2 Top TSX Dividend Stocks to Buy for July 2023

If you have some cash to put to work in a self-directed TFSA or RRSP focused on passive income or total returns, these stocks deserve to be on your radar.

| More on:
analyze data

Image source: Getty Images

The latest leg of the market correction is giving investors a chance to buy some top TSX dividend stocks at cheap prices for self-directed Tax-Free Savings Account (TFSA) and Registered Retirement Saving Plan (RRSP) portfolios.


Enbridge (TSX:ENB) operates a strategically important network of oil and natural gas pipeline infrastructure in Canada and the United States. The company moves 30% of the oil produced in the two countries, owns an oil export terminal in Texas, has natural gas-distribution utilities that supply millions of customers in Canada with essential fuel, and is a partner in the new Woodfibre liquified natural gas (LNG) facility being build in British Columbia. In addition, Enbridge has a growing renewable energy division and is positioned well to capitalize on carbon capture and hydrogen opportunities.

Enbridge trades near $48 per share at the time of writing compared to $59 in early June last year.

The drop has coincided with weakness in oil and gas producer stocks, but the pullback appears overdone. Enbridge generated solid first-quarter (Q1) 2023 results that were largely in line with the same period last year. Guidance on adjusted earnings per share (EPS) and distributable cash flow (DCF) growth is decent for the next few years, supported by a $17 billion capital program.

As long as fuel demand remains robust, the shifts in oil or natural gas prices should have a limited direct impact on Enbridge’s revenue stream. The company doesn’t produce the commodities, it simply moves them and charges a fee for the service.

Investors who buy Enbridge stock at the current level can get a 7.4% dividend yield. The board raised the payout in each of the past 28 years.

Bank of Montreal

Bank of Montreal (TSX:BMO) closed its US$16.3 billion acquisition of Bank of the West in early February, right before two California-based banks failed and triggered a plunge in the share prices of regional banks in the United States.

In hindsight, investors might think the deal was too expensive. That could be the case. However, Bank of the West adds roughly 1.8 million customers and more than 500 branches with a strong presence in the California market. At the time of the deal’s closing, Bank of Montreal became the eighth-largest bank in North America by assets with a footprint in 32 U.S. states. Investors should see long-term benefits emerge from the Bank of the West deal, as the American economy continues to expand.

BMO stock trades for close to $118 per share at the time of writing compared to $136 in February. Investors can get a 5% dividend yield at this level and wait for the rebound in the bank sector. Bank of Montreal has a great track record of paying dividends. Shareholders have received a distribution annually since 1829.

Near-term volatility in bank stocks should be expected until the Bank of Canada and the U.S. Federal Reserve finish raising interest rates and the full impact on the economy becomes evident.

The bottom line on top TSX dividend stocks

Enbridge and Bank of Montreal pay attractive dividends that should continue to grow. If you have some cash to put to work in a self-directed TFSA or RRSP focused on passive income or total returns, 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 Enbridge. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker owns shares of Enbridge.

More on Dividend Stocks

Canadian Dollars
Dividend Stocks

Buy 734 Shares of This Top Dividend Stock for $9,574 a Year in Passive Income

Are you looking to earn regular income? Now is an opportune time to buy Dividend Aristocrats at discounts and accelerate…

Read more »

A plant grows from coins.
Dividend Stocks

This Ultra-High Yield Stock Just Hit a 52-Week Low, and it’s Still a Buy Today

Enbridge Inc (TSX:ENB) stock recently hit a 52-week low. Here's why.

Read more »

Payday ringed on a calendar
Dividend Stocks

This 6% Dividend Stock Pays Cash Every Month

Are you looking to earn cash every month from October 15 onwards? This 6% dividend stock gives you monthly payouts.

Read more »

Person slides down a stair handrail
Dividend Stocks

With a 7.6% Dividend, This TSX Stock Is One to Buy Now and Hold for Decades

Now is an opportune time to invest in this no-brainer TSX stock and get +$30 extra dividend for decades on…

Read more »

Portrait of woman having fun in the street.
Dividend Stocks

CPP Benefits Will Be Higher for Millennials and Gen Z

Older Canadians won't get enhanced CPP, but they may invest in dividend stocks like Royal Bank of Canada (TSX:RY).

Read more »

A plant grows from coins.
Dividend Stocks

The Best Dividend Stocks in Canada Right Now

Seeking to give a boost to your income portfolio, consider investing in these best Canadian dividend stocks.

Read more »

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

Retirees: Want Fast-Growing Passive Income? Here Are 3 Long-Term Dividend Stocks

Are you looking for dividend stocks that can grow their distributions very quickly? Here are three long-term picks!

Read more »

dividends grow over time
Dividend Stocks

2 Top Dividend Stocks You Can Buy and Hold Forever

The market is full of great dividend stocks, but not all are long-term gems. Here are two options that you…

Read more »