such an established financial. Undoubtedly, the main concern is CIBC’s large mortgage book as we sail into a recession.

The housing market is feeling the pressure, and there are concerns things could worst in the first quarter of 2023. In that regard, CIBC’s discount seems justified. The stock trades at 8.3 times trailing P/E. That’s a steep discount too good to pass up for those tempted by the huge payout.

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 no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Investing

data analytics, chart and graph icons with female hands typing on laptop in background
Stocks for Beginners

What Investors Should Take Away From WinPak Stock’s Earnings

WinPak (TSX:WPK) stock has stagnated in share price over the last few years, but has there been enough momentum to…

Read more »

pipe metal texture inside
Dividend Stocks

TC Energy Stock: An Undervalued 7.8% Dividend Stock

TC Energy stock appears to be trading at a discount of about 20%.

Read more »

Man data analyze
Dividend Stocks

1 Dividend Stock Down 13% to Buy Right Now

Parkland (TSX:PKI) stock may be down by 13%, but shares are still way up in the last year. So, this…

Read more »

Senior Couple Walking With Pet Bulldog In Countryside
Dividend Stocks

TFSA 101: How Pensioners Can Earn $4,987.50 Per Year in Tax-Free Passive Income

Retirees can use this TFSA strategy to boost portfolio yield while reducing risk.

Read more »

a person searches for information on the internet
Top TSX Stocks

Just Released: 5 Top Stocks to Buy in April 2024 [PREMIUM PICKS]

Today's historically high dividend yields of 6% to 9% just might be here to stay. Some payouts could even grow.

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

Retirees: Here’s How to Boost Your CPP in 2024

By making RRSP contributions, you can lower your after-tax CPP amount. You can then use the RRSP space to invest…

Read more »

bulb idea thinking
Stocks for Beginners

3 No-Brainer Stocks to Buy Now for Less Than $1,000

If you're looking for companies bound for more greatness, these three no-brainer stocks are easy buys, no matter what the…

Read more »

Target. Stand out from the crowd

Finning International: A Reasonable Buy Here

Finning International is a cyclical dividend stock that offers decent long-term returns potential of north of 10%.

Read more »