3 Great Canadian Dividend Stocks to Build Retirement Wealth

Top TSX dividend stocks are on sale.

| More on:
Businessperson's Hand Putting Coin In Piggybank

Image source: Getty Images

Self-directed investors can take advantage of the market correction to buy top TSX dividend stocks for their self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolios.

DRIP 101

A popular strategy for building a retirement fund involves buying dividend-growth stocks and using the dividends to buy even more shares. The effect on the portfolio can be substantial over time, especially when the dividend payment increases steadily and the share price drifts higher.

Companies often set up a dividend-reinvestment plan (DRIP) to encourage investors to use the dividends to buy more stock instead of taking the cash. The attraction for the company is that it retains cash that can be used to fund capital programs, acquisitions, or reduce debt.

Some DRIPs in Canada even offer investors a discount up to 5% on the share price. This can boost returns for investors. Another benefit is that there is no commission or fee charged to purchase the shares.

Investors who hold their stock in a self-directed brokerage account can ask their service provider to set up the DRIP automatically. In this situation, whole shares are usually purchased, so the extra cash goes into the account.


Telus (TSX:T) has increased the dividend annually for more than two decades, with hikes normally in the 7-10% range. The stock price has pulled back considerably over the past year, giving investors a chance right now to pick up a 6% dividend yield. At the time of writing, Telus trades near $24 per share compared to more than $34 at the 2022 high.

Rising interest rates are to blame for most of the downturn in the past 12 months. Recent bad news from a Telus subsidiary, Telus International, triggered the latest leg to the downside. Ongoing volatility should be expected in the near term, but Telus looks oversold at this point.

Management still expects operating revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA) to increase at a healthy clip in 2023. This should support ongoing dividend growth.


Enbridge (TSX:ENB) has increased its dividend in each of the past 28 years. The trend should continue, driven by the current $17 billion capital program and any strategic acquisitions that the company makes in the coming years.

Management is targeting earnings-per-share growth of 4% through 2025 and 5% beyond. Distributable cash flow is expected to increase by 3% through 2025 and 5% in the following years. Enbridge recently announced a new deal with oil producers to maintain high volumes across the Mainline pipeline for several years. This should make revenue and cash flow more predictable.

At the time of writing, Enbridge trades for less than $49 per share compared to $59 in June last year. Investors can now get a 7.3% dividend yield from ENB stock.


Fortis (TSX:FTS) increased its dividend in each of the past 49 years. The yield is only about 4%, but the board intends to boost the distribution by at least 4% annually through 2027. Fortis has a $22.3 billion capital program that will raise the rate base by a compound annual rate of about 6% over this timeframe.

Management has other projects under consideration, and Fortis isn’t shy when it comes to driving additional growth through strategic acquisitions. FTS stock isn’t as cheap as it was at the 12-month low last fall, but it still looks attractive right now for a buy-and-hold retirement portfolio.

The bottom line on top Canadian dividend stocks

Telus, Enbridge, and Fortis pay attractive dividends that should continue to grow. If you have some cash to put to work in a TFSA or RRSP, 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, Fortis, TELUS, and Telus International. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker owns shares of Telus and Enbridge.

More on Dividend Stocks

woman retiree on computer
Dividend Stocks

2 Dividend Stocks That Will Pay You for Years and Years

Top TSX dividend stocks are starting to look oversold.

Read more »

TFSA and coins
Dividend Stocks

2023 TFSA Contribution Time: 2 Dividend Stocks to Buy With $6,500

Are you interested in using some of your 2023 TFSA contribution room? Here are two dividend stocks to buy with…

Read more »

money cash dividends
Dividend Stocks

2 Stocks Under $100 You Can Buy and Hold Forever

While many stocks continue to trade cheaply, here are two of the best in Canada to buy today and hold…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

Retirees: 2 High-Yield Dividend Stocks to Buy for Passive Income

Given their solid underlying businesses and high dividend yields, these two dividend stocks are an excellent buy for retirees.

Read more »

Early retirement handwritten in a note
Dividend Stocks

2 TSX Dividend Stocks to Buy Today to Help You Retire Early

Buying these two reliable TSX dividend stocks today can help you retire early if you hold them for the long…

Read more »

Doctor talking to a patient in the corridor of a hospital.
Dividend Stocks

Is Northwest Healthcare Stock Oversold?

Northwest Healthcare stock has plummeted 41% so far this year on concerns over its financial health as interest rates shot…

Read more »

TFSA and coins
Dividend Stocks

How to Earn $1,800 Per Year in a Self-Directed TFSA

This TFSA investing strategy can reduce risk and still generate attractive tax-free passive income.

Read more »

edit Sale sign, value, discount
Dividend Stocks

TFSA Income: 2 Great Canadian Dividend Stocks Now on Sale

Top TSX dividend stocks now offer attractive yields.

Read more »