The pullback in the share prices of many top TSX dividend stocks is giving investors who missed the bounce off the 2020 market crash another opportunity to buy great Canadian dividend stocks at cheap prices for a self-directed Registered Retirement Savings Plan (RRSP) portfolio focused on total returns.
Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) is expected to announce a new growth strategy at the 2023 investor day being held on December 13. Canada’s fourth-largest bank by market capitalization has underperformed its peers in recent years and the new chief executive officer intends to drive better shareholder returns. He already put new people in executive positions across the bank and announced staff cuts in the range of 3% to trim expenses as part of a move to make the bank more efficient.
Fiscal fourth-quarter (Q4) 2023 results came in weaker than expected by analysts. BNS stock dipped as much as 5% on the news, but bargain hunters moved in on the dip and the shares currently trade near $60, which is where they sat before the fiscal 2023 earnings release.
The stock traded above $90 in early 2022, so there is decent upside potential for a recovery.
Bank of Nova Scotia is a contrarian pick in the Canadian bank sector, but investors can collect a 7% dividend yield while they wait for the turnaround efforts to bear fruit.
TC Energy
TC Energy (TSX:TRP) spent much of 2023 working on deals to raise capital to shore up the balance sheet. The company sold a stake in some American assets for $5.3 billion and is making progress on its planned spin-off of the pipelines business. In addition, TC Energy is considering the monetization of the Mexican assets, along with other assets in Canada.
The plan is to build funds to move forward on the growth program while plugging a hole caused by the cost of building the Coastal GasLink pipeline that will carry natural gas from producers to a new liquified natural gas (LNG) export facility being built in British Columbia. Coastal GasLink has reached mechanical completion, but the tally is expected to be in the neighbourhood of $14.5 billion, which is more than double the initial budget.
Investors have likely focused too much on the Coastal GasLink challenges. TC Energy says its full-year 2023 results will be at the top of its guidance, and 2024 is shaping up to be a solid year, supported by the strong performance of the overall asset portfolio.
The stock trades for close to $50 at the time of writing compared to more than $70 at the high point last year. Investors who buy at the current level can get a 7.4% dividend yield. TC Energy intends to increase the dividend by at least 3% annually over the medium term.
The bottom line on top high-yield dividend stocks
Bank of Nova Scotia and TC Energy pay attractive dividends that should continue to grow. If you have some cash to put to work in a self-directed RRSP, these stocks look cheap today and deserve to be on your radar.
