The TSX Composite Index tanked by 5.3% in August and September combined, prompting investors to flee risky growth stocks and look for alternatives. That’s why the Canadian stock market benchmark has lost another 2.6% of its value in October so far. Such uncertain market times act as a reminder that investors, besides growth stocks, must hold some safe dividend stocks in their portfolio.
In this article, I’ll highlight two of the best TSX dividend stocks you can buy today, even with an investment of as low as $10,000, to minimize risks to your stock portfolio.
Image source: Getty Images
My first top dividend stock pick on the TSX today
Considering its trustworthy business model, strong financial position, and spectacular track record of dividend growth, Enbridge (TSX:ENB) is one of the best dividend stocks you can buy on the Toronto Stock Exchange today. This Calgary-based energy transportation and infrastructure giant currently has a market cap of $91.9 billion, as its stock trades at $43.12 per share after shedding 18.5% of its value in 2023 so far.
Besides the recent broader market selloff, the grim short-term energy outlook could be the primary reason for ENB’s big year-to-date declines. Nonetheless, its well-diversified business, with a network of liquids pipelines, gas transmission network, natural gas utility, and renewable platforms, is capable of helping the company continue growing financially, even in a difficult economic environment. That’s the reason why its adjusted earnings in the first half of 2023 rose 1.3% year over year to $1.53 billion, despite a 20.5% decline in its revenue.
As Enbridge remains focused on expanding its presence in renewable natural gas distribution, carbon capture and storage, and crude oil export areas, you can expect its financial growth trends to improve further in the coming years, making this TSX dividend stock look even more attractive to buy on the dip today.
At the current market price, ENB offers a very impressive 8.2% annualized dividend yield and distributes its dividend payouts every quarter.
My second top dividend stock pick on the TSX today
Other than the energy sector, bank stocks have also seen a sharp correction in the last year amid fears that rapidly rising interest rates might trim their profitability. However, we shouldn’t forget that the monetary policy tightening can’t continue forever, and large Canadian banks are financially well prepared to navigate the temporary uncertain environment. Considering that, Toronto-Dominion Bank (TSX:TD) could be a great TSX dividend stock to consider today, especially after its recent downside correction.
When picking a stock to invest in for the long term, you should pay more attention to the company’s long-term growth trends. This is because short-term financial growth trends could be temporary and usually won’t give you a complete picture of a company’s underlying fundamentals. If you follow that guideline, TD Bank won’t disappoint you.
Despite facing global pandemic-driven challenges in between, TD Bank’s revenue grew positively by 28.4% in the five years between its fiscal year 2017 and 2022 (ended in October 2022). During the same five-year period, the bank witnessed a solid 50.9% jump in its adjusted annual earnings, reflecting its consistently improving profitability.
Besides these positive factors, TD Bank’s decent 4.8% annualized dividend yield makes this TSX dividend stock more attractive to buy today.
