Canadians are using their Tax-Free Savings Account (TFSA) to build retirement portfolios that can provide passive income and capital gains. The latest market correction gives investors a chance to buy top TSX dividend stocks at undervalued prices.
Enbridge
Enbridge (TSX:ENB) is a leader in the North American energy infrastructure industry with a current market capitalization of close to $108 billion. The stock trades near $53 per share at the time of writing compared to $59.50 last June.
Investors can take advantage of the dip to secure a solid 6.65% dividend yield at the current price and look forward to ongoing payout growth.
Enbridge raised the dividend in each of the past 28 years. The $18 billion capital program and any future acquisitions should drive revenue and cash flow growth to support ongoing dividend increases.
Enbridge is known as an oil pipeline company, but management is shifting new investments to renewable energy and export opportunities. The company purchased an oil export terminal in Texas for US$3 billion in 2021 and in 2022 purchased a 30% interest in the Woodfibre liquified natural gas (LNG) facility being built in British Columbia. International demand for Canadian and U.S. oil and natural gas is expected to rise in the coming years.
BCE
BCE (TSX:BCE) is a good stock to own if you don’t want to worry about checking the portfolio all the time. The company is a leader in Canada’s communications industry with wireless and wireline networks that deliver mobile and broadband internet services to homes and businesses across the country. BCE also has a media group with assets that include a television network, specialty channels, radio stations, and interests in sports teams. A network of retail locations rounds out the portfolio.
BCE has the power to increase prices when it needs extra cash to cover rising costs. This is important during the current era of high inflation. Revenue from the mobile and internet subscription services should hold up well during a recession, so BCE should be an attractive pick if you think the economy is headed for a downturn.
The stock looks cheap today trading near $63. It was above $73 at this time last year. Investors who buy at the current price can get a 6% dividend yield.
The bottom line on top stocks for TFSA investors
Enbridge and BCE pay attractive dividends that should continue to grow. If you have some cash to put to work in a TFSA focused on dividends and total returns, these stocks deserve to be on your radar.
