The market correction in TSX dividend stocks is giving investors a chance to get great deals for their self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolios.
TC Energy
TC Energy (TSX:TRP) trades near $48 per share at the time of writing compared to more than $73 at the high point in 2022. The company has struggled with soaring expenses on its Coastal GasLink pipeline project, which will now cost about $14.5 billion instead of the original budget of around $6 billion.
That has forced TC Energy to recently monetize some U.S. assets for $5.2 billion to raise funds and shore up the balance sheet. The company also intends to spin off the oil pipeline business into a new company to raise additional funds.
Coastal GasLink is more than 90% complete. TC Energy says its total $34 billion capital program is still expected to drive enough cash flow growth to support ongoing annual dividend increases of 3-5%. The board has raised the dividend annually for more than 20 years.
Investors can now get a 7.7% dividend yield from TRP stock.
BCE
BCE (TSX:BCE) is another top TSX dividend stock that looks oversold. The communications giant increased the payout be at least 5% annually for the past 15 years.
BCE will see profits decline in 2023 due to higher borrowing costs and revenue weakness in the media division. Management is trimming headcount by about 1,300 and is closing six radio stations to adjust to the current conditions.
Overall, however, the core internet and mobile businesses are performing well, and BCE expects total revenue and free cash flow to increase in 2023. BCE stock trades near $55 compared to $65 a few months ago. The pullback appears exaggerated, and investors can now get a 7% dividend yield.
Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) currently trades at a new 12-month low of under $63. The stock touched $93 in early 2022, so there is decent upside when the bank sector rebounds.
Bank of Nova Scotia remains very profitable, and the board increased the dividend when the company reported the fiscal second-quarter (Q2) 2023 results. This suggests the management team is comfortable with the earnings outlook.
A new chief executive officer took charge of the bank this year and is expected to shake things up to drive better shareholder returns. In the meantime, investors can buy the stock while it is cheap and collect a 6.75% dividend yield.
Canadian National Railway
Canadian National Railway (TSX:CNR) is one of those stocks you can buy for a retirement fund and simply forget for decades. The company serves a critical role in the smooth operation of the North American economy transporting commodities, raw materials, and finished goods.
CN has a compound annual dividend growth rate of about 15% since it went public in the 1990s. The dividend yield is only about 2%, but the long-term dividend growth and gains in the share price make CN a great candidate for an anchor position in a retirement portfolio.
Fortis
Fortis (TSX:FTS) operates power generation, electric transmission, and natural gas distribution utilities in Canada, the United States, and the Caribbean.
The board raised the dividend in each of the past 49 years and intends to boost the payout by at least 4% annually through 2027. This is good news for investors who are concerned about potential economic turbulence in the next couple of years.
The stock is down to $54 from $61 in May. Investors can take advantage of the dip to get a 4.2% yield.
The bottom line on top TSX dividend stocks
Investors can easily build a diversified portfolio of top TSX dividend stocks to get great yields and attractive total returns for their retirement portfolio. Buying stocks on dips takes courage, and more downside could be on the way, but the long-term benefits should outweigh the near-term risks.
