The rebound in TSX dividend stocks in recent weeks has investors who missed the bounce wondering which top Canadian dividend payers are still undervalued and good to buy for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio.
Enbridge
Enbridge (TSX:ENB) is a giant in the North American energy infrastructure industry with a current market capitalization near $101 billion. The stock trades for close to $47.50 at the time of writing. That’s up from $43 two months ago but still down from the $59 mark the stock hit at the peak last year.
Enbridge is on track to deliver solid 2023 results and expects to generate growth in distributable cash flow next year. This is one reason the board just announced the 29th consecutive annual dividend increase. Enbridge is raising the dividend by 3.1% for 2024. Investors who buy ENB stock at the current level can get a 7.7% dividend yield.
Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) has underperformed its peers in recent years. A new chief executive officer took control in early 2023 and is working to turn things around. New people are now in many executive positions, and the bank announced a 3% reduction in staff to adjust to evolving market conditions and help lower costs.
The December 13th shareholder meeting should deliver more information on the strategy heading into 2024 and beyond. Investors could see a decision to exit some international markets. Bank of Nova Scotia has large operations in Chile, Mexico, Peru, and Colombia. Mexico will likely stay in the mix, but pundits speculate that the bank could monetize the operations in the other three Latin American markets and use the funds to pursue growth elsewhere.
The board just raised the dividend for the second time this year. That suggests there isn’t too much concern about the profit outlook heading into next year. Bank of Nova Scotia said it expects fiscal 2024 results to be slightly better than fiscal 2023.
BNS stock trades near $60 at the time of writing compared to $93 at the high point in 2022. The drop is probably overdone if economists are correct in their expectations for a short and mild recession, as the Bank of Canada eases up on rate hikes. At the time of writing, investors can get a 7% dividend yield.
Fortis
Fortis (TSX:FTS) has increased its dividend for 50 consecutive years, and the board intends to raise the distribution by at least 4% annually through 2028. This is the kind of reliability dividend investors want to see when choosing stocks that will deliver steady returns in all economic conditions.
Fortis has a $25 billion capital program on the go that will considerably boost the rate base over the next five years. That should support the planned dividend growth. Fortis trades near $55.50 at the time of writing. The stock was above $64 at the peak last year, so there is decent upside potential on a rebound.
The bottom line on top TSX dividend stocks
Enbridge, Bank of Nova Scotia, and Fortis pay attractive dividends that should continue to grow. If you have some cash to put to work, these stocks still look cheap and deserve to be on your radar.
