Retirees: 2 Cheap Canadian Stocks With 7% Yields for Passive Income

Top TSX dividend stocks are on sale.

| More on:
Close up shot of senior couple holding hand. Loving couple sitting together and holding hands. Focus on hands.

Image source: Getty Images.

A number of top Canadian dividend stocks are now trading at discounted prices and offer attractive yields for a self-directed Tax-Free Savings Account (TFSA) focused on passive income.


Enbridge (TSX:ENB) is a major player in the North American energy infrastructure industry. The company moves 30% of the oil produced in Canada and the United States and 20% of the natural gas used by Americans. Growth initiatives in recent years have shifted away from the construction of major pipelines to exports, utilities, and renewable energy.

Enbridge purchased an oil export terminal in Texas and is a partner in the Woodfibre liquified natural gas (LNG) facility being built on the coast of British Columbia. The company is also in the process of finalizing its US$14 billion acquisition of three natural gas utilities in the United States. Demand for natural gas in both the U.S. and overseas is expected to grow as gas-fired power production is used to complement the shift to renewables. It will also play a role in feeding the power demands of new artificial intelligence (AI) data centres.

Enbridge trades near $48.50 at the time of writing compared to $59 two years ago. The stock is off the 12-month low around $43 and more gains should be on the way once the U.S. starts to cut interest rates. Enbridge uses debt to fund its growth programs. Lower borrowing costs should boost profits and free up more cash that can be paid out to shareholders.

Enbridge is working on a $25 billion capital program. Management says this will help drive distributable cash flow up by 3% per year through 2026 and by 5% after that timeframe. This should enable dividend growth in the same range. Enbridge raised the payout in each of the past 29 years.

Investors who buy ENB stock at the current level can get a dividend yield of 7.5%.


Telus (TSX:T) trades for less than $21 per share at the time of writing. The stock was as high as $34 two years ago, so there is decent upside potential on a rebound.

As with Enbridge, the surge interest rates in 2022 and 2023 drove up borrowing costs. Telus spends billions of dollars every year on wireless and wireline network expansion and uses debt to fund part of the capital program. The Bank of Canada recently reduced its interest rate and more cuts are expected through 2025. This should entice investors back to Telus stock.

Telus generated growth in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of better than 7% in 2023 and anticipates adjusted EBITDA growth of at least 5.5% this year. Based on this outlook, the stock is likely oversold.

Telus has increased the dividend annually for more than 20 years. Investors who buy now can get a 7.5% dividend yield.

The bottom line

Enbridge and Telus pay attractive dividends that should continue to grow. If you have some cash to put to work, these stocks deserve to be on your radar for a portfolio targeting high-yield passive income.

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 Enbridge and TELUS. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker owns shares of Telus and Enbridge.

More on Retirement

RRSP (Registered Retirement Savings Plan) on wooden blocks and Canadian one hundred dollar bills.

RRSP Investors: Buy These Top Dividend Stocks for Total Returns

These dividend stocks still look cheap.

Read more »

financial freedom sign

Want $1 Million in Retirement? Invest $10,000 in These 3 Stocks and Wait a Decade

What would it take to convert $10,000 into $1 million? Let’s do the math and see stocks that have the…

Read more »

edit Balloon shaped as a heart

3 Stocks Retirees Should Absolutely Love

These three dividend stocks are perfect for retirees wanting not just income, but growth in shares for the foreseeable future.

Read more »

Close up of an egg in a nest of twigs on grass with RRSP written on it symbolizing a RRSP contribution.
Dividend Stocks

2 Top Canadian Dividend Stocks for RRSP Investors 

No matter how much you save, you may wonder if it is enough to retire. These dividend stocks can give…

Read more »

Increasing yield

3 High-Yield Dividend Stocks for Retirees

Top TSX dividend stocks are on sale.

Read more »

Senior Couple Walking With Pet Bulldog In Countryside

We’re Only Getting Older: A Top TSX Stock That Benefits From an Aging Population

Here's why Chartwell Retirement Residences (TSX:CSH.UN) could be a successful turnaround story to invest in as Canadian grow older

Read more »

A Canada Pension Plan Statement of Contributions with a 100 dollar banknote and dollar coins.

Retirees: What Is the CPP Enhancement and How Does it Work?

The CPP enhancement will increase your pension payout in retirement. But you still need other income sources to supplement the…

Read more »

Path to retirement

Invest in These TFSA Stocks to Sail Into a Serene Retirement

Is your TFSA set for safety or growth? Having these solid TFSA stocks provides a blend of both.

Read more »