Retirement Wealth: 2 Top TSX Dividend Stocks to Buy Now and Own for Decades

Top TSX dividend stocks are now on sale for investors seeking passive income.

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The market correction is giving Canadian investors a chance to buy top TSX dividend stocks at undervalued prices for self-directed Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA) portfolios.

BCE

BCE (TSX:BCE) trades for close to $60 per share at the time of writing compared to a 12-month high of $74. The pullback from the peak last spring appears overdone. BCE generated solid results through the first nine months of last year, and the earnings for the fourth quarter (Q4) of 2022 will likely show that the business delivered revenue, earnings and free cash flow growth that comfortably land in the full-year target range.

BCE invested roughly $5 billion in 2022 on growth initiatives. The company connected another 900,000 customer buildings to its fibre optic network. BCE also ramped ups the expansion of its 5G mobile network after spending $2 billion in 2021 on new 3,500-megahertz spectrum. These capital programs help BCE protect its wide competitive moat while laying the foundations for revenue growth through added services and upgraded broadband plans.

A dividend increase of about 5% is likely on the way for 2023. BCE raised the payout by at least this amount in each of the past 14 years. Investors who buy the stock at the current level can pick up a solid 6.1% dividend yield.

BCE gets most of its revenue from essential internet and mobile subscription services. These revenue streams should hold up well, even if the economy goes through a recession this year or in 2024.

Manulife

Manulife (TSX:MFC) has insurance, wealth management, and asset management businesses primarily located in Canada, the United States, and Asia.

The company had a rough ride in 2022 with COVID-19 driving up mortality and morbidity claims in Canada and the United States in the first part of the year. Covid also caused lockdowns in Asia that hindered new product sales.

The market correction in global equites then hit the other parts of the business through the back half of the year. Despite the challenging conditions, Manulife still delivered solid results through the first nine months of 2022. Net income was $5.4 billion compared to $5.0 billion in the first three quarter of last year. Core earnings, however, dipped to $4.4 billion from 4.8 billion.

Manulife raised the quarterly dividend by 18% late in 2021 to $0.33 per share. This provides an annualized yield of 5.4% at the current share price near $24.25. Manulife traded as high as $28 last year. Investors who missed the chance to buy the stock near $21 in October should still feel comfortable adding the shares to their portfolios.

It wouldn’t be a surprise to see Manulife move back to the 2022 high by the end of 2023.

The bottom line on top stocks to buy for passive income

BCE and Manulife pay attractive dividends that should continue to grow. If you have some cash to put to work in a portfolio focused on passive income and total returns, these stocks appear cheap today 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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Fool contributor  Andrew Walker owns shares of BCE and Manulife.

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