Retirees: 2 Cheap Dividend Stocks to Buy Now for Passive Income

These top TSX dividend stocks now offer high yields for investors seeking passive income.

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A market correction is tough to watch, but pullbacks can give retirees a chance to put cash to work in top TSX dividend stocks at discounted prices. When stock prices fall, the dividend yields rise. This means pensioners who buy stocks at the cheaper level can get a better bang for their buck when generating passive income in a self-directed Tax-Free Savings Account (TFSA) or another portfolio.

Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS) currently trades near $66 per share compared to the 12-month high around $86 and more than $93 in early 2022.

The decline that occurred over the past year after the pandemic rebound is largely due to rising recession fears. Markets are concerned that the Bank of Canada and the U.S. Federal Reserve are going to trigger a severe economic downturn, as they hike interest rates in their efforts to get inflation under control.

High prices are already hitting people’s pocketbooks. The addition of soaring borrowing costs caused by the sharp rise in interest rates could push a large number of households into bankruptcy, especially if the hot jobs market goes into reverse.

In a worst-case scenario, the Canadian banks could see a wave of panic selling in the property market as people dump investment properties to avoid losing their principal residences. As long as the value of the property remains above the amount owed, the banks are in good shape. However, if property prices plunge below the value of the mortgages the banks could take a hit.

For the moment, the central bank expects there to be a soft landing for the economy. The employment market remains healthy, while households and businesses are still sitting on savings built up during the pandemic. On the property side, demand remains strong for homes and condos, even at elevated borrowing costs. This is due to an ongoing lack of supply, high immigration, and soaring rental rates.

Bank of Nova Scotia has a solid capital position to help it ride out a downturn. The dividend should be safe and now provides a 6.25% yield.


Enbridge (TSX:ENB) trades for close to $53 at the time of writing compared to $59.50 at the 2022 peak last June. The dip gives income investors a chance to buy the energy infrastructure giant at an attractive level and pick up a solid 6.6% dividend yield.

Enbridge isn’t an energy producer. The company simply move oil, natural gas, natural gas liquids, or refined fuel along its network of pipelines and charges a fee for providing the service. It’s a bit like running a toll booth. As such, the movement in the commodity price has a limited direct impact on revenue. The main concern is throughput, but that doesn’t appear to be a problem with fuel demand now soaring after the pandemic downturn.

Enbridge has other businesses that also generate steady revenue streams. The company’s natural gas utilities deliver fuel to millions of homes and commercial customers. Enbridge is also expanding its oil and natural gas export capabilities and has a growing renewable energy division.

The current $17 billion capital program will help drive near-term revenue growth and Enbridge can always take advantage of its $108 billion market capitalization to make strategic acquisitions. The board raised the dividend in each of the past 28 years.

The bottom line on top TSX dividend stocks to buy for passive income

Ongoing volatility is expected, and the share prices of these stocks could certainly slide to new 12-month lows in the coming months. That being said, Bank of Nova Scotia and Enbridge look attractive at current levels and pay reliable dividends with high yields. If you have some cash to put to work in a portfolio focused on passive income, these stocks 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 recommends Bank Of Nova Scotia and Enbridge. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker owns shares of Enbridge.

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