The TSX Composite Index has inched up by 11% so far in 2024, reaching a fresh all-time high earlier this week. Although recent interest rate cuts in Canada and the hopes of a rate cut in the U.S. are driving stocks higher, uncertainties aren’t completely over yet, as investors remain worried about slowing economic growth and a potential recession.
Considering this, Tax-Free Savings Account (TFSA) investors, especially those who are planning for retirement, may want to remain cautious. One of the best ways to protect your portfolio from market volatility is to focus on stable, dividend-paying stocks that offer both security during volatile times and growth potential to combat inflation over the long term.
In this article, I’ll highlight two TFSA-friendly safe stocks that could help you secure a serene retirement.
Canadian Natural Resources stock
Canadian Natural Resources (TSX:CNQ) is arguably one of the safest dividend stocks for TFSA investors, with a decades-long track record of yielding strong returns. This Calgary-based oil and gas producer currently has a market cap of $105.1 billion as its stock trades at $49.67 per share with about 14.4% year-to-date gains. At the current market price, CNQ stock has a 4.2% annualized dividend yield.
In the second quarter of 2024, Canadian Natural’s total revenue rose 14.7% on a YoY (year-over-year) basis to $9.1 billion. During the quarter, its daily output reached about 1.9 million barrels of oil equivalent per day, up nearly 8% from a year ago. Stronger realized commodity prices and its continued efforts to reduce costs helped the company post a solid 54.4% YoY jump in its adjusted quarterly earnings to $0.88 per share, beating analysts’ expectations of $0.81 per share.
Moreover, Canadian Natural’s extensive portfolio of long-life assets, its ongoing investment in technology and infrastructure, and its focus on increased production efficiencies could accelerate its financial growth trends in the years to come, which should help its share prices appreciate in value.
Fortis stock
Fortis (TSX:FTS) could be another TFSA-friendly dividend stock that investors can consider buying today and holding for years to come. This St. John’s-headquartered diversified utilities company currently has a market cap of $29.1 billion as its stock trades at $50.95 per share with roughly 8% year-to-date gains. FTS stock offers a 4% annualized dividend yield at this market price.
In the latest quarter ended in June, Fortis posted a 2.9% YoY increase in its total revenue to $2.7 billion. Higher retail electricity sales in Arizona with new customer rates and favourable weather conditions drove its adjusted quarterly earnings up by 8.1% YoY to $0.67 per share.
Given the essential nature of its services, this utility giant has a track record of continuing to perform well despite economic downturns. As Fortis continues to advance its ambitious $4.8 billion annual capital plan with a focus on greater reliability and transition to cleaner energy, its long-term growth trajectory looks solid. These are some of the key reasons why you can expect Fortis to continue outperforming the broader market in the long run.
