Regarding your registered retirement savings plan (RRSP), there are downsides to overweighting risk-free securities, especially as rates come down. Indeed, recent Bank of Canada rate cuts may have already pinched savers as certain financial institutions were quick to react by lowering their rates on savings accounts.
Additionally, as bond yields come down, RRSP investors may find it’s a good time to dip their toe back into the dividend stock waters. Of course, even the most defensive of dividend stocks have the potential to be wild movers when the stock market really gets rocked. Indeed, when there’s fear on Bay and Wall Street, no stocks can be safe from the extreme selling.
That said, if you’re not one to get rattled by volatility and envision yourself buying more shares of dividend stocks in your portfolio on weakness, I do think it can make sense to consider bolstering your RRSP with Canadian dividend growth stocks. In this piece, we’ll look at two names that may just be worth stashing in your RRSP portfolio for the next five to eight years.
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Waste Connections
Sometimes, boring businesses can outdo the most exciting ones. Waste Connections (TSX: WCN) stock has quietly gained more than 107% over the past five years. More recently, however, shares of the North American trash collector have consolidated, trading sideways since July.
As the name looks to “correct” by going sideways in the $250–253 range, I do think long-term investors should look to punch their ticket into the name. The stock still looks rather expensive at just shy of 50 times trailing price-to-earnings (P/E), but as we head into 2025, some potential catalysts may help propel the name out of its consolidation channel.
The company has been taking steps to improve its operating performance while reducing its emissions through various means. And as the firm continues exploring acquisition opportunities as they arise, I wouldn’t at all be surprised if WCN stock gets even pricier over time.
Indeed, sometimes premium price tags on stocks are well worth paying if you’re getting a fundamentally sound business that has the levers to pull to move earnings higher. At the end of the day, Waste Connections is a top-tier operator that could become a heck of a lot greener in a decade’s time.
TFI International
TFI International (TSX: TFII) is a trucking company that’s seen its stock fall off the road a bit. Though there could be a double-top technical pattern in the works, I wouldn’t be afraid to pick up a few shares on the way down, especially as TFI moves past this “challenging” environment.
Like Waste Connections, TFI has taken advantage of acquisition opportunities over the past year. Indeed, I think the firm is getting great deals amid industry turbulence. And going into 2025, I don’t expect the pace of such deals to slow, especially should the industry environment improve a bit.
At the end of the day, growth-by-acquisition can be a fantastic strategy, especially if managers are keen on synergy-rich deals. All considered, I think RRSP investors have plenty of reasons to stick with the relatively small (nearly $16 billion market cap) grower after its latest correction.
