Better RRSP Buy: BCE Stock or Fortis?

BCE and Fortis are done from their 12-month highs. Is one of these stocks a good RRSP buy?

| More on:
Piggy bank next to a financial report

Image source: Getty Images.

Canadian savers are searching for top TSX dividend stocks to add to their self-directed Registered Retirement Savings Plan (RRSP) portfolios. The market correction is giving investors a chance to buy stocks like BCE (TSX:BCE) and Fortis (TSX:FTS) at discounted prices.


BCE is Canada’s largest communications firm with a current market capitalization of close to $56 billion. The business has the size and balance sheet strength to make the investments needed to upgrade its wireline and wireless networks and defend its market position. In fact, BCE invested more than $5 billion in 2022 on capital projects that included the expansion of the 5G mobile network and continued fibre-optic connections running right to the premises of its customers.

BCE delivered solid 2022 results. Revenue, adjusted earnings, and free cash flow all improved compared to 2021. The board raised the dividend by 5.2% for 2023. This is the 15th consecutive annual increase of at least 5%.

Higher debt costs are expected to put pressure on adjusted earnings in 2023, but revenue and free cash flow are still projected to grow. A recession would likely hit the ad revenue generated by the media group. BCE’s internet and mobile subscription revenue, however, should hold up well due to the essential nature of these services.

BCE trades for close to $61 at the time of writing compared to a 12-month intraday high of $74. The pullback appears exaggerated, and investors can now get a dividend yield of 6.3% from BCE stock.


Fortis is another stock that should be good to buy and own during difficult economic times. The firm owns $64 billion in assets located in Canada, the United States, and the Caribbean. The operations include power-generation facilities, electricity transmission networks, and natural gas distribution utilities. A full 99% of revenue comes from regulated assets, so the cash flow stream should be reliable and predictable.

Fortis increased the dividend in each of the past 49 years. Management is targeting annual increases of 4-6% through 2027, supported by a $22.3 billion capital program. At the time of writing, the stock provides a 4.1% dividend yield. Fortis stock is down to $55.50 from the 12-month high around $65, so investors have a chance to pick it up on a nice dip.

Is one a better RRSP bet?

BCE and Fortis both appear cheap right now and deserve to be on your radar for a self-directed RRSP. That being said, BCE offers a better dividend yield and should deliver similar distribution growth over the medium term. As such, I would probably make BCE the first choice today.

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 Fortis. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker owns shares of BCE.

More on Dividend Stocks

A worker uses a double monitor computer screen in an office.
Dividend Stocks

2 of the Best Canadian Stocks That Pay Out Monthly

These two Canadian dividend stocks are some of the best to buy, offering yields upwards of 5.4% and returning cash…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Passive-Income Seekers: 4 Safe Dividend Stocks to Own Beyond 2033

Dividend stocks are great, but only if they continue to perform after downturns as well. In the case of these…

Read more »

clock time
Dividend Stocks

How Investors Can Build a $1 Million Portfolio in 12 Years

If you can handle it, you can certainly create a million-dollar portfolio in just 12 years, especially considering this dividend…

Read more »

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

4 Big Dividend-Paying Stocks for 2023

These four stocks all earn strong cash flow and offer attractive dividend yields, making them some of the best to…

Read more »

grow dividends
Dividend Stocks

This 7.5 Percent Dividend Stock Pays Cash Every Month

If you need cash now, this dividend stock is certainly one I would consider that could double in share price…

Read more »

Path to retirement
Dividend Stocks

Need Passive Income? Turn $6,000 Into $106 Every Month

Find the right dividend stock for stable growth and you can turn $6,000 into $106 each month!

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

2 Top Stocks to Supercharge Your TFSA Into a Cash Cow

IA Financial and Brookfield Renewable Partners are great passive income generators for new TFSA investors.

Read more »

edit Real Estate Investment Trust REIT on double exsposure business background.
Dividend Stocks

Invest in This 7.5% Dividend Stock for Passive Income

This dividend stock could provide you with double the amount of annual passive income by investing now instead of at…

Read more »