3 Top Canadian Dividend Stocks to Buy for the Long Haul

Investors can still find great Canadian dividend stocks trading at discounted prices.

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The stock market rally that occurred at the end of 2023 caught most people by surprise. Investors are wondering which great TSX dividend stocks are still undervalued and good to buy for a self-directed Tax-Free Savings Account (TFSA) targeting passive income or a Registered Retirement Savings Plan (RRSP) portfolio focused on total returns.

Enbridge

With a market capitalization of more than $100 billion Enbridge (TSX:ENB) is a giant in the North American energy infrastructure industry. The company moves roughly a third of the oil produced in Canada and the United States and 20% of the natural gas used by American homes and businesses.

The stock trades near $49 at the time of writing; this is up from $43 in October but is still way off the $59 market the share price hit in 2022.

Enbridge raised the dividend by 3.1% for 2024. That’s the 29th consecutive annual dividend hike the board has given investors. A $25 billion capital program and ongoing acquisitions are expected to boost revenue and distributable cash flow in the coming years to support distribution increases.

Investors who buy ENB stock at the current level can get a 7.4% dividend yield.

BCE

BCE (TSX:BCE) is another industry leader with a great track record of dividend growth. Canada’s largest communications firm has increased its dividend by at least 5% in each of the past 15 years. The company gets most of its revenue from the core mobile and internet subscription business lines. These are services that businesses and homeowners need regardless of the state of the economy, so BCE should be a good stock to own during an economic downturn.

The share price dropped from $65 in May last year below $50 in early October, largely due to rising interest rates. Economists expect the Bank of Canada to begin reducing interest rates this year, so money could start to flow back into the stock. At the current price of about $54.50, BCE still looks oversold and offers investors a solid 7.1% dividend yield.

Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS) has underperformed its peers in recent years, but the new chief executive officer is making changes that should drive better returns for investors. New people now occupy several senior roles amid a strategy shift, and the bank reduced staff by 3% last year to trim expenses. Going forward, investment will focus on growth opportunities in Canada, the United States, and Mexico and less on the other international businesses in Chile, Colombia, and Peru that have struggled to deliver the anticipated returns for shareholders.

Bank of Nova Scotia trades near $63.50 at the time of writing compared to $93 in early 2022. This is arguably a contrarian pick, and investors should be prepared for ongoing turbulence, but the dividend should be safe, and you get paid a nice 6.7% yield to wait for the recovery.

The bottom line on top TSX dividend stocks

Enbridge, BCE, and Bank of Nova Scotia pay attractive dividends that should continue to grow. If you have some cash to put to work in a TFSA or RRSP, these stocks still look cheap today and deserve to be on your radar today.

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 Bank Of Nova Scotia and Enbridge. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker owns shares of Enbridge and BCE.

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